Yesterday Purchasing Managers Index data supported that an interest rate hike looks likely to occur in 2016. The Federal Reserve who suggested there would be 4 hikes this time last year are currently expected to deliver just the one in 2016.
The US Dollar has remained particularly strong despite Trumps shock election victory and much of this support is down to the expectation of a hike. Yesterday Chicago’s Fed President Charles Evans said a period of interest rate hikes are on the cards, however this has been met with slight scepticism after the year just gone. Evans did however point to the employment market being tight, but did point out that wage growth remains weak.
The Feds interest rate decision this month is one of the most anticipated for a long time and there is a general consensus that one hike could bring a few more.
Fairly Quiet Data for the Rest of the Week
The rest of this week is fairly quiet on the data front for the US however that doesn’t mean the markets will be. Donald Trump this week was more than happy to point criticism China’s way in almost a show of strength that he’s not afraid of anybody.
Mr Trump has nearly completed building his government and it looks as if there is going to be no time wasted. There is a growing expectation that the moment his inauguration is completed there will be a change in policies. Over the next few weeks it will be interesting to see what he’s planning to change and it’s safe to say its not going to be a quiet Christmas for his team.