-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
Commodities
Real-time insight of oil & gas markets
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Chart Packs -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
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.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI ASIA OPEN: Fed Chairman Powell Nomination Hearing Tuesday
EXECUTIVE SUMMARY
- MNI INTERVIEW: Cleveland Fed Econ. Sanguine on Wage Inflation
- MNI BRIEF: Inflation Expectations Growth Cools - NY Fed
- WH said to address filibuster issues Tuesday
- Fed Clarida Annc Resignation Earlier Than Exp: Jan 14 vs. 30th
- Fed Chairman Powell nomination hearing with Senate committee on Banking, Housing and Urban Affairs Tuesday at 1000ET
![](https://marketnews.com/media-library/image.png?id=28775679&width=980)
US TSYS: Stocks Stage Late Rebound From Steep First Half Losses
Overall volumes rather muted Monday, traders pre-occupied ahead midweek CPI and Friday's Jan Eurodollar option expiration. Surprise: Stocks higher late.
- Stock indexes managed late session rebound, Nasdaq topping 4681.0 late vs. 4575.0 low -- no obvious headline driver but higher Tsy yld headwinds eased around midday, trading desks reporting several large program buys near lows.
- Medium term focus on finding value in downside puts targeting first rate hike at the March 15/16 FOMC policy annc.
- Note -- various dealers bringing there liftoff expectation forward to March as well: GS, JPM, MS and NatWest for starters as well as more details over Balance Sheet normalization.
- Markets eager for details of timing on Quantitative Tightening as well. NatWest strategists say the June 14/15 FOMC a close call between second rate hike vs. QT, but not both. "This decision should be highly data dependent. We lean to the Fed announcing a second interest rate hike at the June Meeting, but we envision strong risk to an early start of QT."
- Tuesday -- Fed Chairman Powell nomination hearing with Senate committee on Banking, Housing and Urban Affairs Tuesday at 1000ET.
- The 2-Yr yield is up 4bps at 0.9024%, 5-Yr is up 3bps at 1.5285%, 10-Yr is up 0.7bps at 1.7692%, and 30-Yr is down 1.3bps at 2.1028%.
US
FED: Productivity gains and rising profits should help U.S. firms absorb the cost of higher wages, muffling the inflationary impact of a job market boom and increased worker bargaining power, Cleveland Fed economist Robert Rich told MNI.
- “There’s this narrative that there’s this very straightforward linkage between wages and prices, and the moment you see wage increases that’s going to immediately translate into price inflation,” said Rich, director of the Cleveland Fed’s Center for Inflation Research as well as a senior economic and policy advisor to the Bank's president, Loretta Mester.
- “It’s not a narrative we think of as being accurate. You could think of there being lots of slippages, at least in the near term, between wages and prices.”
- Median inflation expectations three years ahead were unchanged at 4.0% after dipping in November by 0.2 ppts, the New York Fed said. Expectations about year-ahead price changes fell by 3.5 ppts for the price of gas to 5.7%, 1.4 ppts for food prices to 7.8%, and 1.0 ppt for the cost of a college education to 8.1%. The median expected change in the price of medical care and rent remained unchanged at 9.6% and 10.0%.
- Median home price expectations increased to 5.5% from 5.0% in November, but remained below their May 2021 peak. The median expected growth in household income increased by 0.2 percentage point to 3.4% in December, a new series high.
