MNI China Daily Summary: Thursday, January 16

MNI: ITALY DEC FINAL HICP 0.1% M/M, 1.4% Y/Y

MNI: GERMANY FINAL DEC HICP 2.8% Y/Y, 0.7% M/M

MNI BRIEF: China Shipbuilding Up 13.8% In 2024

MNI: PBOC Net Injects CNY336.4 Bln via OMO Thursday

MNI: PBOC Sets Yuan Parity Lower At 7.1881 Thurs; -2.18% Y/Y

MNI: UK NOV GDP 0.1% M/M, 0.0% 3M/3M, 1.0% 3M Y/Y

MNI: GERMAN DEC CPI +2.2 % Y/Y

MNI: UK NOV TRADE BALANCE GBP -4.76BN

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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US TSYS: Tsys Hold Onto Overnight Gains, Jobless Claims & Retail Sales Later

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Tsys futures are trading slightly lower after last nights rally, ranges have been narrow and we hold near the overnight highs, while volumes are slightly below recent averages. TU is -01 at 102-23⅛, while TY is -02+ at 108-08.
  • Earlier this morning there was a large block seller of TY at 108-09+ for a DV01 of $545k, while overnight In treasury options, continued demand for upside hedges for 10yr notes was seen via a large buyer of March 109.00 calls, which followed heavy buying of the 108.50 calls on Monday; the trades anticipate 10yr yield falling to 4.55% and 4.6% respectively
  • Cash tsys curves have flattened slightly today, with yields +/-1bps. The 2yr is +1bps at 4.274% vs 4.255% low made overnight, while the 10yr is +0.2bps at 4.655%. The 2s10s is 0.5bps lower at 37.875 after reaching a high of 42.568 on Tuesday, its steepest levels since June 2022
  • Projected rate cuts through mid-2025 moved forward on the calendar with July now fully pricing in a 25bp cut. Current vs. this morning levels* as follows: Jan'25 steady at -0.7bp, Mar'25 at -7.4bp (-4.9bp), May'25 -12.8bp (-10.3bp), Jun'25 -22.2bp (-17.7bp), Jul'25 at -25.7bp (-21.7bp).
  • Across the APAC region, BOK kept rates on hold which was against consensus, the market was expecting a 25bps cut, while BoJ officials see a good chance at a rate hike next week, the market currently pricing in about an 85% chance of a 25bps hike.
  • A busy data session later with Weekly Jobless Claims, Retail Sales, Import/Export Indexes and regional Fed services and business outlooks all at 0830ET. Business Inventories and NAHB Housing Market Index at 1000ET. No scheduled Fed speakers as yet - Fed enters Blackout period Friday at midnight.
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  • Tsys futures are trading slightly lower after last nights rally, ranges have been narrow and we hold near the overnight highs, while volumes are slightly below recent averages. TU is -01 at 102-23⅛, while TY is -02+ at 108-08.
  • Earlier this morning there was a large block seller of TY at 108-09+ for a DV01 of $545k, while overnight In treasury options, continued demand for upside hedges for 10yr notes was seen via a large buyer of March 109.00 calls, which followed heavy buying of the 108.50 calls on Monday; the trades anticipate 10yr yield falling to 4.55% and 4.6% respectively
  • Cash tsys curves have flattened slightly today, with yields +/-1bps. The 2yr is +1bps at 4.274% vs 4.255% low made overnight, while the 10yr is +0.2bps at 4.655%. The 2s10s is 0.5bps lower at 37.875 after reaching a high of 42.568 on Tuesday, its steepest levels since June 2022
  • Projected rate cuts through mid-2025 moved forward on the calendar with July now fully pricing in a 25bp cut. Current vs. this morning levels* as follows: Jan'25 steady at -0.7bp, Mar'25 at -7.4bp (-4.9bp), May'25 -12.8bp (-10.3bp), Jun'25 -22.2bp (-17.7bp), Jul'25 at -25.7bp (-21.7bp).
  • Across the APAC region, BOK kept rates on hold which was against consensus, the market was expecting a 25bps cut, while BoJ officials see a good chance at a rate hike next week, the market currently pricing in about an 85% chance of a 25bps hike.
  • A busy data session later with Weekly Jobless Claims, Retail Sales, Import/Export Indexes and regional Fed services and business outlooks all at 0830ET. Business Inventories and NAHB Housing Market Index at 1000ET. No scheduled Fed speakers as yet - Fed enters Blackout period Friday at midnight.