Probability of Fed hiking in October looks high

The market is pricing in a roughly 20% probability of the Fed hiking at the October meeting (Nov-Sep FF spread of 4bp) a and roughly 40% likelihood of the Fed hiking at the December meeting (Jan-Nov FF spread of 8bp) for a total probability of 60% of one hike by the end of this year. 

"Despite the strong consensus at the Fed for hiking at least once this year, the 60% likelihood looks reasonable, particularly as international developments are more uncertain", says Barclays. 

The probability of hiking in October looks high but recommend waiting for a better entry point for extending into Nov FF contracts.