FREELAND: CANADA WON'T ESCALATE OR BACK DOWN ON US TRADE FIGHT

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI BRIEF: China Nov M1 Decline Narrows, M2 Slows

EZ/UK T-Bill Calendar: 8/13/28/50-Week BTF Auction on Monday

EZ/UK Bond Supply Calendar: 4.125% Jul-29 Gilt Due on Tuesday

MNI: CANADA OCT WHOLESALE SALES +3.3%; EX-AUTOS +0.5%

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

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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Take The Fed, Seriously, Please

US TSYS

Tsys weaker after the bell, off early session lows as early volatility subsided in the second half.

  • Hawkish comments by StL Fed Bullard that rates are not restrictive and belong above 5%, perhaps well above -- kicked off the session while Tsys bounced off early session lows following weaker than exp Philly Fed Mfg index of -19.4 vs. -6.0 exp. Housing Starts and Permits little stronger than expected (1.425m vs. 1.411m est; 1.526M vs. 1.515M est).
  • Key move - continued sell-off in 2s10s curve to new all-time inverted low of -71.249, a measure of market expectations of a coming recession as the Fed moves to stem the rise in inflation. The 2s10s curve off lows after the bell at -68.608 (-1.680).
  • Eurodollar/SOFR 2023 futures levels under considerable pressure as Fed terminal rate has climbed to 4.90% from 4.93% in Jun'23 earlier (5.08% pre-CPI). Fed funds implied hike for Dec'22 back to 50.9bp, Feb'23 cumulative +1.5bp to 86.4bps (84.9bp earlier) to 4.713%.
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