MNI: POWELL SAYS PCE INFLATION CAME IN LINE WITH EXPECTATIONS
Mar-29 15:26
- MNI: POWELL SAYS PCE INFLATION CAME IN LINE WITH EXPECTATIONS
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CROSS ASSET: A busy day ahead for Tomorrow
Feb-28 15:21
- Just more order related flow in Govies futures, Bund is back off the low, with over 5k bought, to trade back above 132.20, while the 132.05 support level held again.
- No new headlines or fundamentals.
- Tomorrow really picks up, besides an Ok/Decent Month End Bond extensions for the EU Govies and Treasuries, there's something for all type of interest, which could provide some volatility.
- It includes: Australian Retail Sales, German retail sales, Sweden GDP/Retail Sales, Turkey GDP, France/Spain/ Portugal prelim CPIs, Swiss GDP, Poland final GDP, German Regional/National CPIs, Canada GDP, US IJC, PCE core deflator, MNI Chicago PMI, and Japan Employment.
STIR: ECB Implied Rates Remain Within Recent Ranges
Feb-28 15:06
ECB implied rates have operated within recently observed ranges for the majority of the day, with OIS still pricing 93bps of cuts through the remainder of 2024.
- Comments from the ECB's Kazaks were in line with his typical stance (r.e. warning against easing policy too early).
- The Euribor strip is +1.0 to -1.5 ticks through the blues, recently coming under some light pressure alongside bonds.
- Tomorrow's highlight will be the February flash inflation data from France (0745GMT), Spain (0800GMT) and Germany (1300GMT, with state-level data released from 0900GMT).
- Our full inflation preview is here.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Mar-24 | 3.901 | -0.4 |
| Apr-24 | 3.834 | -7.1 |
| Jun-24 | 3.645 | -26.0 |
| Jul-24 | 3.495 | -41.0 |
| Sep-24 | 3.298 | -60.7 |
| Oct-24 | 3.140 | -76.5 |
| Dec-24 | 2.971 | -93.4 |
| Jan-25 | 2.838 | -106.7 |
| Source: MNI/Bloomberg |
GILTS: Goldman Sachs: Shorter WAM Optimal For Gilts
Feb-28 14:54
Goldman Sachs note that “the maturity of UK debt is the highest in the G10 but has been falling in recent years.”
- “The 3-10y maturities offer the best trade-off between low cost and acceptable volatility.”
- “This suggests to us that the DMO will continue to skew issuance towards shorter maturities more than in the past - a point reinforced by the lower domestic demand for duration in the UK curve.”
- “It also points to ongoing pressure on Gilts vs swaps in the belly of the UK curve.”
