May 18, 2016    1 minute read

Strong US Data Bolsters Second-Quarter Growth Prospects

   May 18, 2016    1 minute read

Strong US Data Bolsters Second-Quarter Growth Prospects

US consumer prices recorded their biggest increase in more than three years in April as gasoline and rents rose, pointing to a steady inflation build-up that could give the Federal Reserve ammunition to raise interest rates later this year.

Trader’s remarks: The combination of higher prices, housing gains and industrial production support the narrative of a second-quarter rebound in GDP, and will stir talks of the necessity of at least one Fed hike later this year. Financial markets have almost priced out a rate hike before September, given sluggish growth at the beginning of the year. However, a growth rebound in the second quarter might make a rate hike in June possible.

What to watch: S&P 500 Index, USD/GBP, USD/EUR

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