STIR markets within the $-bloc have shown varied performances over the past three weeks. Australia and Canada have outperformed, softening by 11-12bps in year-end expectations, while the US remains unchanged.

• Yesterday, the FOMC Minutes for the May meeting delivered no major reaction from US STIR. “Participants noted disappointing readings on inflation over the first quarter and indicators pointing to strong economic momentum, and assessed that it would take longer than previously anticipated for them to gain greater confidence that inflation was moving sustainably toward 2%,” the minutes said. Some officials also appeared willing to contemplate interest rate increases if conditions appear to worsen.
• In contrast, New Zealand is approximately 20bps firmer, with most of the movement occurring after yesterday’s RBNZ policy decision. The central bank indicated that it expects to maintain tight monetary policy for an extended period due to domestic inflation pressures.
• December 2024 expectations and the cumulative easing across the $-bloc stand at: 4.95%, -39bps (FOMC); 4.36%, -64bps (BoC); 4.27%, -8bps from an expected terminal rate of 4.36% (RBA); and 5.27%, -23bps (RBNZ).