CORRECTED-MNI: Fed's Hammack-Near Or At Time To Slow Rate Cuts

MNI BRIEF: Fed's Goolsbee Sees Rates Fair Bit Lower In A Year

CANADA JOBLESS RATE +6.8% VS FORECAST +6.6%, PRIOR +6.5%

MNI China Daily Summary: Friday, December 6

MNI: PBOC Net Drains CNY288.1 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Lower At 7.1848 Fri; -1.64% Y/Y

MNI: UNIV OF MICHIGAN CONSUMER SENTIMENT PRELIMINARY DEC INDEX 74.0

CANADA NOV IVEY PURCHASING MANAGERS INDEX 52.3 SA

EZ/UK Bond Supply Calendar: Austria, UK Auction on Tuesday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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

STIR: 50bp Of BoE Cuts Now Priced Through Year End, Fed Pricing Dominating

STIR
BulletMarketsFixed Income BulletsForeign Exchange Bullets

BoE-dated OIS now prices ~4.5bp of cuts for Thursday, ~50bp across the 3 remaining meetings of ’24 and ~135bp of easing through June ’25. The latter briefly showed ~144bp of cuts earlier today.

  • An unwind of some of the dovish USD STIR positioning spills over after U.S. retail sales data was not soft enough to drive further dovish repricing.
  • SONIA futures are -0.25 to -7.5.
  • UK CPI data will be released early tomorrow (07:00 London).
  • Our macro team notes that services CPI will be higher than last month. The extent of the uptick will likely be determined by accommodation prices. However, the MPC will likely look through any surprises, unless an unanticipated driver comes to the fore.
  • Our full preview of that release is here: https://media.marketnews.com/UK_Inflation_Preview_2024_09_Release_3f43d79788.pdf
  • Given the above, we would suggest that spill over from tomorrow’s FOMC decision will likely have greater impact on GBP STIRs than the domestic CPI release, given the unusually balanced pricing (between a 25 & 50bp cut) heading into the U.S. central bank’s decision.

BoE Meeting

Keep reading...Show less
175 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.

BoE-dated OIS now prices ~4.5bp of cuts for Thursday, ~50bp across the 3 remaining meetings of ’24 and ~135bp of easing through June ’25. The latter briefly showed ~144bp of cuts earlier today.

  • An unwind of some of the dovish USD STIR positioning spills over after U.S. retail sales data was not soft enough to drive further dovish repricing.
  • SONIA futures are -0.25 to -7.5.
  • UK CPI data will be released early tomorrow (07:00 London).
  • Our macro team notes that services CPI will be higher than last month. The extent of the uptick will likely be determined by accommodation prices. However, the MPC will likely look through any surprises, unless an unanticipated driver comes to the fore.
  • Our full preview of that release is here: https://media.marketnews.com/UK_Inflation_Preview_2024_09_Release_3f43d79788.pdf
  • Given the above, we would suggest that spill over from tomorrow’s FOMC decision will likely have greater impact on GBP STIRs than the domestic CPI release, given the unusually balanced pricing (between a 25 & 50bp cut) heading into the U.S. central bank’s decision.

BoE Meeting

Keep reading...Show less