Rate cuts by year-end

• Fed: 53 bps (95% probability of no change at the upcoming meeting)
• ECB: 26 bps (89% probability of no change at the upcoming meeting)
• BoE: 55 bps (85% probability of rate cut at the upcoming meeting)
• BoC: 30 bps (72% probability of no change at the upcoming meeting)
• RBA: 77 bps (94% probability of rate cut at the upcoming meeting)
• RBNZ: 31 bps (81% probability of no change at the upcoming meeting)
• SNB: 9 bps (88% probability of no change at the upcoming meeting)

Rate hikes by year-end

• BoJ: 11 bps (99% probability of no change at the upcoming meeting)

We’ve seen very small changes in rates pricing since the last update as traders are now waiting for Trump’s letters on tariffs and the US CPI next week.

The positive NFP report last Thursday got us back to the Fed’s baseline scenario of two rate cuts in 2025. The US labour market data continues to be resilient and that will keep the Fed comfortable in waiting for more inflation data.

We have the RBA and RBNZ monetary policy decisions coming up in the next days. The RBA is widely expected to cut by 25 bps, while the RBNZ is expected to keep rates steady.

With Trump’s bill done, the only two risk events ahead are the US CPI next week and some tariffs noise ahead of the August 1 deadline.

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