Free Trial

Fed Implied Rates Softer After Weak European Service PMIs

  • Fed Funds implied rates have pushed lower overnight in spillover from softer than expected European service PMIs. It comes ahead of today’s preliminary PMIs for the US along with preliminary benchmark revisions for the establishment survey.
  • Cumulative hikes from 5.33%: +3bp Sep (-1bp on the day), +11bp Nov (-1bp) and with Dec still close with +9.5bp (-1bp).
  • Cuts from Nov terminal: 1.5bp to Dec’23, 43bp to Jun’24 (from 41bp) and 107bp to Dec’24 (from 104bp).
  • No scheduled Fedspeak today before Jackson Hole proceedings kick into gear. In case missed yesterday, the director-level discount rate discussions, separate to Fed Funds target discussions, hinted that the “couple” of FOMC participants noted in the minutes of the July 26 FOMC decision who favored holding rates steady, or could have supported such a proposal, were potentially Williams and Bostic judging by NY and Atlanta Fed directors (not presidents) favoring no change.

Source: Bloomberg

To read the full story



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.