STIR: Modest Hawkish Move In Fed Pricing After Data
Very modest hawkish reaction in Fed pricing on the back of the weekly jobless claims and Philly Fed data.
- The former sees a lower-than-expected initial claims release, and upside revisions to the fraud-impacted prior reading, while the latter was firmer than expected and saw a sharp swing lower in the prices paid component (46.8 vs. 66.8 last time out).
- Continuing claims also moved further away from cycle highs.
- The noisiness in the claims data in recent weeks (driven by fraud in Texas), as well as the ongoing lack of clarity when it comes to definitive corrections, limits initial follow through.
- The fall in the Philly Fed prices paid component also factors in as well.
- Market shows 22bp of easing for October, 44bp through year-end and 93bp through June, 1-2bp less dovish vs. pre-data levels.
- Dec pricing ~7bp off multi-month dovish extremes registered last week.
- SOFR-implied terminal rate pricing at 2.955% vs. 2.93% heading into the data.
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US: MNI POLITICAL RISK - Cautious Optimism After Ukraine Summit
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- President Donald Trump will sign a congressional bill at 13:00 ET 18:00 BST. Across the West Wing, Press Secretary Karoline Leavitt will brief reporters at the same time.
- Yesterday, President Trump convened an extraordinary meeting of European leaders at the White House to discuss the next steps for ending the Ukraine war. The summit promised security guarantees for Ukraine and calmed nerves in Europe, following the Trump-Putin summit in Alaska. Please find a comprehensive analysis of the summit inside.
- The House Republican Study Committee is hosting GOP staff this week for more discussions on a second reconciliation package.
- Hamas yesterday accepted an updated US-brokered ceasefire proposal for Gaza, in a last-ditch effort to avoid a major new Israeli offensive in Gaza.
- India, China, Russia, and Brazil have signalled closer cooperation in response to Trump’s trade war.
- Poll of the Day: The global political risk outlook worsened slightly month-on-month
Full Article: US DAILY BRIEF
CANADA: Core CPI Latest Trends
Core CPI (median & trim av - BoC focus):
% M/M: 0.18 in Jul'25 after 0.23 in Jun'25
% 3mth ar: 2.43 in Jul'25 after 3.39 in Jun'25
% 6mth ar: 3.01 in Jul'25 after 3.16 in Jun'25
% Y/Y: 3.05 in Jul'25 after 3.00 in Jun'25
CPI xFE (ex food & energy):
% M/M: 0.06 in Jul'25 after 0.19 in Jun'25
% 3mth ar: 2.09 in Jul'25 after 3.16 in Jun'25
% 6mth ar: 2.65 in Jul'25 after 3.05 in Jun'25
CPIX (ex 8 most volatile & indirect taxes):
% M/M: 0.06 in Jul'25 after 0.32 in Jun'25
% 3mth ar: 2.3 in Jul'25 after 3.87 in Jun'25
% 6mth ar: 2.46 in Jul'25 after 3.12 in Jun'25
Source: Bloomberg Finance L.P., MNI
CAD: The CAD drifts lower Post Canadian Inflation
- Just a few pips gained (18 pips) in the USDCAD after the Canadian inflation comes 1 tenth below consensus.
- Small resistance moves down to 1.3831, but would need a spike all the way to 1.3872 to just reverse US NFP's sell off from the 1st August.
- There has been no reaction in the likes of the EURCAD.
