### POV, MARKET NOT PRICING RATE CHANGE AT......>

FED: ### POV, MARKET NOT PRICING RATE CHANGE AT AUG 1 FOMC

- FRA/OIS implying low chances (6%) of hike next wk, according to  MNI's PINCH.

- Before the start of the Fed's media blackout last Saturday, St. Louis Fed

President James Bullard reiterated his stance that "yield curve inversion is a

bearish signal" for the economy, that "imminent" inversion is a "real

possibility" that could be avoided by being more cautious in the pace of

tightening policy.

- Nevertheless, the door for two more rate hikes by year end has been left open,

MNI's PINCH model reflects 95% probability of a third hike at the Sep 25-26 FOMC

and near 69% for a fourth hike at the Dec 18-19 FOMC.

- Eurodollar futures have pared back inversion of EDH0-EDM0 vs. corresponding

Greens (EDU0-EDM1)but remain inverted, implying expectations of rate cuts late

next year into 2020 as economy cools. Meanwhile, Tsy yld curves have unwound

appr half of steepening rebound from last Fri-Mon over the last couple sessions.

Inconsistent option flow has seen better long put unwinds and buyers longer

dated calls