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MNI EUROPEAN MARKETS ANALYSIS: US Yields Drift Lower, But Dollar Firms Ahead Of FOMC

  • JGB's slumped in early trade, as the BoJ Summary Of Opinions (from the Jan meeting) struck a hawkish tone, with lots of discussion around exiting negative rates. Futures are up from earlier lows (last -.19), likewise for USD/JPY, amid broader USD gains.
  • The AUD has underperformed post the Q4 CPI miss, while a slight downside miss on the China manufacturing PMI didn't help either. RBA-dated OIS pricing is 5-13bps softer for meetings beyond March, with a cumulative 56bps of easing priced by year-end.
  • US yields grinded lower, but this didn't hurt USD sentiment. US equity futures are notably weaker, owing to some late tech related earnings disappointment in the US from Tuesday's session.
  • The focus of today will be the Fed decision out later; no change in rates is expected (see MNI Fed Preview here). There are also January US ADP employment & MNI Chicago PMI, and Q4 employment cost index. German & French preliminary CPIs also print.

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  • JGB's slumped in early trade, as the BoJ Summary Of Opinions (from the Jan meeting) struck a hawkish tone, with lots of discussion around exiting negative rates. Futures are up from earlier lows (last -.19), likewise for USD/JPY, amid broader USD gains.
  • The AUD has underperformed post the Q4 CPI miss, while a slight downside miss on the China manufacturing PMI didn't help either. RBA-dated OIS pricing is 5-13bps softer for meetings beyond March, with a cumulative 56bps of easing priced by year-end.
  • US yields grinded lower, but this didn't hurt USD sentiment. US equity futures are notably weaker, owing to some late tech related earnings disappointment in the US from Tuesday's session.
  • The focus of today will be the Fed decision out later; no change in rates is expected (see MNI Fed Preview here). There are also January US ADP employment & MNI Chicago PMI, and Q4 employment cost index. German & French preliminary CPIs also print.

MARKETS

Keep reading...Show less