MNI China Daily Summary: Wednesday, December 11

MNI BRIEF: Chinese Rail Passenger Numbers Break Record

MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1843 Weds; -1.22% Y/Y

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

EZ/UK Bond Supply Calendar: 4.25% Jul-34 Gilt Due Wednesday

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

MNI: JAPAN NOV CORP GOODS PRICE INDEX +3.7% Y/Y; OCT REV +3.6%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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Late Roundup: Short End Extends Session Highs

US TSYS
  • Yield curves are bull steepening (2s10s -46.511 high) with front end Treasury futures extending session highs late trade while bonds hold to session range over last few hours. Front month 2Y futures tapped 103-24.38 (+17.5) before receding to 103-22.5 last few minutes, 2Y yield falls to 3.8520% low.
  • Timing of move coincided with headlines that four European banks (including SocGen and Deutsche Bank) have put curbs on trades with Credit Suisse. Not as proactive or positive as receiving a liquidity backstop from SNB, but markets may perceive ringfence move to prevent contagion as systemically positive.
  • In the meantime, Short end futures implied rate hikes have drifted back near midweek highs: Fed funds implied hike for Mar'23 at 16.0bp (-3.0bp from this morning), May'23 cumulative 22.1bp (-13bp) to 4.798%, Jun'23 2.7bp (-21.7bp) to 4.608%.
  • Implied cut for Jul'23 at -26.3bp to 4.318%, Sep'23 cumulative of -44.5 to 4.323%; peak Fed terminal rate has fallen to 4.795% for May'23 vs. 4.920% earlier.
  • Next week outlook, no economic data Monday, while the Tsy will auction bills late morning. FOMC kicks off first of two day FOMC meeting on Tuesday.
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