After disappointing payroll number on Friday, which showed headline gains of just 38,000, market participants rolled back their expectations for future hikes from US Federal Reserve. Last two month’s payroll numbers also saw downward revisions to the tune of 59,000.
Before the payroll report market was pricing 21 percent chance of a hike in June and more than 50 percent chance of a hike in July.
Weaker NFP report dealt a severe blow to the expectations.
As of Now,
- Market is pricing just a 4 percent chance of a hike in June, thanks to British referendum and disappointing NFP.
- Probability of no hike in July is at 66 percent.
- Likelihood of a September hike currently stands at 46 percent.
It is not until the November, Market is pricing a hike and that too a feeble one. Fed funds future shows just 51 percent chance of a hike. December odds look more convincing, with 63 percent odds.
Chance of a second hike this year has fallen below 20 percent.
Hence, dollar is weak and trading around 94 area.
The material has been provided by InstaForex Company – www.instaforex.com