FED: Waller Probably The Pick Of Today’s Heavy Fedspeak
Oct-16 10:31
- Today sees another heavy day of Fedspeak in the last week before the FOMC blackout, although most have spoken recently.
- One area we’ll watch is whether Fed Governor Waller, reportedly still on the shortlist for next Fed Chair, is more dovish than prior measured remarks as was the case with Miran yesterday.
- Miran cited a new tail risk from trade tensions: “There’s now more downside risks than there was a week ago […] “I wouldn’t say that I want even lower rates now than I did a week or a month ago. However, with the change to the balance of risks, I think it becomes even more urgent that we get to a more neutral place in policy quickly.” Going against that, yesterday’s Beige Book was arguably the joint most inflationary Beige Book of 2025 when it comes to price comments.
- Speaking on CNBC on Friday, Waller unsurprisingly affirmed his view that the Fed should follow through with a series of cuts in light of developing labor market weakness (saying the labor market is "not tight in any way, shape or form"). While it's clear he's among the most dovish members on the Committee, eyeing 2 more rate cuts this year, he doesn't advocate too aggressive an easing: "I'm still in the belief we need to cut rates, but we need to kind of be cautious about it."
Today’s schedule:
- ~0700ET – Gov. & CEA’s Miran (voter, dove) on Fox Business
- ~0730ET – Gov. Waller (voter, dove) on Bloomberg TV
- 0900ET – Gov. Waller (voter, dove) at Council on Foreign Relations (text + Q&A)
- 0900ET – Gov. Barr (voter) on stablecoins (text + Q&A)
- 0900ET – Gov. & CEA’s Miran (voter, dove) in IIF moderated conservation (no text)
- 1000ET – VC Supervision Bowman (voter, dove) at stress testing research conference (text only)
- 1000ET – Gov. & CEA’s Miran (voter, dove) in Semafor moderated conversation (no text)
- 1800ET – Kashkari (’26 voter) in town hall event (no text)
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GOLD: Spot Approaching Round Number Resistance At $3,700
Sep-16 10:30
Corrected to "overbought" in the second sub-bullet below:
Spot gold is approaching round number resistance at $3,700, clearance of which would expose Fibonacci projection levels of $3,705.2 (1.382 proj) and $3,744.2 (1.500 proj). A clear bull cycle remains intact, with initial support not seen till $3,614, the Sep 11 low.
- The sharp rally in gold since mid-August has been a combination of Fed independence concerns (amid the ongoing Lisa Cook saga and the more activist approach to Fed personnel management from the White House) and expectations for the resumption of Fed easing. These tailwinds come alongside a backdrop of persistent, relatively price-insensitive, central bank demand.
- Spot has been in overbought territory on a 14-day RSI basis since the start of September, but this has not restricted the recent rally so far.
- Positioning metrics (as of last Tuesday) are unsurprisingly extending further into net long territory, but the indicators we track are still not at historically stretched levels (see charts).
- The signals emanating from tomorrow’s Fed decision present the main near-term risk for gold. Although spot price action has diverged from real US rates since 2022, lower yields should benefit non-yielding bullion on a relative basis going forward.
GOLD: Spot Approaching Round Number Resistance At $3,700
Sep-16 10:21
Spot gold is approaching round number resistance at $3,700, clearance of which would expose Fibonacci projection levels of $3,705.2 (1.382 proj) and $3,744.2 (1.500 proj). A clear bull cycle remains intact, with initial support not seen till $3,614, the Sep 11 low.
- The sharp rally in gold since mid-August has been a combination of Fed independence concerns (amid the ongoing Lisa Cook saga and the more activist approach to Fed personnel management from the White House) and expectations for the resumption of Fed easing. These tailwinds come alongside a backdrop of persistent, relatively price-insensitive, central bank demand.
- Spot has been in overbought territory on a 14-day RSI basis since the start of September, but this has not restricted the recent rally so far.
- Positioning metrics (as of last Tuesday) are unsurprisingly extending further into net long territory, but the indicators we track are still not at historically stretched levels (see charts).
- The signals emanating from tomorrow’s Fed decision present the main near-term risk for gold. Although spot price action has diverged from real US rates since 2022, lower yields should benefit non-yielding bullion on a relative basis going forward.
EURIBOR OPTIONS: Mid Curves Spread
Sep-16 10:20
2RX5 97.6875/97.8125cs vs 3RX5 97.5625/97.6875cs, bought the 2yr for 1.75 in 4k.
