Free Trial

### DERIVATIVES POSITIONING HEADING INTO....>

US TSYS
US TSYS: ### DERIVATIVES POSITIONING HEADING INTO NEXT GOMC POLICY ANNC. No
fireworks expected from Wed's FOMC policy announcement (no press conf or eco
projections) though some of statement likely to touch on Tsy curves near 10+ yr
lows (potential recession flag) and/or 10YY rising tap of 3.0% last wk, and/or
Fed balance sheet (note, Tsys quarterly refunding will be annc 0830ET Wed.
- However, the latest MNI PINCH OIS-based model shows May rate hike probability
has crept up to 10.0% today. Given today's exceptionally light trade volume
w/much of Asia and Europe out for spring holiday's coupled with sidelined accts
ahead of Friday's April employment data, should flag opportunities to sell
insurance buy orders looking to hedge against a hike tomorrow.
- Focus remains on June as the next FOMC rate hike (100% priced in according to
MNI PINCH). That said, positioning for a hike in June is a "crowded trade" with
accts that have been long puts for months taking profits or paring back
positions. Mild positioning for third hike at either Sep or Dec FOMCs has slowed
from heavy heavy early year pace. Upside call buying increasingly heavy as accts
view flatter curve, potential Fed slow-down, revising to less hikes in 2019. 

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.