"The Oscillation is one of the most dependable features of the investment world, and investor psychology seems to spend much more time at the extremes than it does at a happy medium"
Interesting Week for U.S Rates following the US CPI Release and the Federal Reserve Rate Decision as Rates moved one way down. End of the week saw position squaring as markets looked stretched and NY Fed President Williams (FOMC Voter) comments "We aren’t really talking about rate cuts right now" reminded Markets they may have gotten ahead of themselves.
The week ahead will see the release of
- 19 Dec Housing Starts
- 20 Dec Consumer Confidence and Existing Home Sales
- 21 Dec GDP Final Estimates / Initial Jobless Claims / Philly Fed Index
- 22 Dec PCE Price Index Exp 2.80% yoy (prior 3.00%) and Core PCE Prices Exp 3.40% (prior 3.50%) / Durable Goods Order 2% yoy (prior -5.40%) / New Home Sales / University of Michigan Sentiment
This week will also see 5Y TIPS Auction and 20Y Bond Auction.
Core PCE tends to undershoot Core CPI so all eyes will be on the data.
There has been significant easing in financial conditions since Nov. The US 30Y Mortgage Rate steadily declined 80 bps from 7.90% to 7.10% for the w/e 08 Dec 23. Though I did not find any scheduled Fed Speak this week, could we get any pushbacks from Fed Members on recent easing or a sell off in Rates post the BoJ Policy meeting on Dec 19, 2023
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