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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.
STIR
STIR markets within the $-bloc have softened across the board over the past 10 days, with New Zealand as the standout performer.
- Year-end official rate expectations have softened by 9bps in Australia, 17bps in the US and Canada, and 27bps in New Zealand.
- Overnight, US easing expectations received a boost from softer-than-expected US CPI data.
- Of particular note, supercore (services ex-housing) inflation printed negative again, at -0.05% (-0.04% prior), vs +0.27% expected, for the first back-to-back deflations since Aug-Sep 2021. Overall core services printed just +0.13%, vs +0.32% MNI avg (and 0.22% May), the lowest since August 2021.
- On Wednesday, the RBNZ surprised the market with the final paragraph of the meeting summary: "The appropriate stance of monetary policy was discussed. The Committee agreed that monetary policy will need to remain restrictive. The extent of this restraint will be tempered over time consistent with the expected decline in inflation pressures.
- RBNZ dated OIS pricing is 17-35bps softer for meetings beyond August versus Wednesday's pre-RBNZ Decision levels.
- December 2024 expectations and the cumulative easing across the $-bloc stand at: 4.75%, -58bps (FOMC); 4.16%, -59bps (BoC); 4.39%, -5bps from an expected terminal rate of 4.43% (RBA); and 4.88%, -62bps (RBNZ).
Figure 1: $-Bloc STIR (%)
Source: MNI – Market News / 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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