BOC DISCUSSED BOTH A 25BP AND A 50BP CUT AS OPTIONS

BOC'S MACKLEM SAYS HE'S A FAN OF FISCAL GUARDRAILS

TRUDEAU CALLS BOC RATE CUT 'A STEP IN THE RIGHT DIRECTION'

MNI China Daily Summary: Wednesday, December 11

MNI BRIEF: Chinese Rail Passenger Numbers Break Record

MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

US EIA: CRUDE OIL STOCKS EX SPR -1.42M TO 422.0M DEC 06 WK

BOC CUTS RATE 50BPS TO 3.25%, SEES GRADUAL APPROACH FROM HERE

MNI: US NOV CPI 0.3%, CORE 0.3%; CPI Y/Y 2.7%, CORE Y/Y 3.3%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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Bull Steepening With FOMC Minutes, Housing Data Ahead

US TSYS
  • Cash Tsys have bull steepened, with a rally building through both Asia and London hours, in most benchmark tenors pushing towards yesterday’s highs seen after the initial sell-off on stronger than expected retail sales was strongly reversed. The combination of yesterday’s price action and preliminary OI data point to long covering in Tsy futures dominating from a net positioning perspective (FV, TY and WN futures seemingly saw longs covered on net, with the most notable OI DV01 equivalent swing coming in the WN futures contract).
  • The FOMC minutes and housing data headline today’s session, the former coming after some more open discussion of cut timing from both Williams (voter) and Harker (’23 voter), whilst Kashkari yesterday (’23) saw cuts as a long way away with discussion on 2024 or even 2025.
  • 2YY -4.7bp at 4.906%, 5YY -5.2bp at 4.321%, 10YY -3.1bp at 4.180% and 30YY -0.8bp at 4.308%.
  • TYU3 trades 10 ticks higher at 110-02+ off a high of 110-05+ at the higher end of yesterday’s range, with elevated volumes of 285k. The bounce towards resistance at 110-10 (Aug 14 high) is deemed corrective with moving average studies in a bear mode condition, and with support seen at 109-11+ (Aug 15 low).
  • Data: Weekly MBA data (0700ET), Building permits/housing starts Jul (0830ET), NY Fed Services Aug (0830ET), IP & cap util Jul (0915ET)
  • Fed: FOMC minutes (1400ET)
  • Bill issuance: US Tsy $50B 17W Bill auction
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