STIR: Fed Rates Unchanged, Initial Claims For Payrolls Ref Period Ahead
Jan-23 11:20
- Fed Funds implied rates are broadly unchanged overnight, in headline watching mode but with scope for movement on today’s jobless claims data with initial claims covering the payrolls reference period.
- It holds the week’s lean towards a next Fed cut coming in the July rather than June meeting although remains off the Sept seen prior to CPI and Dec seen after payrolls earlier in the month.
- Cumulative cuts from 4.33% effective: 0.5bp Jan, 6.5bp Mar, 12.5bp May, 22bp Jun, 26bp Jul and 39bp Dec.
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US: Johnson Remains Favourite To Retain Speakership On Janaury 3
Dec-24 11:04
House Speaker Mike Johnson (R-LA) appears likely to win re-election to speaker on January 3, despite criticism from President-elect Donald Trump for his handling of a short-term government funding package. According to Polymarket, Johnson is assigned a 73% implied probability of retaining his gavel, down from roughly 95% ahead of the funding crisis.
- On January 3, Johnson will require near-unanimous support from House Republicans. Consistent with previous speaker votes when the minority party votes for their own candidate, Democrats are expected to whip against Johnson’s re-election. House Minority Leader Hakeem Jeffries (D-NY) told MSNBC on Sunday that there is a "real risk" of Johnson failing to become speaker, adding “there will be no Democrats available to save him or the extreme MAGA Republicans from themselves…”
- One Republican Rep, Thomas Massie (K-KY), who backed an effort to oust Johnson earlier this year, is again likely to oppose Johnson’s bid, with a handful of other hardline conservatives reportedly undecided.
- The baseline expectation is that Johnson is likely to be insulated from a major challenge to his speakership as there is no replacement candidate with a clear path to the gavel. Trump’s decision to endorse or oppose could smooth the path for Johnson’s re-election. Trump is likely to balance his dissatisfaction with Johnson’s failure to legislate a debt ceiling suspension with the necessity of stability in the House.
Figure 1: Next Speaker of the House of Representatives
Source: Polymarket
US: SOFR FIX - 24/12/24
Dec-24 11:03
SOFR FIX - Source BBG/CME
- 1M 4.33778
- 3M 4.32666
- 6M 4.28467
- 12M 4.24104
USD: Extending Broader highs
Dec-24 10:37
- The Dollar is still on the front foot, at a new intraday high against the CAD, SEK, NOK, CNH, KRW, CNY, and CZK.
- Despite the small recovery in Oil, the NOK is still the worst performer in G10s against the Dollar, down 0.34%, and USDNOK now edges above Yesterday's high.
- Main resistance is still at the big Psychological level of 11.5000, managed a 11.4769 high last Week, its highest since March 2020.
