After the release of PPI data, money markets lowered the probability of a 50bps rate hike by the Federal Reserve in December.

On Nov. 13, data from the London Stock Exchange Group showed that, after the US October producer price increase came in below expectations, the probability of a 25-basis-point rate hike by the Federal Reserve in December rose relative to the likelihood of a 50-basis-point hike. The PPI index increased 0.3% month-on-month, below analysts' expected 0.4%; year-over-year figures rose 6.5%, below the anticipated 6.6%. Following the data release, money markets indicated a 91% probability of a 25-basis-point Fed rate hike, up from 86% prior to the announcement, while the probability of a 50-basis-point hike dropped from 14% to 9%. (Jin10)