Federal Reserve

Fed funds futures now pricing first rate hike in March 2016 after weak jobs data

Fed funds futures plunged after the weak September jobs report, with the market now pricing the first better-than-average chance of a rate hike in March 2016.

According to the CME Group's FedWatch tool, markets are now pricing a 2 percent chance of a rate hike this month, versus 14 percent previously; a 29 percent chance in December versus 44 percent beforehand; 39 percent in January versus a prior 52 percent; and 51 percent next March.

The U.S. economy created 142,000 jobs in September, a number that badly missed expectations.

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While the FedWatch tool pointed to a March rate hike, RBS said swaps data suggested the market was pricing the first rate hike into June of next year.