Markets still expect Fed to hike in June, despite patchy data - ANZ

Analysts at ANZ explained the US data from overnight.

Key Quotes:

"US personal and spending came in weaker than expected in March, with downward revisions to February. Personal income rose 0.2% m/m (mkt: 0.3%) while personal spending was unchanged (mkt: 0.2%). The data confirm the moderation in Q1 personal consumption revealed in the GDP data last week.

The core PCE deflator fell 0.1% m/m (+1.6% y/y) – the largest monthly fall since 2001, although this was in line with expectations and largely led by temporary factors.

The April ISM also disappointed, coming in at 54.8 (mkt: 56.5; last: 57.2) with new orders and employment falling.

Despite the patchiness of the data, and the lack of clear inflationary signal, markets are still pricing in around 70% odd of a Fed hike by June."