The Fed's probability of maintaining interest rates in September increased to 58.6 per cent

THE CME “FEDERAL RESERVE WATCH” DATA SHOW THAT THE FED'S PROBABILITY OF MAINTAINING INTEREST RATES CONSTANT IN SEPTEMBER ROSE TO 58.6 PER CENT, AND THE PROBABILITY OF A CUMULATIVE INCREASE OF 25 BASIS POINTS DECREASED FROM 41.4 PER CENT TO 43.0 PER CENT IN OCTOBER, TO 46.0 PER CENT AND TO 11.0 PER CENT. MARKET EXPECTATIONS OF THE FED ' S SHORT-TERM MONETARY POLICY PATH HAVE BEEN MARKED BY SIGNIFICANT DIVERGENCES, REFLECTING AN INCREASE IN INVESTORS ' COMPETITION FOR INFLATION VIS-À-VIS ECONOMIC RESILIENCE. PROBABILITY FLUCTUATIONS IN INTEREST RATES REMAIN CONSTANT, SUGGESTING THAT MARKETS ARE REASSESSING THE END-POINT OF THE AUSTERITY CYCLE, WITH THE EXPECTED INCREASE IN INTEREST RATES PUSHING PRESSURE ON SHORT-TERM FINANCING COSTS DIRECTLY. THE CURRENT MARKET SENTIMENT IS SHIFTING FROM BLIND OPTIMISM TO PRUDENTIAL DEFENCE, AND THE FLOW OF FUNDS WILL FURTHER CONCENTRATE ON RISK-AVERSE ASSETS。