With the UK calling for a snap general election and the upcoming first round of the French Presidential election this weekend, it is a
little surprising to actually see probability of a rate rise in the US actually slip lower the most. MNI PINCH calculation of probabilities of interest rate change
are below:
FED: MNI PINCH still see market pricing no chance of a 25bp rate hike at the next meeting on May 3, but the probability of a hike in June has fallen to
40% from 46% seen last Wednesday and in July, markets are pricing in a 47% chance of a hike, down from 54%. While the next full 25bp rate hike has been
pushed out to Dec 2017 from Nov, according to MNI PINCH calculations.
ECB: MNI PINCH still see the market pricing no chance of a interest rate hike at the ECB this year, and with only a 17% probability of a 10bp rate hike
in March 2018 vs 24% previously.
BoE: In the UK, MNI PINCH sees markets pricing in a marginally higher possibility of a rise in interest rates as the markets see the announcement of a
snap election as positive for the UK. MNI PINCH calculate markets pricing in a 13.5% chance of a 25bp rate hike in November little changed from last Wednesday,
however chances of a 25bp rate hike in February 2018 has risen to 20% from 12.5%.
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