Economic recession? War? The central bank is fearless
At the end of 20 19, significant progress was made in the global market: the two largest economies in the world reached the first-stage trade agreement; British Prime Minister Johnson won an overwhelming victory in the general election, paving the way for Britain to leave the European Union. The geopolitical tension between the United States and Iran has suddenly escalated. However, the stock market continues to triumph, because everything the Trump administration has done is not just "acting".
In late June, 2020, 5438+ 10, the market focus returned to the central bank's interest rate decision. Obviously, the new year does not mean a new monetary policy, and the central bank of 10 Group seems ready to draw the same path they followed at the end of 20 19.
Bank of Canada: the pricing of interest rate cuts is still low.
Poloz, governor of the Bank of Canada, made a positive evaluation of the global economy in early 2020: the potential downside risks of the global economy have been reduced due to the risk recession of trade disputes. Therefore, it is still valid to think that the monetary policy makers of the Bank of Canada will continue to hold their horses. At present, the market-oriented pricing of interest rates and the central bank will cut interest rates by 25 basis points as early as April.
According to the overnight index swap calculation, the probability of market-oriented interest rate pricing at the end of 20 19 plus the central bank's interest rate cut by 25 basis points in September 2020 is 52%. At present, the market-oriented pricing of interest rates and the central bank are most likely to cut interest rates at 5438+00 in June, with a probability of 65%.
ECB: It will remain inactive for the foreseeable future.
In 2020, the European Central Bank will keep its current policy unchanged for some time. This is because Lagarde, the new president of the European Central Bank, will use her first few months in office to seek consensus among monetary policy makers. Previously, the last president of the European Central Bank forcibly adopted its loose monetary policy when he left office, which caused differences within the European Central Bank. Until monetary policymakers reach an understanding, it is expected that the European Central Bank will remain inactive for most of 2020.
According to the euro zone overnight index swap, traders believe that it will take a long time for Lagarde, the new president of the European Central Bank, to readjust monetary policy: at present, the possibility of the European Central Bank adjusting interest rates to June 5438+February 2020 is only 9%. Unless economic activity deteriorates seriously, the European Central Bank under Lagarde will stay on the sidelines for most of 2020.
Federal Reserve: It is unlikely to change its policy in the first half of 2020.
The Federal Reserve has made it clear that it is currently in the suspension stage of the interest rate cut cycle, and Federal Reserve Chairman Bauer also said that the possibility of raising interest rates in the near future is almost zero. Like the Bank of Canada and the European Central Bank, the Fed's attitude towards monetary policy is wait and see in the short term.
According to the federal funds futures, the interest rate market does not expect the Fed to adjust its monetary policy in the next few months. 1 month, the probability of staying put is 9 1%, the probability of staying put before July 2020 is 65%, and the probability of adjusting interest rates and reducing interest rates by 25 basis points in September 2020 is 54%.