With U.S Treasury yields backing up, fixed income dealers are pricing in the possibility that there will be four Fed rate hikes this year and not the three they signaled in March. Given U.S economic growth and signs that domestic inflation could be picking up, fed fund futures are pricing a +53% chance of four hikes, up from +48% on Monday and +33% a month ago. Expectations for tomorrow’s European Central Bank (ECB) meeting are for a ‘low key’ event. The central bank’s ongoing forward bias would suggest that there is no chance of any change in the overnight base rate. Since last month’s ECB’s meeting, the eurozone ... (full story)