U.S. rates futures fall after strong payrolls data

NEW YORK Fri Nov 8, 2013 9:23am EST

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NEW YORK Nov 8 (Reuters) - U.S. short-term interest rates futures fell on Friday after data showed surprisingly strong U.S. jobs growth in October, reinforcing expectations the Federal Reserve would raise its policy rate by the middle of 2015.

The Labor Department said U.S. employers added 204,000 workers in October, far more than the median forecast of 125,000 among economists polled by Reuters. The September figure was upgraded to 163,000 from the originally reported 148,000.

The April 2015 federal funds contract fell 2.5 basis points to 99.755, while the June 2015 contract declined 3.5 basis points to 99.655.

These levels implied traders expect a 47 percent chance the U.S. central bank will hike rates in April 2015 and a 55 percent chance of a rate hike in June 2015, according to CME Group's FedWatch program which calculates traders' expectations on the changes to Fed's policy rate.

On Thursday, the April 2015 fed funds contract suggested a 43 percent chance of a rate hike and the June 2015 contract a 51 percent chance.

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