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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.
FED
A key factor to consider for Fed signalling on the December rate move - apart from responses to the incoming data - is any Fed discomfort with the easing of financial conditions in the wake of the release.
- The Goldman Sachs Financial Conditions Index had one of its biggest daily drops yesterday in series history - eclipsed only by Mar 24, 2020; Oct 21 1987, and twice in 2008.
- It's still reflecting a large and fast tightening of conditions overall this year, but there was no sense that the Fed was uncomfortable with how conditions had gotten in the first place.
- While 10Y real rates (TIPS implied) remain elevated vs Jackson Hole levels, they dropped 25bp Thursday, one of the biggest falls ever.
- Oil prices have since jumped 4+%, tech stocks +7%, with the dollar having its worst day since 2015: all inflationary moves, and all set to rebound inflation expectations.
- Yesterday saw a fairly half-hearted pushback by some FOMC officials against over-exuberance. But if we see further easing continue, a pushback by FOMC officials is quite plausible between now and the December meeting.
Source: BBG, MNI
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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