The two big ones to watch this week are the RBA (tomorrow) and the BOC (Wednesday). Both major central banks are expected to keep their respective policy rates unchanged at 4.10% and 5.00% respectively.
For the RBA, this will be Philip Lowe’s last policy meeting as governor before handing over the post to Michele Bullock from September onwards. The latest developments and language guidance have steered markets accordingly to not expect a rate hike for tomorrow. The odds priced in are ~99% for no change.
Meanwhile, the BOC is facing a tough challenge as economic conditions are starting to take a noticeable hit recently. That is enough to convince traders not to expect any more rate hikes by the central bank, with odds of a no change decision this week at ~98% currently. According to the OIS market, we are at peak interest rates in Canada but traders have not gotten too aggressive to price in any rate cuts just yet with the earliest hint only coming in October next year.
There will be bigger fish to try later this month in relation to the central bank bonanza. So, the two this week aren’t really expected to be too impactful for markets and broader sentiment in general.
This article was written by Justin Low at www.forexlive.com.
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