BOC: Around 21bp Of Further Cuts Priced By Year-End Entering Presser
Sep-17 14:29
The almost fully-anticipated BOC decision to cut the overnight rate by 25bp to 2.50% has brought a very moderate dovish reaction on the rate path ahead, settling in at about 21bp of cuts cumulatively priced through the two meetings remaining by end-year (vs 19bp prior to the decision, so more or less just incorporating today's cut. There was a modest hawkish repricing immediately before the release but that's now basically reversed.
- The press conference with Gov Macklem and Deputy Gov Rogers begins at 1030ET - link here
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UK: Treasury Considering Replacing Stamp Duty - Guardian
Aug-18 14:11
Latest from the Guardian:
- "The Treasury is considering a new tax on the sale of homes worth more than £500,000 as a step towards a radical overhaul of stamp duty and council tax, the Guardian has been told".
- "As Rachel Reeves prepares the ground for tax rises in this autumn’s budget, senior ministers have tasked officials to study how a new “proportional” property tax could be implemented and model its impact before reporting back to ministers, who have been briefed on the proposals".
- "Officials are initially examining a potential national property tax, which would replace stamp duty on owner-occupied homes, sources said. They are also studying whether, after the national tax, a local property tax could then replace council tax in the medium term in an effort to repair battered local authority finances".
- "No final decisions have been made. A national tax could be implemented during this parliament, while it is understood an overhaul of council tax would take longer, at least requiring Labour to win a second term in office."
US TSYS: Post NAHB Housing React
Aug-18 14:05
- Treasury futures trade steady to mixed - at/near lows after NAHB Housing Market Index decline.
- Currently, Sep'25 10Y contract trades steady at 111-19 vs. 111-18.5 early overnight low, 10Y yield +.0097 at 4.3257. Curves mildly flatter: 2s10s -.052 at 56.281, 5s30s -.154 at 107.879.
- No more data ahead, Fed speak on tap with Fed VC Bowman interview on Bbg TV at 1245ET
BONDS: Gilt Futures Through Support
Aug-18 14:00
An uptick in benchmark global equity index futures through the opening bell on Wall Street provides some fresh pressure for core global FI markets before stalling, while some offset came from a downtick in oil.
- Gilt futures have pierced previously flagged Friday lows, exposing next support at 90.59. Yields ~1.5bp higher across the UK curve. 10s hit the highest level since late May (4.715% last). Next upside target is the 29 May high (4.765%). 50-Year yields pierce Friday’s cycle high, to trade less than 4bp below the psychological 5.00% level.
- TY futures test Asia-Pac lows at typing, but remain above Friday’s worst levels. Yields little changed to 1bp higher across the U.S. curve.
- Bunds are off session lows, curve bull flattens still. A reminder that Friday’s bear steepening set the tone for wider core global FI, but was more reflective of longer run headwinds for Bunds than new news.
