NY Open – 25 vs 50 redux
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Media articles describing Sep FOMC as a ‘close call’ between 25bp and 50bp have caused markets to reconsider risk of the latter. Sep FOMC implied pricing is back to ~37bp. US bull curve steepeners brought 2y yields sub-3.6% and USDJPY through support to trade at 140.50. This set the tone for broader markets, with USD under pressure. US equity futures trade modestly, gold spot is stabilizing at all-time highs. ECB speakers provided some pushback on more hawkish interpretations, but not enough to dent EUR. University of Michigan survey at 10:00 EDT is the main data print for the day, with Citi Economics above consensus for headline sentiment index and below consensus for inflation expectations. Import/export price index beforehand will wrap up a week of US price data. Weekly closes in USDJPY and DXY Index could be indicative in what is set to be a huge macro week, with FOMC just six sleeps away. Latam FX sees BRL July economic activity and digest PEN 25bp cut, but the general flow trend has been for inflows this week. |
