Following the excellent jobs report, there is a growing chance for a hike in September and not in June.
Here are opinions from Dankse and Deutsche Bank:
Here is their view, courtesy of eFXnews:
The view from Danske:
The US job report for May was strong, with 280,000 new jobs added to employment (consensus 226,000). Net revisions to March and April were also positive at 32,000. This lifts the three-month average monthly job growth just above 200,000, which is the pace we believe marks the threshold for a first Fed funds rate hike in September.
The bottom line is that the employment report supports our view that the Fed will hike in September. This is still earlier than currently priced into the market, although today’s strong report resulted in a sell-off in US fixed income markets.
“In summary, today’s employment report was another indication that the labor market is recovering solidly from the Q1 soft patch. For Fed policymakers, the sturdy payroll gain coupled with a modest upshift in average hourly earnings provides further evidence that the labor market is approaching full employment,” DB argues.
“In turn, we continue to expect the Fed to begin the process of monetary policy normalization at the September meeting,” DB projects.
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