Markets Re-Pricing for June Liftoff

Market Trends - 19/05/2016

Federal Reserve policy makers could hike rates as early as June, minutes from the Federal Reserve's April 28th meeting showed yesterday. Despite policy makers voting to keep rates unchanged in April, members opined that a pickup in the US economy with strengthening labor and inflation could warrant another rate hike next month. The futures markets upped its implied probability to 33% after the minutes.

Despite a slow start to the first quarter, recent economic data has showed evidence of a rebound in the US economy. US retail sales surged its highest in April while inflation was also seen edging closer to the Fed's target rate. Meanwhile, the April jobs report was rather soft in comparison with the US economy adding 160k jobs, but the unemployment rate was unchanged at 5.0% for two consecutive months.


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