Fed rate hike bets dropped after US retail sales report

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 14, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The probability of a 25 basis points rate dropped across the board after the US retail sales report missed expectations on all fronts.

    The latest data from the CME Fed watch states the probability of a rate hike in Oct dropped to 6% vs 8% yesterday. On similar lines Dec dropped to 30% vs 39%. However, 2015 rate hike was largely out of question heading into the report.

    Moreover, markets were seeing a 42% probability of a 25 bps move in March 2016, which now has dropped to 39.3%. Meanwhile, the probability of the status quo has shifted higher from 41% to 49.4%.

    Even the two-year treasury yield, which mimics rate hike bets, dropped more than five basis points.
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