The Reserve Bank of Australia (RBA) also meets Tuesday and is certain to hold at 4.35%, though there is a chance it might further water down its tightening bias.
Likewise, the Federal Reserve is considered certain to keep U.S. rates at 5.25-5.5% on Wednesday and all eyes will be on the FOMC dot plots for rates and inflation.
Analysts assume policy makers will look through the recent run of unhelpfully high inflation readings as a seasonal and statistical aberration, but there has to be a risk the median dot plot shifts to two 25 bps rate cuts this year rather than the former three cuts.
Futures now imply around a 58% chance of a first rate cut in June, compared to 75% a week ago, and have about 73 basis points of easing priced in for this year.
Much will depend on what tone Chair Jerome Powell chooses to adopt at his post-meeting media conference, with cautious optimism being favoured recently.
The Bank of England (BoE) meets Thursday and is likely to hold at 5.25% – a cut is priced as a 2% chance. A first easing in June is put at 50-50, with 25 bps fully priced in for August and 60 bps for all of 2024.
Inflation data for February is due on Wednesday and the outcome could set the tone for the meeting.
Markets see rather more chance – around 29% – the Swiss National Bank (SNB) could trim its 1.75% rate on Thursday. Consumer price inflation is running 0.6 ppts below the bank’s 1.8% first-quarter forecast, while core inflation of 1.1% is the lowest since January 2022.
The Swiss franc has eased from record highs on the euro over the last couple of months, breaking through the floor of a huge upward trend channel stretching back to early 2021.
Yet, the franc’s real effective exchange rate is still the highest it’s been since a brief crisis-induced spike in 2011 and a major disinflationary drag on the economy, arguing for lower rates now that the SNB has backed away from intervention.
