US Dollar: Fed pricing shifts with softer data – Deutsche Bank
Deutsche Bank strategists note that Friday’s mixed United States (US) Nonfarm Payrolls (NFP) report led to a notable repricing of September Federal Open Market Committee (FOMC) odds, with futures-implied probability of a hike falling to 44%.
Deutsche Bank strategists have noted that the mixed US Nonfarm Payrolls (NFP) report released on Friday led to a significant revision in the Federal Open Market Committee (FOMC) odds for September. The probability of a rate hike dropped to 44%. The strategists expect a stable labor market and modest gains in US Consumer Price Index (CPI) and Producer Price Index (PPI), along with steady retail sales and softer University of Michigan (UoM) sentiment data.
The report, while mixed, was seen as consistent with a broad stability in the labor market rather than a sharp deterioration. With the mixed NFP report, traders will closely monitor the July US CPI data released on Wednesday, which could significantly impact the September FOMC pricing.
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