MNI: FED'S POWELL-DATA SHOWS SIGNS DISINFLATION IS RESUMING

MNI China Daily Summary: Tuesday, July 2

MNI BRIEF: China Aims For AI Standards By 2026

MNI: PBOC Net Drains CNY298 Bln Via OMO Tues; Rates Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS TUES

MNI: PBOC Sets Yuan Parity Higher At 7.1291 Tues; -0.09% Y/Y

MNI: US REDBOOK: JUN STORE SALES +5.6% V YR AGO MO

Moderation In Core Momentum In June, But Services Remain Elevated

Wider Italian Debt Dynamics Remain Concerning (2/2)

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

OIS Moves Towards Pricing 50bp Of Cuts Through Year-End Post-CPI

STIR
FOMC Calendar Market NewsHomepageBulletMarketsFixed Income BulletsForeign Exchange Bullets

The softer-than-expected run of CPI data (punctuated by a downtick in the M/M supercore measure) results in a dovish repricing in FOMC-dated OIS.

  • That leaves ~47bp of cuts priced through year end vs. ~37.5bp ahead of the release, with the market not willing to fully price 50bp of ’24 cuts on the move, stalling at ~48bp.
  • Further forwards, the first 25bp cut is now once again fully discounted through the November FOMC, with ~30bp of easing showing through that juncture vs. ~23bp pre-release.
  • The strip also prices ~80% odds of a cut through the Sep FOMC vs. ~60% heading into the CPI data.
  • Digestion of the data is set to dominate ahead of the FOMC decision, with hawkish adjustments to the dot plot expected alongside unchanged policy settings later today.
  • A reminder that Fedspeak has turned more hawkish in the intra-meeting period, so it will be interesting to see how today’s data factored into their deliberations.
  • Our full preview of the decision can be found here.
166 words

To read the full story

Close

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.

The softer-than-expected run of CPI data (punctuated by a downtick in the M/M supercore measure) results in a dovish repricing in FOMC-dated OIS.

  • That leaves ~47bp of cuts priced through year end vs. ~37.5bp ahead of the release, with the market not willing to fully price 50bp of ’24 cuts on the move, stalling at ~48bp.
  • Further forwards, the first 25bp cut is now once again fully discounted through the November FOMC, with ~30bp of easing showing through that juncture vs. ~23bp pre-release.
  • The strip also prices ~80% odds of a cut through the Sep FOMC vs. ~60% heading into the CPI data.
  • Digestion of the data is set to dominate ahead of the FOMC decision, with hawkish adjustments to the dot plot expected alongside unchanged policy settings later today.
  • A reminder that Fedspeak has turned more hawkish in the intra-meeting period, so it will be interesting to see how today’s data factored into their deliberations.
  • Our full preview of the decision can be found here.