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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.
STIR
- Fed Funds implied rates have lifted marginally off session lows but still see a sizeable drop after a combination of nuanced data and the ECB decision/press conference.
- There’s been relatively little impact on March pricing (cumulative 12bp of cuts) but the Dec’24 implied rate is still 5bps lower for 138bp of cuts for 2024 (at 3.95%, it remains above the 3.92% bottomed out before yesterday’s US flash PMIs).
- Data recap: US real GDP growth was much stronger than expected in Q4, buoyed by strong goods-based consumption growth but also no sign of the expected drag from inventories which could be kicked to Q1.
- The GDP price index was materially softer than expected, seemingly from a terms of trade hit, but core PCE inflation was exactly in line with consensus at 2.0% annualized.
- It was further combined with initial claims surprising higher after a particularly low prior print, but still moving lower on a four-week moving average and very low generally.
- Taking all into account, we suspect a large driver of the rally in rates is that whilst expected, it (probably) sees another low core PCE print in M/M terms with tomorrow’s release for Dec, with the 6-month rate dropping a little further below 2% annualized.
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.
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