In the week ahead four central banks are expected to hold, RBNZ, BoT, BoK and Israel. We also get no less than four speeches from ECB President Lagarde and one from Fed Chair Powell. Bankers were busy last week with Riksbank, Bank Indonesia, SARB, and Iceland sat pat as expected. Turkey’s central bank delivered a much larger hike pushing rates to 40%. Chinese banks left LPRs unchanged. Hungary as expected cut again. Data wise there is plenty for rate watchers, … Continue reading “Central Bank Watch – Week Ahead Focus on Lagarde, Israel, New Zealand, Thailand and Korea Central Banks”
Bond Traders Weekly Outlook: Bonds Eye New Supply, PCE Ahead
U.S. Treasuries closed the shortened week broadly lower. Treasuries followed Thanksgiving with a lower start that returned the 30-yr yield to little changed for the week while yields on shorter tenors were pushed above their closing levels from last week. The 2-yr note showed a five-basis point increase in yield for the week while the 10-yr yield rose three basis points since last Friday, pressuring the 2s10s spread to -48 bps from -46 bps at last week’s settlement. There is … Continue reading “Bond Traders Weekly Outlook: Bonds Eye New Supply, PCE Ahead”
Central Bank of Turkey Raises Rates By 500 bps to 40% with Inflation Stuck at Over 60%
The Central Bank of Turkey hiked by another 500bps, double the consensus, to a new one-week repo rate of 40% at its November meeting. The move was its sixth big interest rate hike in a row as inflation hit 61.36% last month. The weak lira responded minimally, gaining a little but underperforming against most EM crosses and several major ones. The currency response had much to do with the central bank indicating it would keep tightening but at a slower … Continue reading “Central Bank of Turkey Raises Rates By 500 bps to 40% with Inflation Stuck at Over 60%”
Central Bank Watch – Week Ahead Focus on RBA, ECB and FOMC Minutes, Riksbank, Indonesia and Turkey Likely Hikes
A quiet week as expected for central bank watchers as far as monetary policy decisions went with the only rate decision from Bangko Sentral ng Pilipinas (BSP) with no change. The slew of Fed, ECB and BOE speakers mentioned nothing surprising, just the usual doublespeak. In the week ahead we have more activity, BoC’s Macklem to speak on inflation’s costs, we get FOMC, Banxico, ECB and RBA minutes. Riksbank, Bank Indonesia and Turkey’s central bank may hike again. Chinese banks … Continue reading “Central Bank Watch – Week Ahead Focus on RBA, ECB and FOMC Minutes, Riksbank, Indonesia and Turkey Likely Hikes”
Bond Traders Weekly Outlook: Bonds Rally Gained Legs, 20 Year Ahead to Test Resolve
U.S. Treasuries saw a strong bid, which sent yields to fresh low for the month this week across the curve, pressuring yields to levels not seen since September. Eurozone’s final CPI report for October showed the seventh consecutive deceleration in the yr/yr rate to 2.9%. The 30-yr yield saw its lowest close since late September. Fed Governor Barr (FOMC voter) said that policy is at or near the peak rate. This week compressed the 2s10s spread by four basis points … Continue reading “Bond Traders Weekly Outlook: Bonds Rally Gained Legs, 20 Year Ahead to Test Resolve”
Central Bank Watch – Week Ahead Focus on Overload of Fed, ECB and BoE Speeches
The past week went as expected for central bank watchers as far as monetary policy decisions went, however Fed Chair Powell in his speech at the IMF shook the market up with regards to higher rates. The RBA hiked, Banxico held, Peru as expected cut rates. Poland’s central bank unexpectedly halted its easing cycle. Data risk is focused on global inflation and inflation expectations. In the week ahead eyes will be on what looks like an overload of Fed. BoE … Continue reading “Central Bank Watch – Week Ahead Focus on Overload of Fed, ECB and BoE Speeches”
Bond Traders Weekly Outlook: Woeful Long Bond Auction and Powell Sets Tone
U.S. Treasuries U.S. Treasuries finished the week mixed with the long bond rebounding from Thursday’s slide after its woeful auction Thursday. The offering tailed by a record 5.3 bps with the lowest bid-to-cover ratio in nearly two years and lowest indirect takedown in two years. The long bond yield settled within a basis point of its 50-day moving average (4.728%). Shorter tenors extended this week’s show of relative weakness. Reports about a ransomware attack that crippled the Industrial and Commercial … Continue reading “Bond Traders Weekly Outlook: Woeful Long Bond Auction and Powell Sets Tone”
Reserve Bank of Australia Raises Rates to Ten Year High 4.35%, Inflation Pressures Cited
The Reserve Bank of Australia announced a +25bp interest rate hike, as widely expected by analysts after last month’s inflation reports. It is the RBA’s 13th cash rate hike since they began this hiking cycle in May of 2022. The OIS market had been pricing the probability of a rate hike at 50/50. The cash rate at 4.35% is the highest level since May 2012. Prior to this meeting the RBA has left the cash rate unchanged at four consecutive … Continue reading “Reserve Bank of Australia Raises Rates to Ten Year High 4.35%, Inflation Pressures Cited”
Central Bank Watch – Week Ahead Focus on RBA and Powell Again
The week ahead will be a much lighter for central bank watchers but there still plenty of interest. The RBA is being pressured to hike, two LatAm central banks may hold (Banxico) and cut (Peru). National Bank of Poland is expected to cut rates. We’ll hear from Fed Chair Powell again, with a slew of Fed speakers. Data risk is focused on global inflation and inflation expectations. Central Banks delivered for the most part as expected last week. The FOMC, … Continue reading “Central Bank Watch – Week Ahead Focus on RBA and Powell Again”
Bond Traders Weekly Outlook: Bond Market Risk Reversals Are Fast and Furious
U.S. Treasuries had a spectacular week in trapping the late to the party bond bears this week. Friday’s post-NFP pop sent yields on 5s and 10s back through their respective 50-day moving averages that grabbed so many bears to board not long ago. The somewhat smaller-than-expected Treasury quarterly refunding had helped bonds earlier as did the transformation of a “hawkish pause” to “dovish likely done” FOMC. Ten-year Treasury yields slumped 26 bps this week, the biggest weekly drop since March … Continue reading “Bond Traders Weekly Outlook: Bond Market Risk Reversals Are Fast and Furious”