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STIR: Further Steepening In Fed Rate Path Ahead Of Payrolls

STIR
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  • Fed Funds implied rates are holding towards the higher end of the day’s range having been spurred by decent jobless claims data, a strong ISM services report (partly marred by a weak employment sub-component) and a geopolitics-driven sharp increase in WTI futures.
  • Cumulative cuts from 4.83% effective: 34.5bp Nov, 68bp Dec, 97bp Jan and 156bp June.
  • The combination of recent data strength including ADP and JOLTS yesterday (although the latter also at least partly offset by another sizeable decline in quit rates) has further driven a steepening in the curve with only Nov and Dec implied meeting rates lower than ahead of the FOMC decision on Sep 18.
  • * Tomorrow of course sees payrolls, with the Bloomberg whisper number drifting higher to 148k after today's data vs 142k pre-data and 130k earlier this week. Our preview here: https://media.marketnews.com/USNFP_Oct2024_Preview1_bb6bbc0e4e.pdf
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  • Fed Funds implied rates are holding towards the higher end of the day’s range having been spurred by decent jobless claims data, a strong ISM services report (partly marred by a weak employment sub-component) and a geopolitics-driven sharp increase in WTI futures.
  • Cumulative cuts from 4.83% effective: 34.5bp Nov, 68bp Dec, 97bp Jan and 156bp June.
  • The combination of recent data strength including ADP and JOLTS yesterday (although the latter also at least partly offset by another sizeable decline in quit rates) has further driven a steepening in the curve with only Nov and Dec implied meeting rates lower than ahead of the FOMC decision on Sep 18.
  • * Tomorrow of course sees payrolls, with the Bloomberg whisper number drifting higher to 148k after today's data vs 142k pre-data and 130k earlier this week. Our preview here: https://media.marketnews.com/USNFP_Oct2024_Preview1_bb6bbc0e4e.pdf