FOREX CENTRAL BANK WATCH: ECB Interest Rate Expectations at 14-month Highs Ahead of CPI Data
DailyFX Research, On Sunday February 27, 2011, 7:14 pm EST
Central Bank
Current
Interest Rate
Next Policy
Decision Expectation
Market Conviction*
1-yr Exp**
Federal Reserve
0.00% – 0.25%
No change on 03/15 ↔
High
+25bps
European Central Bank
1.00%
No change on 03/03 ↔
High
+95bps
Bank of England
0.50%
No change on 03/10 ↔
Medium
+75bps
Swiss National Bank
0.25%
No change on 03/17 ↔
High
+34bps
Reserve Bank of Australia
4.75%
No change on 03/01 ↔
High
+27bps
Bank of Canada
1.00%
No change on 03/01 ↔
High
+79bps
Reserve Bank of
New Zealand
3.00%
25bp cut on 03/09 ↓
High
-8bps
Bank of Japan
0.10%
No change on 03/15 ↔
High
+3bps
*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: there is stark contrast in current interest rate expectations, with markets extremely hawkish on ECB monetary policy and just as bearish on RBNZ policy. Ahead of today’s key Euro-Zone CPI figures, ECB expectations stand at their highest level in 14 months. Meanwhile, markets have high conviction that the RBNZ will cut rates in response to the recent earthquake that killed over 100 people in Christchurch.
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FOREX CENTRAL BANK WATCH: ECB Interest Rate Expectations at 14-month Highs Ahead of CPI Data
Tags: cpi figures, currency trading, overnight index swaps, rbnz
Posted in Forex