US reflation theme continues - ANZ

Sharon Zollner, Senior Economist at ANZ, suggests that strong US data overnight saw markets price in more Fed tightening over the year ahead.

Key Quotes

“A December hike is already priced at 100% odds, but markets are now putting decent odds on a follow-up move by June. The US dollar surged in response, and long-run yields lifted again. Risk appetite and equities held up pretty well in response, but one does wonder when the two sharp recent moves charted below – US long rates and the US exchange rate versus the Chinese yuan – are going to become problematic in their own right (for markets or politicians).”