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Posted November 19, 2025 at 2:51 pm
The Chinese central bank is largely expected to keep rates unchanged at its November meeting. It would mark the sixth consecutive month of pauses, as officials in Beijing are likely to resort to fiscal measures rather than monetary to stimulate activity in the world’s second-largest economy. Members of the institution have signaled reduced dovishness and have been maintaining a neutral posture on the bank’s benchmark. Our IBKR ForecastTrader prediction market points to 90% odds of a hold with over 1k contracts open that are tied to tonight’s decision.
Real-time measures of economic conditions point to a short-term deceleration, driven mainly by the adverse effects of the government shutdown, but also due to tired consumers and stock market volatility that is capping personal expenditures. The average figure in the fourth quarter thus far is 2.2% and the trend has been lower. My analysis supports my belief that the “No” contract at 2.5% is undervalued at $0.75, as it’s a level that has only been exceeded a handful of times in the second half of the year. Additionally, I see value at the 2.6% threshold as well; it’s going for $0.93.
Hong Kong’s Consumer Price Index (CPI) is volatile, and it has been trending lower, and has fallen to a yearly low of 1% in July. The median expectation for tomorrow’s print is at 1.2%, but in a Reuters poll consisting of eight forecasters, estimates range from 0.9% to 1.5%. My projection is 1.1% and due to the indicator’s wild swings, I find value at the 1% “No”, which is costing $0.09. The trade delivers a profit on a figure of 1% or lower, and I think the pricing should be closer to $0.23.
Japan’s CPI is expected to increase to 112.3 from 112 in September and because I don’t envision a steady number or a decline, I see value at the “Yes” contracts from 110.4 to 112; they’re ranging in price from $0.62 to $0.93.
Source for images: ForecastEx
Note: Prices are highest bids as of the morning of Nov. 19, 2025. Red circles around the thresholds were inserted by J. Torres to highlight Yes” and “No” answers throughout different levels.
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This material is from IBKR Macroeconomics, an affiliate of Interactive Brokers LLC, and is being posted with its permission. The views expressed in this material are solely those of the author and/or IBKR Macroeconomics and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
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