OVERNIGHT DATA
- U.S. NOV. WHOLESALE INVENTORIES RISE 1.4 %
- U.S. NOV. WHOLESALE SALES UP 1.3 %
MARKETS SNAPSHOT
Key late session market levels:
- DJIA down 284.81 points (-0.79%) at 35939.55
- S&P E-Mini Future down 27 points (-0.58%) at 4639.5
- Nasdaq down 79.4 points (-0.5%) at 14851.39
- US 10-Yr yield is up 0.7 bps at 1.7692%
- US Mar 10Y are down 2.5/32 at 128-7
- EURUSD down 0.0031 (-0.27%) at 1.133
- USDJPY down 0.34 (-0.29%) at 115.22
- WTI Crude Oil (front-month) down $0.69 (-0.87%) at $78.19
- Gold is up $4.41 (0.25%) at $1800.64
- EuroStoxx 50 down 66.31 points (-1.54%) at 4239.52
- FTSE 100 down 40.03 points (-0.53%) at 7445.25
- German DAX down 179.47 points (-1.13%) at 15768.27
- French CAC 40 down 103.71 points (-1.44%) at 7115.77
US TSY FUTURES CLOSE
- 3M10Y +0.465, 166.775 (L: 166.244 / H: 170.755)
- 2Y10Y -3.113, 86.477 (L: 86.252 / H: 91.857)
- 2Y30Y -5.147, 119.84 (L: 118.983 / H: 126.837)
- 5Y30Y -4.297, 57.263 (L: 56.184 / H: 61.778)
- Current futures levels:
- Mar 2Y down 2.125/32 at 108-23.625 (L: 108-23.25 / H: 108-26.25)
- Mar 5Y down 4.25/32 at 119-19.25 (L: 119-15.5 / H: 119-23.75)
- Mar 10Y down 2.5/32 at 128-7 (L: 127-30 / H: 128-11)
- Mar 30Y up 12/32 at 155-16 (L: 154-19 / H: 155-18)
- Mar Ultra 30Y up 15/32 at 189-5 (L: 187-16 / H: 189-1)
US 10Y FUTURES: Tech (H2) Bearish Despite Intraday Bounce
- RES 4: 131-19 High Dec 20 and key resistance
- RES 3: 130-18+/28+ High Dec 31 / High Dec 22
- RES 2: 129-31 Low Dec 8 and a recent breakout level
- RES 1: 129-00/19 High Jan 6 / High Jan 4
- PRICE: 128-04+ @ 16:59 GMT Jan 10
- SUP 1: 127-30 1.764 proj of the Dec 20 - 29 - 31 price swing
- SUP 2: 127-18+ 2.00 proj of the Dec 20 - 29 - 31 price swing
- SUP 3: 127-07 2.236 proj of the Dec 20 - 29 - 31 price swing
- SUP 4: 127-00 Round number support
Treasuries remain soft, despite a mid-session rebound from the 127-30 intraday low. A clear bearish price sequence of lower lows and lower highs on a daily basis reinforces the current sentiment, signalling scope for further weakness. Moving average conditions are in a bear mode and this also reinforces the current broader downtrend. Initial resistance is seen at 129-00, the Jan 6 high. Short-term gains would likely be corrective in nature.
US EURODOLLAR FUTURES CLOSE
- Mar 22 -0.015 at 99.590
- Jun 22 -0.025 at 99.30
- Sep 22 -0.035 at 99.050
- Dec 22 -0.040 at 98.780
- Red Pack (Mar 23-Dec 23) -0.05 to -0.045
- Green Pack (Mar 24-Dec 24) -0.05 to -0.045
- Blue Pack (Mar 25-Dec 25) -0.04 to -0.025
- Gold Pack (Mar 26-Dec 26) -0.02 to -0.005
SHORT TERM RATES
US DOLLAR LIBOR: Settlement resumes:
- O/N +0.00472 at 0.07743% (+0.00833 total last wk)
- 1 Month -0.00129 to 0.10400% (+0.00190 total last wk)
- 3 Month +0.00215 to 0.23829% (+0.02701 total last wk) ** Record Low 0.11413% on 9/12/21
- 6 Month +0.00657 to 0.38300% (+0.03768 total last wk)
- 1 Year +0.01515 to 0.67686% (+0.07858 total last wk)
- Daily Effective Fed Funds Rate: 0.08% volume: $71B
- Daily Overnight Bank Funding Rate: 0.07% volume: $258B
- Secured Overnight Financing Rate (SOFR): 0.05%, $929B
- Broad General Collateral Rate (BGCR): 0.05%, $345B
- Tri-Party General Collateral Rate (TGCR): 0.05%, $330B
- (rate, volume levels reflect prior session)
- Tsy 7Y-10Y, $2.401B accepted vs. $7.108B submission
- Next scheduled purchases:
- Tue 01/11 1010-1030ET: Tsy 4.5Y-7Y, appr $4.525B
- Tue 01/11 1100-1120ET: Tsy 10Y-22.5Y, appr $1.625B
- Wed 01/12 1100-1120ET: Tsy 22.5Y-30Y, appr $1.825B
- Thu 01/13 1010-1030ET: Tsy 2.25Y-4.5Y, appr $6.325B
- Thu 01/13 1500ET: Updated NY Fed Operational Purchase Schedule
FED Reverse Repo Operation
![](https://marketnews.com/media-library/image.png?id=28775696&width=980)
NY Federal Reserve/MNI
NY Fed reverse repo usage climbs to $1,560.421B (76 counterparties) vs. $1,530.096B on Friday.
