• RBA: 90% probability of no change, 10% probability of 25 bps rate hike (OIS)
• Fed: 92% probability of 25 bps rate hike, 8% probability of no change (Fed funds futures)
• ECB: 81% probability of 25 bps rate hike, 19% probability of 50 bps rate hike (€STR)

Among the three, it is only the ECB pricing that might shift around a little ahead of the Thursday decision. That will be dependent on what we see from the Eurozone CPI data tomorrow, as pointed out earlier here.

The RBA meanwhile will be a rather straightforward one, as they are widely expected to keep the cash rate unchanged. And they are also likely to deliver a similar communique to what we already saw last month.

As for the Fed, that is where things start to get interesting for broader markets. While a 25 bps rate hike is almost certainly a done deal, what comes next is still up in the air for the most part. Will the Fed stick with a higher for longer approach and narrative? Or will they acknowledge that the time is now here to call for a pause?

Whatever the case is, it will definitely have an impact on the Fed funds futures curve.

As things stand, traders are pricing in two rate cuts by year-end and that the Fed will pause after this week’s rate hike.

We shall see whether or not policymakers agree with that view and how Powell will communicate that when the time comes on Wednesday.

This article was written by Justin Low at www.forexlive.com.