STIR: Sept Implied Fed Rates At 6-Week Lows After Bostic, Goolsbee Comments
Aug-13 19:13
Fed funds futures-implied cuts for September's meeting extend through 26bp, up 2+bp on the day and 1bp since commentary this afternoon by Atlanta Fed's Bostic and 2025 FOMC voter, Chicago's Goolsbee. The 4.07% implied funds rate is the lowest for the September meeting since the solid June payrolls data release on July 3.
- This dovish intraday shift is a little counter-intuitive: Bostic, who doesn't vote in 2025 or 2026, sounded the more dovish of the two, acknowledging that continued evidence of weakness in the labor market could put at risk his current view that only one cut by year-end would be appropriate; Goolsbee, who actually votes in September, said that fall Fed meetings would be "live" but didn't sound all that enthusiastic about easing soon, fretting over the services inflation pickup in July's CPI report report, and seeing job growth weakness as potentially the result of a drop in population growth.
- The shift in September pricing accounts for the bulk of the shift in implied pricing through the next several meetings: Oct and Dec see 3.5bp more implied cuts (43bp and 64bp respectively) on the day, with an additional 4bp through March (5 meetings from now).
| Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Yesterday (Aug 12) | Chg Since Then (bp) |
| Sep 17 2025 | 4.07 | -26.5 | -26.5 | 4.09 | -2.3 |
| Oct 29 2025 | 3.90 | -43.2 | -16.7 | 3.93 | -3.5 |
| Dec 10 2025 | 3.69 | -63.8 | -20.6 | 3.73 | -3.5 |
| Jan 28 2026 | 3.58 | -75.2 | -11.4 | 3.61 | -3.5 |
| Mar 18 2026 | 3.45 | -88.4 | -13.2 | 3.49 | -3.9 |
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EURJPY TECHS: Another Day, Another High
Jul-14 19:00
- RES 4: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 3: 173.43 High Jul 12 ‘24
- RES 2: 172.92 High Jul 16 ‘24
- RES 1: 172.44 High Jul 14
- PRICE: 172.42 @ 16:08 BST Jul 14
- SUP 1: 170.81 Low Jul 11
- SUP 2: 169.48 20-day EMA
- SUP 3: 168.46 Low Jul 1
- SUP 4: 166.88 50-day EMA
The trend condition in EURJPY is unchanged, a bull cycle is in play and the cross continues to trade closer to its recent highs. Fresh gains last week confirm a resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Note that MA studies are in a bull-mode position, highlighting a dominant medium-term uptrend. Sights are on 172.92, the Jul 16 ‘24 high. Support to watch lies at 169.48, the 20-day EMA.
FED: Hassett A "Leading Contender" For Fed Chair: Washington Post
Jul-14 18:52
The Washington Post reported Monday that National Economic Council director Kevin Hassett is "emerging as a leading contender to become the next chair of the Federal Reserve, according to people who have discussed the matter with White House officials".
- Appointing Hassett to succeed Chair Powell (whose term ends May 2026) would be considered a development that augurs support at the top of the Fed for lower rates: in recent weeks he's advocated for strong easing in the Fed funds rate.
- Per the report, "The selection process remains fluid, and it isn't a sure thing that Hassett will get the nod. But Hassett, who leads the National Economic Council and served as a key economic adviser during Trump's first term, has advantages that others lack, said people familiar with the process."
- Hassett's name has been floated several times in this process. The Washington Post lists the usual set of "competitors" for the role: ex-Fed governor Warsh, Treasury Secretary Bessent, and current governor Waller. Hassett is a favorite among the front-runners per political prediction sites: Kalshi has him at 33%, vs Warsh 30%, Waller at 21% and Bessent 13%.
- The Washington Post notes "Fed watchers expect the president could announce his decision as early as this month".
- That would be very early vs other reporting. Indeed, administration officials played down an early announcement that was reported by the WSJ which wrote "In recent weeks, the president has toyed with the idea of selecting and announcing Powell's replacement by September or October, according to people familiar with the matter. One of these people said the president's ire toward Powell could prompt an even-earlier announcement sometime this summer."
US STOCKS: Late Equities Roundup: Interactive Media & Financial Services Leading
Jul-14 18:42
- Stocks have gradually recovered from early session lows Monday, indexes back near late Friday session highs. Currently, the DJIA trades up 61.81 points (+0.25%) at 44443.32, S&P E-Minis up 12.0 points (+0.09%) at 6312.00, Nasdaq up 68.55 points (+0.07%) at 20654.08.
- Monday was a generally muted start to the week with no economic data with sidelined trading accounts ahead of Tuesday's CPI inflation data. Not to mention this week kicks off the latest earnings cycle with banks and financial stocks reporting tomorrow: Blackrock, JPMorgan Chase & Co, Wells Fargo & Co, Bank of New York Mellon, State Street Corp and Citigroup.
- Interactive media and entertainment shares buoyed the Communications sector in the second half, leaders include: Warner Bros Discovery +2.69%, Live Nation Entertainment +2.51%, Netflix +1.97% and Take-Two Interactive Software +1.89%.
- Services shares supported the Financials sector: Arch Capital Group +3.56%, PayPal Holdings +3.33%, Globe Life +1.89% and Coinbase Global +1.82%.
- On the flipside, Energy and Materials sectors continued to underperform in late trade, oil & gas stocks weighing on the former with crude prices receding (WTI -1.39 at 67.06): Halliburton -4.51%, APA -3.43%, Schlumberger -2.92% and Occidental Petroleum -2.63%.
- Meanwhile, chemical and mining stocks continued to weigh on the Materials sector in late trade: Dow Inc -4.23%, LyondellBasell Industries -2.27%, Freeport-McMoRan -2.11%, Eastman Chemical -1.56% and Smurfit WestRock PLC -1.38%.
