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Dollar and Yields Surge Amid Anticipated Fed Rate Hike

The Dollar index rebounded from a one-year low, and treasury yields increased on Friday following a decline in U.S. retail sales. Although the economy appears to be slowing, the Federal Reserve is expected to raise interest rates again in May.


Fed Rate Hike Expectations Grow Despite Strong Retail Sales

Traders of futures connected to the Fed's policy rate raised bets on the U.S. central bank increased its benchmark rate by another quarter of a percentage point next month. This comes although data showing retail sales were stronger than anticipated.

U.S. Retail Sales Drop, Previous Data Revised

According to the Commerce Department, retail sales fell by 1.0% in March. Data for February was revised to show a 0.2% decline in retail sales instead of the previously reported 0.4% drop.

Gold Retreats as Dollar Rallies, Fed Governor Supports Rate Hike

Gold prices pulled back from near-record highs as the Dollar strengthened. Fed Governor Christopher Waller added weight to the prospect of another rate hike, stating that the central bank's lack of progress on slowing inflation necessitates higher rates.

Fed Hike Probability Rises After CME Group's FedWatch Tool Update

Futures now indicate an 81.6% chance of the Fed raising its lending rate by 25 basis points after their two-day meeting on May 3. This probability is up from 67% on Wednesday, as CME Group's FedWatch Tool shows.

Major U.S. Stock Indexes Decline, Financials Limit Losses

Major U.S. stock indexes fell as financials limited losses in the S&P 500. JPMorgan Chase and other banks rallied after their quarterly results were released. However, guidance remains uncertain for the upcoming quarter.

European and Asian Markets Show Mixed Results

While the broad STOXX 600 index in Europe rose for a fifth consecutive session, Asian shares gained after the Monetary Authority of Singapore left policy unchanged. The euro dipped due to expectations that the European Central Bank will continue to raise rates.

Oil Prices Climb Amid Rising Global Demand

Oil prices increased, heading for a fourth consecutive week of gains, as the West's energy watchdog projected global demand to reach a record high this year. A recovery in Chinese consumption drives this growth.