Odds of a Fed rate hike in March surge

Yellen's remarks follow hawkish comments in recent days from a slew of Fed speakers and cement a likely rate hike at the Fed's next meeting on March 15.

Most analysts now expect the Fed to push rates higher by another 0.25 per cent in March, following the hike in December. The question is whether the official who matters most - Chair Janet Yellen - will add her own voice to that impression.

The reality is that the current environment-whether it is low financial stress, ultra-low market volatility, good United States dataflow, firmer USA inflation, the fact the Dollars has given up half of its post-election gains, stocks at the all-time highs, Treasury yields well off the recent highs (even after the latest move), and the fact that the global economic backdrop has improved-makes a March hike extremely "digestible".

The Federal Reserve is set toraise its benchmark interest rate later this month as long aseconomic data on jobs and inflation holds up, Fed Chair JanetYellen said on Friday, in comments that likely cement a ratehike at its next meeting.

"If we look at gold's performance over the course of the last five trading sessions, prices have hardly dropped at all, telling us that funds remain committed to the precious metal in light of what they view to be an uncertain U.S. legislative outlook", Meir said. He said "most of the data we've seen over the last couple months is very much consistent with the economy continuing to grow at an above-trend pace, job gains remain pretty sturdy, inflation has actually drifted up a little bit as energy prices have increased".

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Brainard's words came after New York Fed President William Dudley and San Francisco Fed President John Williams both expressed support for a rate-hike in the near future on Tuesday.

What is different this year is that traders are actually falling into line with the March rate-hike view and the Fed's current forecast for three rate hikes this year. "The general economic conditions and proximity to the full employment and price stability goals are sufficient, and officials are simply looking for appropriate opportunities". It was its first increase since December 2015, when the Fed raised its key rate from a record low. As of Friday mid-day, the odds of a March rate hike were above 75 percent, according to CME Group's FedWatch program, up from only 25 percent at the beginning of February.

Given how integral strong services growth is to United Kingdom economic stability, a large drop is likely to exacerbate existing concerns about how the United Kingdom economy will fare once Brexit has been completed.

Japan's Nikkei soared 1.1 per cent, buoyed by a weaker yen.

Also, economic data indicated inflation was close to the Fed's target of 2 percent. The Fed managed just one.

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