"Since the speech by the FED Chair, Janet Yellen on May 27th, before the payroll data, hike odds for June declined from 30% to zero, as of latest. A major chunk of the decline from 21%, came after the payroll disappointed. But it is actually the British upcoming British referendum that kept the traders from pricing a hike in June, even before the jobs report, despite several warning by FOMC members.Now, hike odds are moving further south. On Monday, traders were pricing a possibility of a hike in November, which got pushed back to December as of now.
The Dollar slid further this week against both developed market and emerging market currencies. The Dollar index, which is the value of Dollar against a basket of currencies, is currently trading at 93.54, down -5.2% so far this year. The Euro moved up above 1.14 against the Dollar and Silver shot up above $17 per troy ounce.
The Market is now pricing no chance of a hike in June, only 25% chance of a hike in July and 41% chance in September. Previously early in the week, the market was pricing 51% chance of a hike in November, which has been pushed back to 45%.
Only in December, the market is pricing 60% chance of a hike of 25 basis points and 18% chance of a second hike taking place." |
