STIR: Little Change In Fed Pricing Following Data, 55bp Cuts Showing Through Dec
Aug-29 12:43
Little net change in Fed pricing in the wake of the PCE data, which met wider unrounded expectations across the board. Meanwhile, the monthly trade deficit for July was wider than expected as imports rebounded sharply and exports were essentially flat in M/M terms.
- FOMC-dated OIS shows ~21.5bp of easing for next month, 35bp through October and 55bp through year-end, contracts 0.5-1.0bp more dovish vs. pre-data levels, with Dec FOMC pricing currently flat vs. last week’s close.
- SOFR-implied terminal rate at 2.97% vs. 2.98% pre-data.
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US: Trump Post on the US GDP and level of Rates
Jul-30 12:40
Donald J. Trump
@realDonaldTrump
2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED! “Too Late” MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!
US TSYS: Post-Core PCE, GDP React
Jul-30 12:34
- Fast two-way flow -- Treasury futures bounce then extend lows after higher than expected GDP and Core PCE figures. Tsy Sep'25 10Y futures currently trades -6.5 at 111-05 (111-03.5 low, 111-14.5 high).
- Key support is 110-08+, the Jul 14 and 16 low. Clearance of this level would reinstate a bearish theme. First support is at 110-19+, the Jul 24 low. Resistance at 111-13+, the Jul 10 high, has been pierced. A clear break of it would highlight a stronger reversal and open 111-28, the Jul 3 high.
- Curves mildly flatter now: 2s10s -0.091 at 44.854, 5s30s -0.507 at 95.021
- New pullback lows for EUR/USD as the greenback builds again on the better-than-expected GDP headline. EUR/USD comfortably through yesterday's lows to open 1.1454 as the next downside target.
MNI: US Q2 NOM PCE +1.4%
Jul-30 12:30
- MNI: US Q2 NOM PCE +1.4%
- US Q2 REAL FINAL SALES TO PRIVATE DOMESTIC PURCH +1.2%
- US Q2 PCE PRICE INDEX +2.1%
- US Q2 CORE PCE PRICE INDEX +2.5%
