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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.
US
Re-posting our overnight colleague's Tsy setup ahead of CPI.
- A downside surprise would likely provide a more notable market reaction than an upside surprise given the well-documented fear re: inflationary pressure. For deeper insight surrounding the release please see our full preview (https://roar-assets-auto.rbl.ms/documents/13777/USCPIPrevFeb2022.pdf).
- U.S. Tsy market positioning also points to the potential for a greater market reaction if the CPI data disappoints.
- The latest J.P.Morgan Tsy client survey revealed a slight moderation in overall net shorts (from the recent multi-year extremes) in the week ending 7 Feb, even as global core FI markets sold off on the back of hawkish turns from the BoE & ECB, in addition to a firmer than expected NFP report. The short covering theme seemingly carried through Wednesday’s 10-Year Tsy supply, which was very well received. Still, net shorts remain stretched in a historical sense.
- A quick reminder that there has been a swift repricing of Fed hike expectations in recent months after the Fed’s late ’21 pivot and persistent upside inflationary pressure.
Tightening Priced In FOMC Dec ‘22 Dated OIS (%)Source: Bloomberg
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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