STIR: Effective Fed Funds Rate

• US core CPI missed in March, at +0.32% M/M vs the +0.5% expected.
• The miss looks mainly driven by used cars (-3.8% vs closer to -1% expected) and softer rents (+0.43% after +0.57%, some analysts thought similar again). OERs meanwhile were in line, +0.43% after +0.45% and remarkably steady for seven months now between 0.41-0.45. Core was however helped by an extremely strong rise in airfares (+10.66%).
• Core goods inflation of -0.42% M/M is the weakest since -0.64% in Apr-2020 as a result of that drop in used cars. However, whilst core goods ex used cars & trucks clearly slowed in March, it only went from +0.6% to +0.38% M/M
• Overall core service inflation meanwhile touched a new post-pandemic high of +0.60% M/M.

• Immediate pricing for May 4 FOMC unchanged at 49bps of hikes but June 16 trimmed 2bps to 93.5bps and year-end down more than 10bps to 210bps.

FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 0.33% volume: $80B
• Daily Overnight Bank Funding Rate: 0.32% volume: $266B

Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 0.30%, $886B
• Broad General Collateral Rate (BGCR): 0.30%, $336B
• Tri-Party General Collateral Rate (TGCR): 0.30%, $327B
• (rate, volume levels reflect prior session)

Everything got lifted post the core US CPI miss, besides the Dollar, Govies, short end strips, Equities and Gold (on the USD dip).

• Resistance in Gold comes at $1980.3 - 50.0% retracement of the Mar 8 - 29 downleg
• VGM2 sees 3888.00 High Apr 5
• ESM2 is seen further out towards 4519.75