CANADA FLASH MAY GDP +0.1% ON FACTORIES AND REAL ESTATE

MNI China Daily Summary: Friday, June 28

MNI BRIEF: PBOC Pledges to Curb Any Overshoot Of The Yuan: MPC

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MNI: PBOC Net Injects CNY40 Bln Via OMO Fri; Rates Unchanged

CHINA PBOC CONDUCTS CNY50 BILLION VIA 7-DAY REVERSE REPOS FRI

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Hawkish FOMC In-Line, Liftoff After Mar'22 Taper End

US TSYS
Final FOMC of 2021, Fed increased pace of taper (bond purchases end by March '22) and charting liftoff in 2022 with dot-plot shift implying three .25 bps hikes in 2022 and 2023. Fed now sees inflation ending next year at 2.6%, a jump from its 2.2% September forecasts.
  • Widely anticipated (not as hawkish as some analysts expected) Tsys finished near late session lows following some initial whip-saw action on the release, yield curves steeper (5s30s at 60.67 late), equities reversed losses/session highs late: (ESH2 +65.0 at 4693.0) while VIX fell to 19.16 low from pre-annc high of 23.47.
  • Chairman Powell sounded upbeat as he discussed solid job gains that have averaged "378,000 per month over the last 3 months. The unemployment rate has declined substantially falling .6 percentage point since our last meeting and reaching 4.2% in November."
  • Sometime after Mar'22 (end of asset buys), Chair Powell said the Fed will "be in a position to raise interest rates as and when we think it's appropriate and we will, to the extent that's appropriate" and benefitting by "a few more months of data."
  • Early action: Tsys gapped lower just ahead stocks open, weighed by large -30k FVH2 note sale at 120-28.25 that pushed 5s to 120-24 low in the aftermath. Not headline driven, sources reported prop, fast$ and option-tied buying in shorts to intermediates as futures bounce.
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