|
Central Bank |
Current Interest Rate |
Next Policy Decision Expectation |
Market Conviction* |
1-yr Exp** |
|
Federal Reserve |
0.00% - 0.25% |
No change on 01/26 ↔ |
High |
+26ps |
|
European Central Bank |
1.00% |
No change on 02/03 ↔ |
High |
+28ps |
|
Bank of England |
0.50% |
No change on 02/10 ↔ |
Medium |
+64bps |
|
Swiss National Bank |
0.25% |
No change on 03/17 ↔ |
High |
+32bps |
|
Reserve Bank of Australia |
4.75% |
No change on 02/01 ↔ |
High |
+34bps |
|
Bank of Canada |
1.00% |
No change on 03/01 ↔ |
High |
+51bps |
|
Reserve Bank of New Zealand |
3.00% |
No change on 01/27 ↔ |
High |
+68ps |
|
Bank of Japan |
0.10% |
No change on 01/25 ↔ |
High |
+2bps |
*Market Conviction is based on Overnight Index Swaps. A higher level of conviction implies a greater likelihood that the next policy decision expectation is accurate.
**Represents the number of basis points interest rates are expected to rise or fall over the next year.
Daily Update: Interest rate expectations for the ECB and BOE have plunged in recent days after dovish commentary from the respective central banks. ECB President Jean-Claude Trichet softened his tone on in an interview with the Wall Street Journal, suggesting that inflation has been limited to commodities and that he doesn’t see any “second-round effects” that would cause a rise in prices more broadly.
Meanwhile, in the statement accompanying the latest monetary policy decision, the Bank of Canada said that strength in the Canadian Dollar has been “restraining” the recovery in exports. The central bank also said that inflation remained subdued and that it would only reach 2 percent by the end of 2012. In this context, the BOC said that “any further reduction in monetary policy stimulus would need to be carefully considered.”
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