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STIR: $-Bloc Markets Firmer Over Past Weak Apart From NZ

STIR
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In the $-bloc, official rate expectations through July 2025 have mostly firmed over the past week. The US led the movement with an 11bp increase, followed by Canada at +9bps and Australia at +8bps. New Zealand was the outlier, showing a modest softening of 2bps. 

  • In Canada, the BoC accelerated its easing cycle this week with a 50bp rate cut, bringing the target rate down to 3.75%. This marked a total reduction of 125bps since June. The BoC's neutral rate range is now viewed between 2.25% and 3.25%. Market reaction to the cut was muted, as roughly 46-47bps of easing had already been priced in. Further rate cuts are expected, with their magnitude and timing dependent on upcoming economic data.
  • News flow for the rest of the $-bloc was relatively light over the past week.
  • Looking ahead to July 2025, the projected official rates and cumulative easing across the $-bloc are as follows: US (FOMC): 3.69%, -119bps; Canada (BoC): 2.82%, -94bps; Australia (RBA): 3.92%, -40bps; and New Zealand (RBNZ): 3.21%, -154bps.

 

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In the $-bloc, official rate expectations through July 2025 have mostly firmed over the past week. The US led the movement with an 11bp increase, followed by Canada at +9bps and Australia at +8bps. New Zealand was the outlier, showing a modest softening of 2bps. 

  • In Canada, the BoC accelerated its easing cycle this week with a 50bp rate cut, bringing the target rate down to 3.75%. This marked a total reduction of 125bps since June. The BoC's neutral rate range is now viewed between 2.25% and 3.25%. Market reaction to the cut was muted, as roughly 46-47bps of easing had already been priced in. Further rate cuts are expected, with their magnitude and timing dependent on upcoming economic data.
  • News flow for the rest of the $-bloc was relatively light over the past week.
  • Looking ahead to July 2025, the projected official rates and cumulative easing across the $-bloc are as follows: US (FOMC): 3.69%, -119bps; Canada (BoC): 2.82%, -94bps; Australia (RBA): 3.92%, -40bps; and New Zealand (RBNZ): 3.21%, -154bps.

 

Keep reading...Show less