UK DATA: MNI UK Inflation Insight
Nov-15 16:12
- Both headline CPI and services CPI surprised the consensus to the downside by a tenth (although core CPI surprised to the upside by a tenth). The main surprises to the consensus were in the volatile restaurants and hotels category and also a larger-than-expected fall in food prices. However, compared to the Bank of England’s forecasts there was a broader downside surprise (a 3 tenths downside surprise to services CPI).
- We look through some of the key drivers of the print and the key surprises to consensus.
- Given that services CPI was 3 tenths weaker than the BOE expected this looks as though it was a must have been a broad-based downside surprise to the Bank. However, versus consensus the volatile overnight accommodation category could potentially be reversed next month – there is still more disinflation in food prices but that alone is not really enough to change the narrative. This should increase the chance of a cut around May next year - but again, probably isn't enough of a downward surprise to see much chance of an earlier cut get any significant pricing. We are also likely to see further inversion throughout the curve.
We also summarise over 10 sell side views and include a CPI chart pack. For the full PDF click here.For the full PDF click here.
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US 10YR FUTURE TECHS: (Z3) Testing Resistance At The 20-Day EMA
Oct-16 15:40
- RES 4: 110-10+ High Sep 8
- RES 3: 109-20 High Sep 19
- RES 2: 109-09+ 50-day EMA
- RES 1: 108-16 High Oct 12
- PRICE: 107-09 @ 16:33 BST Oct 16
- SUP 1: 107-02+ Low Oct 10
- SUP 2: 106-03+/00 Low Sep 4 / Round number support
- SUP 3: 105-07 2.0% 10-dma envelope
- SUP 4: 104-26 2.00 proj of the Jul 18 - Aug 4 - Aug 10 price swing
Treasuries have pierced resistance at the 20-day EMA - at 108-00+. Recent gains are considered corrective, however, a clear break of the 20-day average would signal scope for a stronger recovery and expose the 50-day EMA at 109-09+. The primary trend remains down and a break of 106-03+, the Oct 4 low, would confirm a resumption of the trend and expose the 106-00 handle.
US: Jordan Picks Up Key Endorsements Ahead Of Speaker Vote
Oct-16 15:38
House Judiciary Committee Chair Jim Jordan (R-OH) has picked up the key endorsement of House Armed Services Committee Chair Mike Rogers (R-AL) ahead of a potential speaker vote tomorrow.
- Rogers wrote on X a short time ago: "[Jordan] and I have had two cordial, thoughtful, and productive conversations over the past two days. We agreed on the need for Congress to pass a strong NDAA, appropriations to fund our government's vital functions, and other important legislation like the Farm Bill."
- Rogers: "As a result, I have decided to support Jim Jordan for Speaker of the House on the floor... I have always been a team player and supported what the majority of the Republican Conference agrees to..."
- Rep Ken Calvert (R-CA), a key defence appropriator, followed: "Keeping America safe is my top priority in Congress. …I will be supporting [Jordan] for Speaker on the floor. Let’s get to work."
- If Jordan can reduce opposition to around 15 votes by tomorrow it is likely that pressures from the political will to support Israel and the need to legislation FY24 bills will help Jordan across the line.
US TSYS: US TSY 26W BILL AUCTION: HIGH 5.335%(ALLOT 85.47%)
Oct-16 15:32
- US TSY 26W BILL AUCTION: HIGH 5.335%(ALLOT 85.47%)
- US TSY 26W BILL AUCTION: DEALERS TAKE 32.70% OF COMPETITIVES
- US TSY 26W BILL AUCTION: DIRECTS TAKE 2.83% OF COMPETITIVES
- US TSY 26W BILL AUCTION: INDIRECTS TAKE 64.48% OF COMPETITIVES
- US TSY 26W BILL AUCTION: BID/CVR 2.91
