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Bond Traders Expect Interest Rate Hike in December

Futures contracts put chances of increase next month at 78 percent.

By Wes Goodman and Anchalee Worrachate, Bloomberg | Updated on November 04, 2016

Bond traders are becoming more certain the Federal Reserve will raise interest rates next month as economists say a U.S. jobs report Friday will show enough improvement to justify such a move.

The chance of a rate increase at the Fed’s December meeting rose to 78 percent, the highest since March and up from 69 percent at the end of last week, futures contracts indicate. The report will show employers added 173,000 workers in October, versus 156,000 in September, according to a Bloomberg survey of economists. Even so, Treasuries rose as investors sought relatively safe assets in the run-up to next week’s U.S. election.

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