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US TSYS: /STIR: Hawkish CPI Would Present Greatest Risk To Market Positioning

US TSYS

A firmer-than-expected CPI outcome seems to present the greatest risk to prevailing market positioning ahead of today’s data.

  • Market positioning in Tsys seems relatively long, based on both the J.P.Morgan all client survey and inferences drawn from daily futures OI data, albeit off recent extremes.
  • STIR positioning also seems long/received into the data.
  • Last week’s risk-off dovish repricing seemed overstretched and we don’t expect a retest in the case of a dovish data outcome later today.
  • Fed funds futures currently price ~40bp of cuts through the Sep FOMC & ~108bp through the Dec meeting vs. ~70bp & ~148bp at one stage on Monday 5 August.
  • Click for our full CPI preview.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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