Will They or Won't They?

The services ISM in the US quite a slowdown in May from 51.9 down to 50.3, so only just in expansionary territory. The resilience of services really has caused people to think that how that feeds into services inflation is going to keep the pedal to the metal as far as the Fed is concerned. And certainly, bond yields were about four to five basis points higher in the Tokyo section yesterday and that's reversed into small declines. So I think that justifies that sort of tilted market thinking about Fed rate height next week. But we would not be at all surprised if we do get a 25-point rise.