Lagarde Powell skydive meme

We saw the Bank of Canada signal a shift to the sidelines this week but that's not likely to be the case with the trio of major central banks due to weigh in next week.

First up is the FOMC decision on Wednesday and the market isn't pricing in any drama around Powell and the Fed. They've strongly signaled a slowdown in the pace of rate hikes and that has the market pricing in a 97% chance of 25 bps and only the slightest tail risk of 50 bps. Given the enthusiasm in markets, I'd put the odds of 50 bps slightly higher.

The following day features both the ECB and BOE decisions. The ECB is expected to hike rates by 50 bps to 2.50% and that's priced at 86% but there's a 14% chance of 75 bps. I think the odds here of 75 bps are too high. There have been so many signals about back-to-back 50 bps moves from the ECB that I don't see the need to shift.

Of the three, the BOE is the least certain in terms of market pricing. The rates market sits at 70% for 50 bps and 30% for 25 bps. The market will be looking at the voting here as the uncertainty is high around the future rate path.