Headline: Markets Steady on Global Rate Bets as Traders Await Key US Data
Global interest-rate expectations barely shifted over the past week, even after a run of notable economic releases. Investors continue to price selective rate cuts by year-end across major central banks, while keeping a close eye on the next set of US jobs and inflation data that could define the near-term monetary policy outlook.
For the end of this year, futures suggest a modest tilt toward easing from the Federal Reserve, with roughly 16 bps of cuts implied and a 65% probability of a reduction at the next meeting. The Bank of England has about 15 bps of easing priced and a 57% chance of a cut, while the European Central Bank shows just 1 bp and a 96% probability of no change. The Bank of Canada (3 bps, 87% no change), Reserve Bank of Australia (4 bps, 86% no change), Swiss National Bank (3 bps, 89% no change), and Reserve Bank of New Zealand (28 bps, 91% chance of a cut) round out a broadly cautious landscape. Looking further out, cumulative pricing by the end of 2026 points to 82 bps of Fed easing, 57 bps for the BoE, 44 bps for the RBNZ, and modest totals for the ECB, RBA, BoC, and SNB. The Bank of Japan remains the outlier on the tightening side, with about 6 bps of hikes seen by year-end and 42 bps by end-2026, despite a 75% probability of no change at the next meeting. Note: 2026 figures reflect cumulative moves by the end of that year, not easing or tightening within 2026 alone.
Recent data did little to move market pricing. Strong US ADP and ISM prints failed to sway rate expectations, suggesting traders want confirmation from the upcoming nonfarm payrolls and CPI reports before repositioning. In the UK, the BoE’s decision skewed dovish, but Governor Andrew Bailey emphasized that any December move hinges on further improvement in inflation; the central bank will see two employment and two inflation releases before its next meeting. In Canada, employment again surprised to the upside, with the jobless rate falling to 6.9% from 7.1%, reinforcing the Bank of Canada’s signal that its cutting cycle is likely complete.
Key Points – Markets price modest year-end Fed easing: ~16 bps and a 65% chance of a cut at the next meeting. – BoE seen leaning toward a cut (~15 bps; 57% probability), while the ECB is largely on hold (96% no change). – BoC, RBA, and SNB pricing favors no change; RBNZ shows the strongest year-end cut bias (~28 bps; 91% probability). – BoJ remains the main tightening outlier: ~6 bps of hikes by year-end, 42 bps by end-2026. – Cumulative easing by end-2026: Fed 82 bps; BoE 57 bps; RBNZ 44 bps; ECB 12 bps; RBA 18 bps; BoC 10 bps; SNB 8 bps. – Strong US ADP/ISM, a dovish-leaning BoE, and a robust Canadian jobs report left market pricing largely unchanged ahead of NFP and CPI.
