FED: Chicago's Goolsbee Continues To See Rates Heading A "Fair Bit Lower"
Dec-06 16:43
Chicago Fed Pres Goolsbee (2025 FOMC voter) won't pre-commit on his view of the December rate decision ("everything's always on the table") in a Q&A that's still ongoing, as he says he first wants to see upcoming data and hear the rest of the Committee's deliberations.
- That being said, he's probably the biggest dove on the FOMC and it's a pretty good bet he will be siding with a rate cut, mentioning that current rates are far above the (September SEP) 2025 end-year rate median projection of 3.4%.
- He says that over the next year, if conditions evolve how he expects, rates are going to be a "fair bit lower" than they are today. That repeats language he's used previously.
- In turn, Fed cut pricing is little changed, with futures eyeing an 88% implied probability of a December 25bp cut, vs under 70% prior to the November Employment Report.
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US TSY OPTIONS: Dec'24/Jan'25 10Y Put Calendar Spread
Nov-06 16:34
- +11,000 TYZ4/TYF5 107.5 put calendar spread, 20.0
CHINA: Markets May Have to Price More China Stimulus on Top of Trump Package
Nov-06 16:32
While much of the near-term focus is on the post-election market volatility and implications for the Fed (and other global CBs), attention may shift to the imminent conclusion of the NPC Standing Committee meeting in China, at which markets await any potential further details on stimulus, coming likely on Friday.
- Reports in recent weeks suggested that while a fresh fiscal package of CNY 10trl is expected - financed via special treasury and local government bonds - the package could be larger in the event of a Trump victory - meaning markets may have to move further to price China economic activism on top of the Trump policy agenda.
- In terms of timings for a potential announcement - it's unlikely to be before November 8th (the final day of the NPC meeting), and that also allows the NPC to gauge the election results in the US to make any tweaks to the statement.
- Local analysts in the NPC Observer note that a likely time for an announcement could be on CCTV's Xinwen Lianbo program at 7pm local time (1100GMT / 0600ET), with full details of a potential package to follow later that evening.
US TSYS: US TSY 17W BILL AUCTION: HIGH 4.410%(ALLOT 24.08%)
Nov-06 16:32
- US TSY 17W BILL AUCTION: HIGH 4.410%(ALLOT 24.08%)
- US TSY 17W BILL AUCTION: DEALERS TAKE 32.55% OF COMPETITIVES
- US TSY 17W BILL AUCTION: DIRECTS TAKE 5.69% OF COMPETITIVES
- US TSY 17W BILL AUCTION: INDIRECTS TAKE 61.76% OF COMPETITIVES
- US TSY 17W BILL AUCTION: BID/CVR 2.79
