The CME Fed Watch has increased its odds of a US rate hike in 2016 with a 38.30% chance of an increase to 0.75% by December. This is a sizable jump from the 32.00% chance of a rate hike being reported last week prior to the latest data on US payrolls. Although highly unlikely, the probability of a September rate hike has remained mostly unchanged after briefly climbing, with the chances of action currently standing at 12.00% according to futures markets, mirroring the 12.00% expected last week at this time. The Fed will meet again September 20th and 21st for its 6-week FOMC meeting to vote on whether to leave interest rates unchanged, raise them, or hint at a time frame for a future rate increase. Until then, payroll data for August will be released and depending on the direction of the data’s results, will have major implications on their decision.
Greenback Continues to Strengthen on Back of Strong Payrolls
Daily Analysis - 09/08/2016