US TSYS: Rates Rally After Core CPI Misses Estimates, First Cut Targets July
Jan-15 2025 20:25
- Treasuries are trading near the top end of the session range after gapping higher this morning on slightly lower than expected Core & Supercore CPI data.
- Across core categories, below-expected figures in the aggregates were reported: core goods (0.05% vs 0.12% expected, 0.31% prior) and core services (0.27% vs 0.30% expected, 0.28% prior) were each a touch under analyst expectations.
- NY Fed’s Williams (permanent voter) said Treasury yields haven’t been driven by inflation expectations and that yields instead reflect economic strength and fiscal uncertainty. There have been somewhat mixed views of FOMC members on long end yield drivers recently.
- Mar'25 10Y futures are trading at 108-09.5 (+30) after the bell vs. 107-16.5 pre-data, session high at 108-13, still below initial technical resistance at 108-17.5/109-06 (20-day EMA / High Dec 31). Curves Curves mixed however: 2s10s -3.416 at 38.723, 5s30s +5.544 at 43.118.
- Projected rate cuts through mid-2025 moved forward on the calendar with July now fully pricing in a 25bp cut. Current vs. this morning levels* as follows: Jan'25 steady at -0.7bp, Mar'25 at -7.4bp (-4.9bp), May'25 -13.5bp (-10.3bp), Jun'25 -22.9bp (-17.7bp), Jul'25 at -27.2bp (-21.7bp).
- Focus turns to a slew of data on Thursday: Weekly Jobless Claims, Retail Sales, Import/Export Indexes and regional Fed services and business outlooks all at 0830ET. Business Inventories and NAHB Housing Market Index at 1000ET. No scheduled Fed speakers as yet - Fed enters Blackout period Friday at midnight.
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FED: Dec FOMC Analyst Outlook: Higher Longer-Run Rate Eyed (1/2)
Dec-16 2024 20:14
We've published our update of our Dec 13 December FOMC preview to include analyst expectations - PDF is here
- Analysts are unanimous in expecting a 25bp rate cut from the FOMC this week, but there are varying opinions on the path of rates ahead and the number of cuts that the Fed will signal in its Dot Plot for 2025. Here is the summary table from our report:
NEW ZEALAND: Government To Raise Minimum Wage by 1.5% from April 01
Dec-16 2024 20:05
- "The minimum wage for adults will increase by 1.5 percent to $23.50 an hour from April, the government has confirmed." (RNZ)
- Workplace Relations and Safety Minister Brooke van Velden said the increase met the coalition government's commitment to moderate increases to the minimum wage each year, and reflected the current economic climate and labour market conditions.
- "Delivering a modest increase in the minimum wage strikes the right balance between supporting workers and limiting further costs on business," she said.
EURJPY TECHS: Has Pierced The 50-Day EMA
Dec-16 2024 20:00
- RES 4: 165.04 High Nov 15 and a key short-term resistance
- RES 3: 164.21 76.4% retracement of the Oct 31 - Dec 3 bear leg
- RES 2: 162.68 61.8% retracement of the Oct 31 - Dec 3 bear leg
- RES 1: 162.21 High Dec 16
- PRICE: 161.98 @ 16:42 GMT Dec 16
- SUP 1: 158.67/157.87 Low Dec / 09
- SUP 2: 156.18 Low Dec 03 and the bear trigger
- SUP 3: 155.15 Low Sep 16 and a key support
- SUP 4: 153.87 Low Dec 8 / 14 2023
EURJPY continues to trade higher as the cross extends the current corrective cycle. Moving average studies are in a bear mode position, highlighting a dominant downtrend. However, price has pierced the 50-day EMA, at 161.58. A clear break of this average would undermine a bearish theme and signal scope for a stronger recovery. On the downside, initial support to watch is 158.67, the Dec 11 low. A break of this level would signal a reversal.
