FED: US TSY 17W AUCTION: NON-COMP BIDS $554 MLN FROM $65.000 BLN TOTAL
Sep-10 15:15
* US TSY 17W AUCTION: NON-COMP BIDS $554 MLN FROM $65.000 BLN TOTAL...
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US INFLATION: MNI US CPI Preview: High Early Bar To September Fed Hold
Aug-11 15:14
- We have published and e-mailed to subscribers the MNI US CPI Preview.
Please find the full report including MNI analysis and views from analysts here: https://media.marketnews.com/USCPI_Prev_Aug2025_2fe4cdf4a1.pdf
- The CPI report for July is released on Tuesday Aug 12, at 0830ET. Consensus sees core CPI inflation at a seasonally adjusted 0.3% M/M in June and unrounded analyst estimates broadly echo this with a median 0.32% M/M.
- It would mark a further acceleration from 0.23% M/M in June and 0.13% M/M in May for its fastest pace since January, with the latest firming seen coming from core goods inflation doubling to 0.4% M/M.
- Headline CPI meanwhile is seen at 0.2% M/M (MNI median 0.24% M/M) with a gasoline drag.
- This should start to be a better month to assess tariff passthrough, with rough consensus of three months from tariff implementation to consumer price adjustments, but the fall months could see the largest impact.
- The July PPI report isn’t until Thursday, with early tracking of core PCE estimates at 0.31% M/M implying little net impact from PPI details. That would be an acceleration from 0.26% M/M in June.
- Fed Funds futures currently price 22bp of cuts for the next FOMC meeting in September after the huge downward revisions in the July nonfarm payrolls report less than two weeks ago.
- We see more sensitivity to a downside surprise in July CPI, particularly in core goods components seen sensitive to tariffs. That would set up a replay of the 2024 episode in which after holding in July, the FOMC cut 50bp in Sept (a decision which was, going into the meeting, a “close call” vs 25bp) after a July jobs report saw the u/e rate rise by 0.2pp to 4.25%, even as core PCE appeared to stabilize at 2.6/2.7% Y/Y.
- There is however the August round for NFP and CPI reports before then, with both coming after Fed Chair Powell’s Jackson Hole appearance. We also await Trump’s new BLS commissioner pick.
OPTIONS: Larger FX Option Pipeline
Aug-11 14:56
- EUR/USD: Aug13 $1.1500(E2.5bln), $1.1570-80(E1.0bln), $1.1700(E1.1bln); Aug14 $1.1590-00(E1.5bln), $1.1695-00(E4.3bln); Aug15 $1.1590-00(E1.1bln)
- USD/JPY: Aug13 Y146.75-85($1.4bln), Y147.00($991mln), Y150.25($1.5bln); Aug14 Y147.00-20($1.2bln), Y148.15-30($945mln)
- GBP/USD: Aug14 $1.2975-00(Gbp1.2bln)
- EUR/GBP: Aug14 Gbp0.8690-05(E1.1bln)
- AUD/USD: Aug14 $0.6600(A$1.3bln)
- USD/CNY: Aug15 Cny7.5000($1.7bln)
FOREX: USD's Shallow Bounce Persists Through London Close
Aug-11 14:53
- Greenback pressed higher still in recent trade, resulting in a steeper pullback for EUR/USD here, which shows through the Thursday low of 1.1611. Decent pick up in activity on the latest leg lower, however overall volumes are still well below average for this time of day - as has been the theme across the session so far.
- USD move here not headline driven (decision to deploy National Guard in Washington DC was very much expected) and is not being mirrored in cross-markets: both equities and the front-end of the US curve look relatively stable in comparison.
- Instead, the strength in the USD here likely the extended position-squaring after the soft NFP print earlier this month (USD Index still 1.4% below pre-NFP levels), and ahead of tomorrow's CPI print - the next data input for the September FOMC decision.
- Outside of the EUR, USD gains seemingly have less conviction: GBP/USD has reversed lower after a failed test on the 50-dma of 1.3502, and further weakness here will open 1.3398 support (23.6% retracement for the upleg off the 1.3142 low) ahead of the more notable level at 1.3310. Below here, the bounce will look to have concluded, and a further fade becomes more likely. Tomorrow's wages and unemployment numbers could prove key this week.
