MNI China Daily Summary: Wednesday, January 8

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AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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STIR: Fed Rate Path Holds Yesterday Nudge Higher With Data In Focus

STIR
BulletMarketsFixed Income BulletsForeign Exchange Bullets
  • Fed Funds implied rates hold yesterday’s mild increase with ahead of a docket focused on both the November JOLTS and December ISM Services reports at 1000ET.
  • Cumulative cuts from 4.33% effective: 2bp Jan, 11bp Mar, 16bp May, 25bp June and 39bp Dec.
  • The SOFR-implied terminal yield of 3.985% holds close to recent highs of 4.03% seen late last month and cycle highs of 4.15% back in April.
  • In FOMC shuffling, Semafor reported earlier today that Bowman is a top candidate for the VC Supervision role according to several people familiar with the matter after Barr announced his resignation yesterday. That doesn’t surprise us, as we wrote at the time yesterday.
  • Today’s Fedspeak is limited to Richmond Fed’s Barkin speaking to the Raleigh Chamber at 0800ET. It shouldn’t be a market mover as the text will be a repeat of Friday’s speech on the 2025 outlook and we don’t expect the Q&A to differ from the tone of more ambiguity on scope for further rate cuts after the 100bps last year, which has been viewed as a necessary recalibration in monetary policy. Previously a ’24 voter, he’s next set to vote in ’27.
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  • Fed Funds implied rates hold yesterday’s mild increase with ahead of a docket focused on both the November JOLTS and December ISM Services reports at 1000ET.
  • Cumulative cuts from 4.33% effective: 2bp Jan, 11bp Mar, 16bp May, 25bp June and 39bp Dec.
  • The SOFR-implied terminal yield of 3.985% holds close to recent highs of 4.03% seen late last month and cycle highs of 4.15% back in April.
  • In FOMC shuffling, Semafor reported earlier today that Bowman is a top candidate for the VC Supervision role according to several people familiar with the matter after Barr announced his resignation yesterday. That doesn’t surprise us, as we wrote at the time yesterday.
  • Today’s Fedspeak is limited to Richmond Fed’s Barkin speaking to the Raleigh Chamber at 0800ET. It shouldn’t be a market mover as the text will be a repeat of Friday’s speech on the 2025 outlook and we don’t expect the Q&A to differ from the tone of more ambiguity on scope for further rate cuts after the 100bps last year, which has been viewed as a necessary recalibration in monetary policy. Previously a ’24 voter, he’s next set to vote in ’27.
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