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PINCH UPDATE: Mounting concerns over the.........>

US: PINCH UPDATE: Mounting concerns over the global economic outlook, spurred on
last week by Apple's announcement that sales would disappoint on the back of
weaker Chinese demand, has underpinned a significant re-pricing in US rate
expectations. Implied OIS forwards and inflation breakevens have been pushing
lower since October with the market shifting over the last month from pricing in
no further hikes in 2019 to now pricing in a rate cut. We estimate an
OIS-implied probability of 42.4% of a 25bps cut by the December FOMC meeting. We
stress, however, that spot OIS rates have been quite volatile recently as a
result of the market passing through this inflexion point, which can lead to a
kinked trajectory for the implied forward curve.
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