About the 'Fed will hike in September' thing...
Lift off? Push back. Those expectations for a September rate rise are crumbling.
Bloomberg data show that the implied probability of a September hike has now dropped to 30 per cent. It was 34 per cent on Friday and 40 per cent this time last month, writes Katie Martin.
Accordingly, US government debt is in demand. The yield on the country's 10-year bonds now stands at under 2 per cent, down by 0.04 percentage points so far today. (Lower yields reflect higher prices.)
Deutsche Bank's Jim Reid notes:
We always thought something would get in the way of the Fed raising rates in September and we're perhaps seeing this now.
This week's Jackson Hole get-together of central bankers could not come at a better time.
Moyeen Islam at Barclays says:
While a full speaker schedule has not been confirmed, keynote speakers and panellists include Fed Vice Chair Fischer. Fischer in particular has always been more mindful of the global backdrop than many Fed speakers and so his comments will be especially closely watched. The market is currently pricing the first full 25bp move from the Fed by January but a dovish stance from Fischer could see that pushed out to March/April. The risk of a delay in the Fed lift-off is increasing.