3 Feb 2015
Expect a mid-2015 rate hike by Fed – BNZ
FXStreet (Barcelona) - The Research Team at BNZ, comment on the UST market and Fed rate hike timing.
Key Quotes
“The outlook for offshore rates will be determined by the end of week US payrolls report. Consensus looks for a solid 235k outcome and for the US unemployment rate to remain at 5.6%.”
“With the market currently focused on downside risks to inflation it would likely require a chunky positive surprise to elicit a sharp rise in yields (US 10-year Treasury yields fell to 1.64% over Friday seemingly more on risk aversion rather than the disappointing US Q4 GDP release). If this were to occur moves would most likely be felt at the front-end of the US curve.”
“Fed Fund Futures now price that Fed will not raise rates until late 2015 and only be 1.0% by end of next year. We expect a hike mid-2015.”
Key Quotes
“The outlook for offshore rates will be determined by the end of week US payrolls report. Consensus looks for a solid 235k outcome and for the US unemployment rate to remain at 5.6%.”
“With the market currently focused on downside risks to inflation it would likely require a chunky positive surprise to elicit a sharp rise in yields (US 10-year Treasury yields fell to 1.64% over Friday seemingly more on risk aversion rather than the disappointing US Q4 GDP release). If this were to occur moves would most likely be felt at the front-end of the US curve.”
“Fed Fund Futures now price that Fed will not raise rates until late 2015 and only be 1.0% by end of next year. We expect a hike mid-2015.”