Interest Rate Pricing off Fed Fund Futures pared back 36 bps of cuts this week as Comments from Federal Reserve’s Christopher Waller reinforced what markets were thinking – sharp deviation in Futures pricing from Fed Projections without a corresponding deterioration in Economic Data. UST bears were emboldened and the data release supported the Soft-Landing Narrative. S&P 500 closed at all time highs. USD did not participate in Tsy rally at close of last week. USTs caught up to the USD bearishness. USD index closed the week higher by 0.80%. Atlanta Fed GDPNOW Final Est for Q4 GDP are at 2.4%, Control Group Retail Sales rose 0.80% (est 0.20%, prior revised higher to 0.50%), Initial Jobless Claims fell to Sep 22 lows and Continuing Jobless Claims fell to levels seen in Oct 2023. So far we have not seen the trends in employment numbers as were seen in the sharp dip in Employment component of the ISM Non-Mfg. This week’s release of the S&P PMI numbers would be close...
The specific focus of the Blog is on Global and Domestic interest rates and currencies market. I look at fundamentals to define my bias and corroborate that with a study of price action to put on high conviction trades. The views and opinions are those of author and author alone. ~ Author: Vaishali Bagchi