COLLINS: QT TAPER IS ABOUT MAKING SURE WIND DOWN IS ORDERLY

MNI BRIEF:Canada Mortgage Holders Uneasy About Making Payments

MNI BRIEF:Fines For Banks Missing Climate Goals-ECB's Elderson

MNI China Daily Summary: Wednesday, May 8

MNI BRIEF: China Attended DEPA Negotiations - MOFCOM

MNI: PBOC Net Injects CNY2 Bln Via OMO Weds; Rates Unchanged

EZ/UK Bond Supply Calendar: Spain, Ireland Auction on Thursday

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Thursday

US EIA: CRUDE OIL STOCKS EX SPR -1.36M TO 459.5M MAY 03 WK

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Bear Steeper With Powell In Focus Tomorrow Before FOMC Blackout

US TSYS
  • Cash Tsys sit 5.5-8.5bp cheaper on the day, led by 10s but with the very long end lately extending session lows. It’s a move that reverses yesterday’s rally after yesterday's month-to-date (and for 2s, multi-month) lows in yields.
  • There has been a deluge of data today, none of it providing enough of a catalyst to promote an extension of the recent large rally. For instance, core PCE was close to expected at 0.16% M/M but the distribution of known Q3 downward revisions were about as hawkish as they could have been and continuing claims appeared to have a significant seasonal adjustment skew that makes the underlying data less worrisome than headlines suggest. It was then followed by a much stronger than expected MNI Chicago PMI.
  • Long positioning, both in terms of recent biases on the SOFR strip and in Tsys had narrowed the scope for fresh capital to be put to work and Williams (permanent voter) and Daly (’24 voter) offered some pushback against rate cut excitement after Waller’s dovish musings on Tuesday.
  • TYH4 at 109-28 sits off the day’s low of 109-23+, for a sizeable retracement off yesterday’s high of 110-15+ to dent the extension of the bullish theme. It’s doesn’t yet trouble support at 109-05+ (Nov 28 low).
  • Near-term FOMC pricing is similar to pre-data levels, with a first cut priced for the May FOMC and close to 50/50 it comes in March instead. After that it builds to a cumulative 112bp of cuts through 2024 vs 121bp shortly ahead of the data as implied rates slipped pre-release.
  • Tomorrow sees initial data focus on ISM manufacturing, of added note after today’s Chicago PMI strength and other manufacturing surveys also pointing to some upside risk, before Fed Chair Powell headlines the docket in a fireside chat at 1100ET including text. The FOMC media blackout begins Friday midnight ET.
Homepagemarkets-real-timeBulletMarketsFixed Income Bullets
Homepagemarkets-real-timeBulletMarketsFixed Income Bullets

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.