Bonds, USD will stay strong as rates rise

INVESTORS now seem to be fairly well set up for a US Federal Reserve interest rate hike in December and even among those who are more dovish, the majority still expect lift-off at some point in the coming months.

It feels that the hurdle to policy normalisation has been lowered since the last US employment report.

Indeed, it might be more accurate to say that the hurdle to not tightening has been raised; it is plausible that the Fed might already have hiked rates, were it not for the confluence of a number of external factors (global growth, trade patterns, market volatility, commodity prices, geopolitical risk, shifting socio-political trends).