Markets now see 73% probability of 75 bps Fed rate cut next week

Traders now see 73% chance that the US Federal Reserve will cut its benchmark interest rates three-quarters of a percentage point next week, compared to 84% seen during Monday's Asian trading hours, according to CME's FedWatch tool. 

In fact, during the North American trading hours, markets were pricing in near-100% odds the Federal Reserve will drive interest rate targets down to zero percent next week. That probability, however, has dropped sharply to levels below 30%. 

The Fed cut interest rates by 50 basis points to 1.25% last week. The move, however, failed to bring cheer to the financial markets. The Dow Jones Industrial Average tanked by over 2,000 points on Monday as prospects of an all-out oil price war between Saudi Arabia and Russia bolstered the coronavius-led risk aversion.