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STIR: US Firmer, NZ Softer, CA & AU Little Changed Over Past Week

STIR
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Year-end official rate expectations across the $-bloc have shown a mixed performance over the past week. The US has firmed by 20bps, New Zealand has softened by 10bps, while Canada and Australia have seen little change.

  • In the US, the market firmed noticeably across meetings following last Friday’s stronger-than-expected Non-Farm Payrolls report. Additionally, recent Fedspeak has contributed to the scaling back of easing expectations over the past week.
  • In New Zealand, the key event was the RBNZ's decision to cut the OCR by 50bps on Wednesday. While this move was largely priced ahead of the meeting, RBNZ-dated OIS pricing is currently 5-14bps softer across meetings out to May 2025, despite today's 2-4bps firming.
  • Currently, 52bps of easing is priced in for November (4.23%), with a cumulative easing of 91bps for February 2025 (3.84%) and 148bps for July 2025 (3.27%).
  • The BoC's next policy meeting is scheduled for October 23rd, with 38bps of easing priced.
  • Australia has experienced a light economic calendar over the past week, with little movement in rate expectations.
  • Looking ahead to July 2025, the projected official rates and cumulative easing across the $-bloc are as follows: US (FOMC): 3.61%, -127bps; Canada (BoC): 2.90%, -135bps; Australia (RBA): 3.79%, -53bps; and New Zealand (RBNZ): 3.32%, -143bps.

 

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Year-end official rate expectations across the $-bloc have shown a mixed performance over the past week. The US has firmed by 20bps, New Zealand has softened by 10bps, while Canada and Australia have seen little change.

  • In the US, the market firmed noticeably across meetings following last Friday’s stronger-than-expected Non-Farm Payrolls report. Additionally, recent Fedspeak has contributed to the scaling back of easing expectations over the past week.
  • In New Zealand, the key event was the RBNZ's decision to cut the OCR by 50bps on Wednesday. While this move was largely priced ahead of the meeting, RBNZ-dated OIS pricing is currently 5-14bps softer across meetings out to May 2025, despite today's 2-4bps firming.
  • Currently, 52bps of easing is priced in for November (4.23%), with a cumulative easing of 91bps for February 2025 (3.84%) and 148bps for July 2025 (3.27%).
  • The BoC's next policy meeting is scheduled for October 23rd, with 38bps of easing priced.
  • Australia has experienced a light economic calendar over the past week, with little movement in rate expectations.
  • Looking ahead to July 2025, the projected official rates and cumulative easing across the $-bloc are as follows: US (FOMC): 3.61%, -127bps; Canada (BoC): 2.90%, -135bps; Australia (RBA): 3.79%, -53bps; and New Zealand (RBNZ): 3.32%, -143bps.

 

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