FED: Educated Guess On 2025 Dots Has Board Clustered At Median (2/3)
Jul-02 17:11
The MNI Markets Team's educated "guess" as to the June SEP submissions for the 2025 end-year dot is below. Note the median for end-2025 is 3.9% (2 cuts).
- Kashkari and Bostic have publicly revealed their "dots" for 2025 (and the case of the latter two, 2026), while Daly and Collins have implied theirs.
- Most of the Board are in the 2-cut median camp. Governors Cook and Jefferson haven't commented on monetary policy since the June FOMC meeting. At a guess, Gov Kugler is only board member who doesn't eye cuts this year, though that could also be Gov Barr, or Gov Cook who said pre-June FOMC that all possibilities, including hikes, were possible.
- Two of the more hawkish members, St Louis's Musalem (2025 voter) and Dallas's Logan (2026 voter) also haven't spoken on current monetary policy since the June meeting, though are scheduled to make relevant commentary on July 10 and July 15, respectively. We assume they are "no-cutters" for this year.
- We also haven't heard from new Philadelphia Fed President Anna Paulson (2026 voter) yet, though her predecessor Patrick Harker could easily have been any of 1, 2, or 3 cuts for 2025. We have him here as a rate-cut skeptic (in his last public appearance he suggested that the direction of the next move rates itself was a question).
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EURUSD TECHS: Bull Cycle Remains In Play
Jun-02 17:00
- RES 4: 1.1625 1.500 proj of the Feb 28 - Mar 18 - Mar 27 price swing
- RES 3: 1.1608 High Nov 9 2021
- RES 2: 1.1573 High Apr 21 and the bull trigger
- RES 1: 1.1453 76.4% retracement of the Apr 21 - May 12 bear leg
- PRICE: 1.1432 @ 16:32 BST Jun 2
- SUP 1: 1.1293 20-day EMA
- SUP 2: 1.1172/1.1065 50-day EMA and a pivot level / Low May 12
- SUP 3: 1.1026 38.2% retracement of the Feb 3 - Apr 21 bull cycle
- SUP 4: 1.0943 Low Apr 10
A bullish theme in EURUSD remains intact and Monday’s gains reinforce current conditions. Support to watch lies at 1.1172, the 50-day EMA. A clear break of this average would undermine the bull theme and signal scope for a deeper retracement. This would open 1.1065, the May 12 low. On the upside, the breach of 1.1419, the May 26 high, confirms a resumption of the trend and opens 1.1573, the Apr 21 high and bull trigger.
STIR: Full Reversal Of Rally On ISM Mfg, Powell Half-Watched Ahead
Jun-02 16:55
- Fed Funds implied rates for late 2025 have almost fully reversed the modest dovish tilt after the miss for ISM mfg (but with prices paid seeing another month close to 70) and soft construction spending.
- Cumulative cuts from 4.33% effective: 1bp Jun, 6.5bp Jul, 21.5bp Sep, 35.5bp Oct and 51.5bp.
- SFRZ6 meanwhile is back at pre-ISM lows of 96.725, for an implied terminal yield of 3.275% after a 4.5bp intraday recovery. It’s back in the range of 100bp +/-5bp of cuts from the effective rate seen mostly over the past three weeks).
- Ahead, Fed Chair Powell is set to give opening remarks at conference marking the Board of Governors International Finance 75th anniversary (text only). The conference is to recognize the division’s history and we don’t expect Powell to touch on mon pol, or at least certainly not offer anything new, but will monitor just in case.
MNI EXCLUSIVE: ISM Manufacturing Survey Chief Speaks to MNI
Jun-02 16:54
- ISM manufacturing survey chief discusses the sector outlook -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
