Japan Signals Surprise Yen Intervention Strategy as BOJ Hawkish Stance Puts FX Traders on Alert 
BOJ Signals More Rate Hikes as Inflation Risks Rise Amid Energy Price Pressures 
China Keeps Loan Prime Rates Unchanged for 13th Straight Month as Policymakers Prioritize Credit Demand Recovery 
RBI Hits Pause as Geopolitical Storm Clouds Gather 
BOJ Rate Hike Expected to Boost Yen, Impact USD/JPY and Nikkei 
New Zealand Unemployment and Inflation Debate Intensifies Ahead of 2026 Election 
FOMC followed through its promise and hiked rates four times in 2018 and forecasted two more rate hikes for 2019. Current Federal funds rate - 225-250 bps (Note, all calculations are based on data as of 28th January)
- January 2019 meeting: Market is attaching 98.9 percent probability that rates will be at 2.25-2.50 percent, and 1.1 percent probability that rates will be at 2.50-2.75 percent.
- March 2019 meeting: Market is attaching 95.1 percent probability that rates will be at 2.25-2.50 percent, and 4.9 percent probability that rates will be at 2.50-2.75 percent.
- May 2019 meeting: Market is attaching 91.3 percent probability that rates will be at 2.25-2.50 percent, and 8.7 percent probability that rates will be at 2.50-2.75 percent.
- June 2019 meeting: Market is attaching 79.1 percent probability that rates will be at 2.25-2.50 percent, 19.5 percent probability that rates will be at 2.50-2.75 percent, and 1.3 percent probability that rates will be at 2.75-3.00 percent.
- July 2019 meeting: Market is 76.7 percent probability that rates will be at 2.25-2.50 percent, and 21.4 percent probability that rates will be at 2.50-2.75 percent, and 2 percent probability that rates will be at 2.75-3.00 percent.
- September 2019 meeting: Market is 72.3 percent probability that rates will be at 2.25-2.50 percent, and 24.5 percent probability that rates will be at 2.50-2.75 percent, and 3.2 percent probability that rates will be at 2.75-3.00 percent.
- October 2019 meeting: Market is 72.3 percent probability that rates will be at 2.25-2.50 percent, and 24.5 percent probability that rates will be at 2.50-2.75 percent, and 3.2 percent probability that rates will be at 2.75-3.00 percent.
- December 2019 meeting: Market is attaching 4.3 percent probability that rates will be at 2.00-2.25 percent, 69.5 percent probability that rates will be at 2.25-2.50 percent, and 23.2 percent probability that rates will be at 2.50-2.75 percent, and 3 percent probability that rates will be at 2.75-3.00 percent.
The probability is suggesting,
- Since our last review a week ago, the probabilities have tightened somewhat.
- The market is pricing just one rate hike for 2019 with 26.2 percent probability, compared to a 23.4 percent a week ago and 10.8 percent in the week before that, which means that the market is still pricing no rate hike in 2019, despite Fed’s forecast of two hikes.
- The market is now pricing a rate cut in 2019 with 4.3 percent probability, compared to 4.4 percent a week ago, and 17.4 percent probability, a week before that.
