Bank of Japan Warns of Regional Economic Risks Amid Middle East Conflict and Rising Oil Prices 
RBI Holds Interest Rates Steady Amid Middle East Tensions and Global Uncertainty 
Citigroup Delays Fed Rate Cut Forecast Amid Strong Jobs Data and Inflation Concerns 
RBA's Hauser Flags Uncertainty on Rate Settings Amid Iran War Economic Risks 
Bank of Japan's Ueda Flags Low Real Interest Rates as Key Factor in Rate Hike Timing 
RBI Clamps Down on Rupee NDF Activity, Banks Face Steeper Losses 
Federal Reserve Probes Big Banks Over Private Credit Exposure Amid Growing Systemic Risk Concerns 
RBNZ Holds Rates at 2.25% as Middle East Conflict Fuels Inflation Concerns 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
From just 12 percent in July, the probability of a rate hike from the U.S. Federal Reserve has risen to 60 percent. Several hawkish speeches by FOMC members at Jackson Hole Symposium in August pushed the probability higher in addition to better than expected economic releases from the United Kingdom.
So far the data released from the UK have been indicating better than expected weathering of the referendum by the United Kingdom and an immediate recession there seems unlikely. The saturation in China, which has also been a major concern at the beginning of the year, has somewhat settled and no immediate crash is expected. U.S. labor market, which has shown some weakness in April and May, has proved the weakness to be only temporary. In the second quarter of this year, unit labor costs have jumped by 4.3 percent.
After the speeches in Jackson Hole, the market is becoming alive to the idea of a rate hike as early as this month and if today’s NFP report turns out to be a blockbuster, the probability is likely to hit 75 percent, which should provide some interim support to the dollar. The market has started pricing a second hike too, for which the probability now stands at 15 percent.
