STIR: 40bp of Fed Cuts Seen This Year, PMIs In Focus Today
Feb-21 11:27
- Fed Funds implied rates have modestly extended yesterday’s softening, which came initially with equity weakness but with little sign of paring the move despite a recovery in stocks.
- Cumulative cuts from 4.33% effective: 0.5bp Mar, 6bp May, 15bp Jun, 21.5bp Jul, 29.5bp Sep and 40bp Dec.
- The 40bp of cuts seen for the year is close to the week’s lows.
- Gov. Kugler (permanent voter) late yesterday noted there is “some way to go” on inflation and that upside risks remain whilst downside risks to employment have diminished. Her remarks shouldn’t have surprised as said Feb 7 (post payrolls, pre CPI/PPI) that she saw rates on hold for “some time”.
- Today sees data focus on February flash PMIs before Vice Chair Jefferson (permanent voter) rounds out the week’s scheduled Fedspeak at 1130ET. He’s talking on central bank communication (text + Q&A) after Musalem yesterday favored communicating through forecast scenarios. As for his monetary policy view, he reiterated on Wed that the Fed can take its time before adjusting rates.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
LOOK AHEAD: Wednesday Data Calendar: Mtg Apps, Leading Index, 30Y Bond Re-Open
Jan-22 11:22
- US Data/Speaker Calendar (prior, estimate)
- 22-Jan 0700 MBA Mortgage Applications (33.3%, --)
- 22-Jan 1000 Leading Index (0.3%, -0.1%)
- 22-Jan 1130 US Tsy $64B 17W bill & $65B 33D CMB auctions
- 22-Jan 1300 US Tsy $13B 20Y Bond re-open (912810UF3)
SCANDIS: NOKSEK Unwinds Yesterday's Selloff As Crude Recovers
Jan-22 11:17
NOKSEK is 0.3% higher as crude oil prices reverse a portion of yesterday’s decline.
- The Jan 2 low at 0.9717 has been pierced on consecutive sessions, but the cross has been unable to close below this level for now. Clearance of the Jan 2 low would undermine the corrective rally which began at the start of this year and expose trendline support drawn from the August 2024 low at 0.9668. Initial resistance is not seen until the Jan 15 high at 0.9859.
- The SEK has not seen much of a tailwind from today’s European equity outperformance, with tightening Swedish/German rate differentials putting upward pressure on EURSEK intraday.
- Norges Bank are firmly expected to hold rates at 4.50% tomorrow, while continuing to signal for a rate cut in March. We will provide more colour on that event later today.
DUTCH AUCTION PREVIEW: New 10-year DSL To Be Launched Via DDA On March 4
Jan-22 11:17
DSTA will launch a new 10-year benchmark DSL via Dutch Direct Auction (DDA) on Tuesday March 4, 2025.
- The bond will have a maturity of July 15, 2035.
- The target volume is E4-6bln.
- The coupon will be announced on February 28, 2025, with initial spread guidance announced on March 3, 2025. Reference bond: 2.50% Feb-35 Bund (ISIN: DE000BU2Z049)
