FED: MNI Fed Review - May 2024: High (But Not Higher) For Longer
May-02 12:04
Our review of the May 2024 FOMC meeting has been published and emailed to subscribers- PDF here.
- The May FOMC outcome leaned dovish, with markets relieved by three aspects in particular: the maintenance of the Committee’s bias toward the next move being a rate cut; Chair Powell describing a rate hike as “unlikely”; and a more aggressive reduction to balance sheet runoff than had been expected.
- While the FOMC’s confidence in the progress of disinflation has faltered following recent CPI/PCE data disappointments, they continue to see policy as being restrictive and in a “good place”.
- Though the bar to cuts has been set a little higher, the bar to hikes appears to remain about as high as ever.
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MNI: GERMANY MAR CPI +2.2% Y/Y
Apr-02 12:04
- MNI: GERMANY MAR CPI +2.2% Y/Y
STIR: Repo Reference Rates
Apr-02 12:03
- Secured Overnight Financing Rate (SOFR): 5.35% (+0.01), volume: $2.023T
- Broad General Collateral Rate (BGCR): 5.33% (+0.01), volume: $674B
- Tri-Party General Collateral Rate (TGCR): 5.33% (+0.01), volume: $656B
- (rate, volume levels reflect prior session)
CANADA: USDCAD Lacking Direction With An Eye Still On Bull Trigger
Apr-02 12:01
- USDCAD at ~1.356 holds close to earlier lows despite e-minis slipping further and crude futures paring latest gains. It’s off yesterday’s high of 1.3587 in a move that took the pair back into pre-Easter ranges.
- The trend outlook remains bullish with resistance at the repeatedly tested bull trigger of 1.3614.
- There is no notable option expiry at nearby strikes for today’s NY cut, adding scope for reaction to any surprises in the US JOLTS report.
- Last week’s CFTC data showed a sizeable widening in CAD net shorts as of Mar 26. They stand at -26% OI (from -16% the week prior) having been almost neutral in late Feb, moving back closer to the recent low of -34% seen late last year.
- Recapping yesterday’s data, the BOS/CSCE surveys were mixed. Of note within the BOS, business sentiment improved and fewer companies are expecting recession, but from a dovish angle there was decent moderation in price-setting behaviour, a sizeable shift from those seeing 2Y average price increases of >3% to 2-3% and a deterioration in capex intentions.
- Adding to dovish developments, separate insolvency data for February showed a further sizeable 25% Y/Y increase for consumers and more notably reinforced the sharp increase for businesses seen in Jan, holding 122% Y/Y in Feb.
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