ECB: Nagel Continues To Argue For Gradual Policy Normalisation
Jan-17 11:13
Nothing too surprising in the latest comments from Bundesbank President Nagel, speaking to Platow. Nagel has consistently advocated for a gradual approach to ECB policy normalisation, given sticky services inflation.
- He notes that discussions of larger cuts are “only natural”, but gives no hints that he would support such a step at this stage (in line with his hawkish leanings).
- Euribor futures little changed following the speech, while ECB-dated OIS continue to price 100bps of easing through the course of this year.
Select exceprts:
- "“We shouldn’t be too hasty in our efforts to normalize monetary policy,”...“A careful approach is appropriate given high uncertainty. Inflation is currently still elevated. Services prices in particular continue to rise dynamically.”
- "I don’t think it’s a bad thing that we are also discussing 0.5 percentage point”...“That’s only natural.”
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LOOK AHEAD: FOMC Decision
Dec-18 11:06
US Data/Speaker Calendar (prior, estimate). All times ET
- Dec-18 0700 MBA mortgage applications (5.4%, --)
- Dec-18 0830 Housing starts Nov (1311k, 1345k)
- Dec-18 0830 Building permits Nov (1430k, 1419k)
- Dec-18 0830 Current account Q3 (-$266.8bn, -$287.1bn)
- Dec-17 1130 US Tsy to sell $64bn 17-week bills
- Dec-18 1400 FOMC decision/SEP
- Dec-18 1430 Fed Chair Powell press conference
BONDS: US and German 10yr Yields
Dec-18 11:04
- Continued tight early ranges for Bund and Tnotes, with way below average volumes, contracts trade in a holding pattern ahead of the Awaited Fed, but have seen better early selling interest, albeit well within Yesterday's ranges.
- Bund Tech and Yield level is still squarely at the 134.41 gap, and today that 2.263% level comes at 134.40.
- US TYH5 sees support back at the 109.20 despite breaking through and printing a 109.17 low Yesterday.
- Below that printed low, small support comes at 109.12, but the street is clearly mostly focussed on the the initial 4.50% level.
- This level has moved up to 109.04+ vs 109.03 earlier, and the TYH5 low of 109.02+ isn't as important since TYZ4 was the active Month when the Yield tested 4.50% (108.30 low in TYZ4).
MNI: UK DEC CBI INDUSTRIAL TRENDS TOTAL ORDERS -40
Dec-18 11:00
- MNI: UK DEC CBI INDUSTRIAL TRENDS TOTAL ORDERS -40
- UK CBI DEC PRICE INTENTIONS 23