All-time high of $1,904.582B on Friday, December 31.
PIPELINE: Toyota Launched Late, Leads w/$2.6B 4Pt
No corporate supply to speak of Friday, issuers remained sidelined after Dec jobs report miss (+199k vs. +447k est). Nevertheless, issuance in first week of 2022 surged to $80.6B compared to $175b total estimate for the month. Back in the game, issuance estimate for week ahead appr $45B.- Date $MM Issuer (Priced *, Launch #)
- 01/10 $2.6B #Toyota Motor Cr $1.15B 3Y +30, $300M 3Y SOFR+32, $750M 5Y +40, $400M 10Y +68
- 01/10 $2B #BP Capital 10Y +95
- 01/10 $1.2B #Southern California Edison $500M 10Y +98, $700M 30Y +135
- 01/10 $1.5B #Dick's Sporting $750M 10Y +140, $750M 30Y +200
- 01/10 $1.15B #Blackstone Private Cr Fund $500M 3Y +150, $650M 7Y +240
- 01/10 $2.05B #Groupe BPCE $850M 3Y +55, $400M 3Y SOFR+57, $800M 15NC10 +190
- 01/10 $Benchmark Korea National Oil 3.25Y +60, 5.25Y +70, 10.25Y +90
- 01/10 $500M #GCC WNG +10Y +185
FOREX: USD and JPY Bolstered By Equities Rout, Notable CHF Weakness
- FX markets were active on Monday despite the lack of significant data/event risk, however, G10 currencies largely played second fiddle to the large selloff seen across US equity indices.
- Despite the relatively contained price changes, both the US dollar and the Japanese Yen were beneficiaries as investors sought a flight to quality throughout the US session where e-mini S&P futures sunk roughly 2.3% from their intra-day highs at their worst point.
- The USD index gained 0.5% at its best levels, erasing the negative greenback sentiment in the aftermath of the US employment data on Friday. In general, the index continues to trade blows either side of the 96.00 level, a similar theme witnessed through much of December.
- USDJPY was understandably heavy and once breaking back below the old highs of 115.52, the Yen squeeze extended. Cross/JPY bore the brunt of the negative tone for risk with both CADJPY and NZDJPY losing over 0.6%.
- The most notable divergence was probably witnessed in the Swiss Franc, with USDCHF remaining very well supported throughout the entirety of the session. After a quiet Q4 last year, total sight deposits are pointing north again, potentially suggesting the SNB are uncomfortable with the pace of the recent CHF acceleration. Additionally, USDCHF breaking back above multiple recent highs around 0.9250 could be considered a bullish development.
- Aussie retail sales overnight before a very light European data calendar. Focus will be on potential comments from Fed’s Powell and other Fed speakers before the major data point of US inflation on Wednesday.
Date | GMT/Local | Impact | Flag | Country | Event |
11/01/2022 | 0001/0001 | * | ![]() | UK | BRC-KPMG Shop Sales Monitor |
11/01/2022 | 0130/1230 | ** | ![]() | AU | Retail Trade |
11/01/2022 | 0130/1230 | ** | ![]() | AU | Trade Balance |
11/01/2022 | 0800/0900 | * | ![]() | ES | industrial orders |
11/01/2022 | 0900/1000 | * | ![]() | IT | retail sales |
11/01/2022 | 1000/1000 | ** | ![]() | UK | Gilt Outright Auction Result |
11/01/2022 | 1020/1120 | ![]() | EU | ECB Lagarde at Bundesbank Ceremony | |
11/01/2022 | 1100/0600 | ** | ![]() | US | NFIB Small Business Optimism Index |
11/01/2022 | 1355/0855 | ** | ![]() | US | Redbook Retail Sales Index |
11/01/2022 | 1430/0930 | ![]() | US | Kansas City Fed's Esther George | |
11/01/2022 | 1500/1000 | ** | ![]() | US | IBD/TIPP Optimism Index |
11/01/2022 | 1500/1000 | ![]() | US | Fed Chair Powell's Senate nomination hearing | |
11/01/2022 | 1630/1130 | ** | ![]() | US | NY Fed Weekly Economic Index |
11/01/2022 | 1800/1300 | *** | ![]() | US | US Note 03 Year Treasury Auction Result |
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
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.