US data to hone rate hike expectations – Lloyds Bank

By FXStreet Analysts from Lloyds Bank expect next week US data, that includes the NFP, to support a rate rise in June.

Key Quotes:

“Despite pronouncements by Fed officials that the next meeting is ‘live’, markets are pricing in only roughly a 10% probability of a hike in April and less than a 50% likelihood of a rate rise in June.”

“The key release next week is the US labour market report (Fri), which we expect to show a robust rise in nonfarm payrolls of 225k in March, while the unemployment rate is forecast to remain steady at a cyclical low of 4.9%. Annual earnings growth is expected to stay unchanged at a relatively modest 2.2%, though we could see a firming of the February core PCE deflator (Mon), the Fed’s preferred measure of inflation, to 1.8%y/y.”

“With domestic demand expected to remain the driver of overall growth, February personal spending figures will be closely watched, especially as the latest retail sales figures point to a cautious start to the year. Overall, we expect the dataflow to support a rate rise in June.”
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Source:: FX Street