Daily Market Digest: FOMC Minutes, Australia Jobs Report, UK Retail Sales

Image via John Sonderman / Flickr

Hawkish surprise from the FOMC meeting minutes sends the US dollar higher across the board. Australia’s April jobs report shows unemployment rate unchanged. UK’s retail sales post a surprise surge in consumer spending.

Today’s Economic events

Japan core machinery orders m/m 5.50% vs. -1.90%

Australia employment change 10.8k vs. 12.1k

Australia unemployment rate 5.70%. vs. 5.80%

UK retail sales m/m 1.30% vs. 0.60%

ECB releases monetary policy meeting accounts

Canada wholesale sales m/m -1.0 % vs. 0.50%

US Philly Fed manufacturing index -1.8 vs. 3.2

US weekly unemployment claims 278k vs. 276k

Coming up

FOMC Member Fischer speech

CB Leading Index

FOMC Member Dudley speech

FOMC minutes hawkish

The Federal Reserve is more likely to hike interest rates in June if economic data in the US shows an improvement, the Federal Reserve’s meeting minutes showed yesterday. Despite leaving interest rates unchanged by a nearly unanimous vote, the minutes revealed a more hawkish tone among the Fed members. The views expressed by most policy makers in April, suggests that the central bank is closer to hiking rates once again.

The minutes showed the willingness among policymakers to hike rates if the US economic data pointed to a stronger second quarter growth with firming expectations on inflation and employment. The meeting minutes came as a surprise and was followed by the markets tweaking their expectations. The CME Group’s FedWatch tool saw an increase in the probability of a 25bps rate hike at the June 15th meeting. The implied probability increased to 33.80% from 15% previously. A month ago, the futures markets had a 1.20% probability of a June hike.

“Most pointed to the steady improvement in the labor market as an indicator that the underlying pace of economic activity had likely not deteriorated” the minutes showed.

Australian unemployment rate steady at 5.70%