Rate hike ahead

Encouraging news on jobs growth in the US has effectively ended uncertainty over whether the Federal Reserve will raise interest rates. Oliver Holtaway asks what impact the widely anticipated rate rise may have on European investors

Key points • The Federal Reserve is widely expected to raise interest rates as early as June.
• It is thought that rates could rise by 125 basis points by year-end.
• Spread volatility is likely to continue until the pace of the rate rise becomes clear, and investor confidence is restored.
• European investors should avoid much of the contagion from US rate rises.

When the US non-farm payrolls report was

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