The US labour market remains tight, and raises the chance that the Federal Reserve has to lift interest rates at least once more.
The bond market is speculating that the Federal Reserve will lift interest rates at least once more on fresh evidence that the US labour market is still too tight.
“The strong labour market trends and sticky core services inflation mean that the Fed will likely hike the Fed funds rate by 25 basis points at the May Federal Open Markets Committee meeting, with the June meeting remaining in play for a final 25 basis points rate increase,” according to TD. The inversion in the US yield curve between two-year and 10-year rates widened to -58 basis points, from -53 basis points on Thursday. When short-term borrowing rates exceed longer-term ones, it is a reliable indicator of recession in the next 12 months. The US curve has been inverted since July.
Oil prices edged up with Brent crude 0.5 per cent higher at $US85.57 a barrel. West Texas Intermediate crude also rose 0.5 per cent, to $US81.08.OPEC+, the Organisation of the Petroleum Exporting Countries and ally Russia, issued a surprise pledge to cut production.The Australian dollar held steady at US66.70¢. It fell 0.2 per cent last week after the Reserve Bank kept the cash rate on hold at 3.
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