MNI China Daily Summary: Thursday, April 22

MNI BRIEF: China To Quicken Resolving Local Debt Risks

RPT-MNI INTERVIEW: ECB's Wunsch Sees At Least Two Cuts By Dec

MNI: PBOC Conducts CNY2 Bln Via OMO Mon; Liquidity Unchanged

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS MON

MNI: PBOC Sets Yuan Parity Lower At 7.1043 Mon; -4.74% Y/Y

NBH Data Watch

INDON Sov Curve Flatter, Trade Surplus Soars, BI Decision Wednesday

MNI: BAKER HUGHES US RIG COUNT 619; OIL RIGS 511; GAS RIGS 106

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Inflation Easing But Not Over

US TSYS

Early session highs around the opening bell were short lived Wednesday -- support for Tsy futures in lead-up to import/export prices evaporated despite the weaker than forecasted August import price data:

  • Prices for U.S. imports decreased 0.3 percent in August following a 0.4-percent advance in July, while Export prices rose 0.4 percent in August, after increasing 1.1 percent the previous month.
Hard to explain the steady sell-off in rates after the softer price data would seem to underscore cooling inflation pressures evident after Tue's CPI. One explanation is Tue's rally was overdone, that CPI was "off the boil but still hot" as Wells Fargo strategists said:

While August's softer-than-expected CPI reading lent "credence to the Fed's view that the flurry of inflation experienced earlier this year will prove 'transitory' .. inflation pressures remain strong beyond pandemic-affected categories."

Current session trade included some flatteners:

  • -9,767 FVZ1 123-20.25, post-time bid at 0930:00ET vs. +4,001 UXYZ1 148-13 post-time offer
  • overnight/late Tuesday Block: 5s/ultra-bond flattener: -9,409 FVZ 123-21.25, sell through 123-21.5 post-time bid at 2339:11ET vs. +1,362 WNZ 200-00, nuy through 199-26 post time offer

Background color on large 10Y Block sale (-10,327 TYZ1 at 133-12 (-7.5 and below session low of 133-13). Sources say was dv01 neutral spd vs. 4,720 RXZ1 at 171.60, and a likely unwind as well. Trigger for executing the spd is another matter.
The 2-Yr yield is up 0.4bps at 0.2111%, 5-Yr is up 1.3bps at 0.7983%, 10-Yr is up 1.9bps at 1.3022%, and 30-Yr is up 0.7bps at 1.8659%.

BulletMarketsFixed Income BulletsHomepage
BulletMarketsFixed Income BulletsHomepage

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.