STIR: Mild Fed Easing Bias Held Ahead Of March CPI Report
Apr-10 10:29
- US rates have seen a largely steady overnight, consolidating yesterday’s reversal of initial gains on Lebanon negotiation and Israel scaling back Lebanon strikes headlines.
- This morning's reports of Zelenskiy's top aide seeing Ukraine nearing a deal with Putin saw a small rally away from session lows.
- Data has recently played a reduced role although today’s CPI report could be more notable as it captures the historically sharp rise in fuel prices with spillover watched.
- MNI CPI Preview: https://media.marketnews.com/USCPI_Prev_Apr2026_76aa0947d0.pdf
- Cumulative cuts from 3.64% effective: 0bp Apr, 0bp Jun, 0bp Jul, 1.5bp Sep, 2bp Oct and 7bp Dec before building to 15bp in Jun 2027.
- SOFR futures are mostly 0.5-1 tick lower overnight, with the terminal implied yield of 3.41% (Z7) little changed compared to the past two closes. It compares with a range of 3.075% (Mar 2) - 3.55% (Mar 26) for closes since US-Israel strikes on Iran on Feb 28.
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STIR: Oil Helps Modest Hawkish Move Before US CPI Feb Report
Mar-11 10:27
- US rates have been dictated by oil prices overnight, with initially dovish moves on prospects of an IEA oil reserve release being reversed including as potential amounts were floated by newswires.
- MNI CPI Preview: https://mni.marketnews.com/4rolYMI
- Headline CPI inflation is expected to accelerate modestly to 0.25% M/M in February as an energy drop reverses, but it's too soon to capture a surge in energy prices on the Middle East conflict.
- Core CPI inflation meanwhile is expected to moderate to 0.23% M/M after a softer than expected but still solid January print and should offer a cleaner read after recent caveated reports.
- FF cumulative cuts from 3.64% effective: 0bp Mar, 3bp Apr, 10.5bp Jun, 16.5bp Jul, 25bp Sep, 29.5bp Oct and 36.5bp Dec.
- SOFR futures are currently as much as 3.5 ticks lower in Z6-H7 contracts, with the terminal implied yield of 3.23% (U7, +2.5bp) still towards the higher end of ytd ranges of 2.94-3.285% for closes.
- Fed VC Supervision Bowman (voter, dove) speaks on supervision and regulation at 0830ET (no text) although being in the FOMC blackout it can’t touch on mon pol.
OPTIONS: Expiries for Mar11 NY cut 1000ET (Source DTCC)
Mar-11 10:25
- EUR/USD: $1.1650(E1.6bln), $1.1700(E2.1bln)
- USD/JPY: Y150.00($1.8bln), Y155.00($1.0bln)
- GBP/USD: $1.3410-20(Gbp640mln)
- EUR/JPY: Y181.00(E538mln)
- USD/CNY: Cny6.8800($803mln)
OIL: IEA Set To Issue Recommendation On Strategic Reserve Release In London PM
Mar-11 10:25
RTRS sources report that the IEA is set to announce its recommendation on the joint strategic oil reserve release at 13:00 London.
- Several source reports have pointed to the IEA recommending a record release of 300-400mln barrels.
- Note that a recommendation does not necessarily constitute a final decision being issued by the G7 at the same time.
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