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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.
Executive Summary
- A lighter week for data has broadly pushed back against imminent recession concerns that had mounted as global equity markets tumbled in Monday’s spillover from an already dovish reaction to the softer than expected payrolls report on Aug 2.
- A stabilization in the ISM Services report played a large role, slightly surpassing prior expectations and with a sweep of more notably stronger than expected readings across key components including the employment index rising to its highest since Sep 2023.
- The next most notable release was a surprise decline in initial jobless claims, sparking a very strong hawkish reaction as markets firmly traded it as no bad news is good news.
- Nevertheless, GS analysis of subsequently released BLS microdata suggests there should be less confidence that the sharp rise in the unemployment rate will fully revert in the near-term.
- One final release of note was the NY Fed’s Q2 household credit report which showed only a marginal increase in transition rates to delinquency.
- Monday saw well over 50bps of cuts priced for the Sept FOMC and non-trivial odds of an inter-meeting cut. Emergency cut speculation has since fully dissipated and the stabilization in global markets has seen a sizeable retracing of Friday’s payrolls-induced rally but 50bp cuts are still seen on the table.
- Cumulative cuts from 5.33% effective: 41bp Sep, 73bp Nov, 105bp Dec and 127bp Jan.
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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.
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