How the probabilities have changed
There is virtually no chance of a US rate hike this month and a swindling probability of any move this year, according to the interest rate market.
August nonfarm payrolls were soft and wage growth disappointed. Normally, that would have led some of those who were betting on a December rate hike to back away but the interest rate market has edged in the other direction.
The implied probability of a Dec 13 rate raise has actually risen to 34.1% from 33% before the data. That's part of a reversal in the board bond market after the data. It may reflect calendar effects and a strong ISM manufacturing index.
