RBA Reassesses Pricing Behaviors and Policy Impact Amid Inflation Pressures 
BOJ Signals Imminent Interest Rate Hike Amid Strengthening Economic Conditions 
Best Gold Stocks to Buy Now: AABB, GOLD, GDX 
Fed Rate Cut Odds Rise as December Decision Looks Increasingly Divided 
Brazil Central Bank Plans $2 Billion Dollar Auctions to Support FX Liquidity 
Singapore Maintains Steady Monetary Outlook as Positive Output Gap Persists into 2025 
BOJ Seen Moving Toward December Rate Hike as Yen Slides 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
Indonesia Aims to Strengthen Rupiah as Central Bank Targets 16,400–16,500 Level 
FOMC increased interest rates in March and maintained its forecast for three rate hikes in 2018. FOMC also forecasted a faster pace of hikes next year than previously forecasted. March decision was unanimous. Current Federal funds rate - 150-175 bps (Note, all calculations are based on data as of 14th May)
- June 2018 meeting: Market is attaching 8.7 percent probability that rates will be at 1.50-1.75 percent, and 91.3 percent probability that rates will be at 1.75-2.00 percent.
- August 2018 meeting: Market is attaching 8.6 percent probability that rates will be at 1.50-1.75 percent, 89.6 percent probability that rates will be at 1.75-2.00 percent, and 1.8 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 2.2 percent probability that rates will be at 1.50-1.75 percent, 29.3 percent probability that rates will be at 1.75-2.00 percent, 67.1 percent probability that rates will be at 2.00-2.25 percent, and 1.4 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 2 percent probability that rates will be at 1.50-1.75 percent, 27.2 percent probability that rates will be at 1.75-2.00 percent, 64.2 percent probability that rates will be at 2.00-2.25 percent, 6.5 percent probability that rates will be at 2.25-2.50 percent, and 0.1 percent probability that rates will be at 2.50-2.75 percent.
- December 2018 meeting: Market is attaching 1.1 percent probability that rates will be at 1.50-1.75 percent, 15.5 percent probability that rates will be at 1.75-2.00 percent, 47 percent probability that rates will be at 2.00-2.25 percent, 33.3 percent probability that rates will be at 2.25-2.50 percent, and 3.1 percent probability that rates will be at 2.50-2.75 percent.
- January 2019 meeting: Market is attaching 1 percent probability that rates will be at 1.50-1.75 percent, 14.4 percent probability that rates will be at 1.75-2.00 percent, 44.6 percent probability that rates will be at 2.00-2.25 percent, 34.3 percent probability that rates will be at 2.25-2.50 percent, and 5.3 percent probability that rates will be at 2.50-2.75 percent, and 0.3 percent probability that rates will be at 2.75-3.00 percent.
The probability is suggesting,
- Since our last review a week ago, the probability has eased for both near month and far month but tightened for mid-month.
- Next hike is priced in June with 91.3 percent probability, instead of 92.5 percent a week ago.
- The market brought forwarded the third hike for 2018 in September and pricing it with 68.5 percent probability compared to 61.5 percent a week ago.
- The market is pricing the fourth hike in December with 36.4 percent probability instead of 38.5percent probability just a week ago.
FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest
