UK: BBG: Officials Are Working on a U-Turn for Truss’s Tax-Cut Plan
Oct-13 11:49
In line with earlier sources comments from Sky News, Bloomberg's Kitty Donaldson reports that 'UK officials are working on a U-turn for Truss' tax-cut plan'.
- BBG: "UK officials at No. 10 and the Treasury are discussing how they can back down from Prime Minister Liz Truss’s plans for a massive unfunded package of tax cuts, according to a person familiar with their conversations. The officials are drafting options for Truss but no final decision has been taken and they are waiting for Chancellor of the Exchequer Kwasi Kwarteng to return to London [...]"
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: Citi seeing US/European spread tighteners
Sep-13 11:44
- Citi has noted that its "futures desk has seen interest in US/European spread tighteners".
- They note that there is strong resistance for US 10-year Treasuries at 3.30% vs a more bearish technical set up in Bunds and a that with a hawkish ECB further behind the curve than the Fed, this should support further tightening into 150bps.
CANADA: USDCAD Holding At/Slightly Below 50-Day EMA Support
Sep-13 11:42
- S&P E-mini and WTI strengths sees USDCAD at 1.2962, low of 1.2954 vs 50-d EMA of 1.2964.
- Almost zero CAD support from the Can-US 2YY differential, which has quickly unwound a small post-open widening to leave it at just 3.5bps.
- The session’s continuation of a corrective pullback for the pair has opened key near-term support at 1.2895 (Aug 25 low) whilst resistance sits at 1.3015 (Sep 9 high).
Source: Bloomberg
LOOK AHEAD: What to Watch: Aug CPI, Unlikely to Change Fed's Mind Next Wk
Sep-13 11:41
Tsys firmer, top end overnight range and back near middle of Monday's range (30YY currently 3.4707% (-.0414). Moderate overnight volumes (TYZ2<240k) as market awaits latest inflation metric covering August, CPI release at 0830ET:
- CPI MoM (0.0%, -0.1%); YoY 8.5%, 8.1%)
- CPI Ex Food and Energy MoM (0.3%, 0.3%); YoY (5.9%, 6.1%)
- CPI Index NSA (296.276, 295.588), Core (295.275, 296.250)
- Real Avg Hourly Earning YoY (-3.0%, --), followed by
- Monthly Budget Statement (-$211.1B, -$217.0B) at 1400ET
- Outlook/Opinion: Citi see core CPI inflation at 0.357% M/M and headline -0.1% M/M in August. At this point, even a weaker reading (e.g., a large decline in used-car prices delivering closer to zero monthly core inflation) could still be consistent with a 75bp hike on Sep 21 after Brainard suggested it would take "several" (more than two) months of softer inflation data to convince her that inflation has slowed.
- US Treasury $18B 30Y Bond auction re-open (912810TJ7) at 1300ET will be watched closely after Mon's 3- and 10Y sales tailed.
- Geopol: Armenia/Azerbaijan Skirmishes, Escalation Risk w/Russia Distracted: Fighting has broken out on the border between Armenia and Azerbaijan in the Caucuses, with Armenian PM Nikol Pashinyan confirming the death of 49 of his troops. Following skirmishes between Armenia and Azerbaijan, Kremlin states that 'Putin is doing all he can to enable de-escalation' between the two countries.
