US: Rate hike expectations should pick up - BNP

Alexandra Estiot, Research Analyst at BNP Paribas, notes that taking into account recent US economic data, rate hike expectation should begin to pick up.

Key Quotes:

“The labour market’s dynamic momentum has been confirmed, with robust job creations, low unemployment rate, rebound in the labour participation rate and wage growth.”

“ISM surveys point to a rebound, an improvement that could be sustained if upbeat “production” and “new orders” components are a guide.”

“After a first quarter promising disappointment, a rebound seems to be taking shape. Under these conditions, there would be nothing surprising about renewed expectations of a key rate increase in June. Janet Yellen reaffirmed the FOMC’s attachment to a data-dependent policy. Positive statistics thus should lead the financial markets to increase the probability given to a June rate increase.”