Strong Data Shapes Expectations, Fed Rate Cut Probabilities Fall

The likelihood of the Fed initiating rate cuts in June has fallen to around 56%, down from 63.8% last week. Strong growth and inflation data from the US, bringing the market's projections closer to the Fed's, signals a shift to a more hawkish stance.

This week's employment figures will significantly influence market expectations regarding interest rates. The ADP private sector employment report will be released on Wednesday, followed by nonfarm payrolls on Friday. Projections suggest ADP figures might rise from 140,000 to 149,000, while nonfarm payrolls are expected to decline from 275,000 to 205,000.