STIR: Fed Rates Within Post-NFP Range, 61.5bp Cuts To End-2025
Aug-07 10:19
- Fed Funds implied rates are up to 1bp lower overnight for meetings out to Mar 2026 as they keep to post-NFP ranges ahead of data focus on weekly jobless claims.
- The 61.5bp of cuts to year-end sits within the 56-64bp seen this week.
- Cumulative cuts from 4.33% effective: 24bp Sep, 40bp Oct, 61.5bp Dec, 73bp Jan and 85.5bp Mar.
- The SOFR implied terminal yield of 3.045% (SFRH7) is 2bp higher on the day, holding close to recent levels with a little more than five cuts priced from current levels.
- Atlanta Fed’s Bostic (non-voter) speaks on monetary policy today at 1000ET (no text). He was one of the first to speak after Friday’s NFP report, noting the significant revisions but warning that the Fed still needs to determine what the trend of hiring will be. He hasn’t changed his view on rates and still expects one cut this year.
- Yesterday, Gov. Cook (permanent voter) called the July jobs report “concerning,” as “these revisions are somewhat typical of turning points”.
- Cook added that business leaders report spending significant amounts of time managing uncertainty – “This is deadweight loss”. Boston Fed’s Collins (’25 voter) agreed, saying an “uncertainty tax” was “top of mind across a wide range of different industries.”
- Trump yesterday on latest Fed Governor/Chair deliberations: “We’re probably going to go with the temp and then a permanent. I think the temp is going to be named, I’d say, over the next two, three days, and then we’re going to go permanent.”
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OUTLOOK: Price Signal Summary - Bull Cycle In EUROSTOXX50 Futures Still In Play
Jul-08 10:02
- In the equity space, the trend condition in S&P E-Minis is unchanged, the outlook remains bullish. Resistance at 6128.75, the Jun 11 high, has recently been breached. The break confirmed a resumption of the uptrend that started Apr 7. This has been followed by a breach of key resistance and a bull trigger at 6277.50, the Feb 21 high. Sights are on 6356.12, a 1.236 projection of the May 23 - Jun 11 - 23 price swing. Key support is at the 50-day EMA, at 6011.49.
- Recent gains in EUROSTOXX 50 futures from the Jun 23 low, still appears to be a potential reversal and the contract is holding on to its most recent gains. Price has pierced both the 20- and 50-day EMAs. A clear break of both averages would strengthen a reversal theme. This would open 5486.00, May 20 high and bull trigger. On the downside, a break of 5194.00, Jun 23 low, reinstates a bearish theme.
US NFIB JUN SMALL BUSINESS INDEX 98.6
Jul-08 10:00
- US NFIB JUN SMALL BUSINESS INDEX 98.6
