A quick summary of the meeting dates among major central banks and what is expected of them in terms of market pricing:
- 6 March – European Central Bank: 25 bps rate cut (100% priced in)
- 12 March – Bank of Canada: Toss up (~51% odds of a 25 bps rate cut)
- 19 March – Bank of Japan: No rate hike (~99% odds of no change)
- 19 March – US Federal Reserve: No rate cut (~93% odds of no change)
- 20 March – Bank of England: No rate cut (~89% odds of no change)
- 20 March – Swiss National Bank: 25 bps rate cut (~96% odds priced in)
It will be a busy month in central bank land but most of the rate decisions are going to go as expected. However, the forward guidance and communication is going to be interesting for all of them.
This will be the last rate cut that is a given for the ECB and arguably the SNB. Meanwhile, even if the BOC is not cutting this month then they will do so in April. As for the BOJ, it might be a bit too early to add in some communication on the spring wage negotiation results but we’ll see. As for the BOE, they are still leaning to cut but aren’t being all too pressured into that just yet. So, that could see a similar language to what we saw in February.
And finally, there’s the Fed. The next rate cut is priced in for June but traders have brought that forward from around September previously (this was the January pricing). So, will the Fed acknowledge softening economic developments? Or will they continue to keep the status quo and allude to the notion that Trump policies still pose a significant enough threat to stall their easing plans?