A sharp Fed repricing has taken place over the last couple of months, investors had seen the FOMC cutting rates 6 times this year and the June-Dec calendar spread priced in 80bps of easing in January
We’re heading into the April CPI report and the June-Dec spread is pricing around 40Bps of easing this year, the same measure quoted only one rate cut back in early May
On a relative basis, the hawkish pricing is favouring the USD as implied policy rates see the Fed easing less relative to the ECB, BoE, BoC, RBNZ, and Banxico. The latter is expected to deliver 100bps of rate cuts one year ahead while the Fed is pencilled at 70bps
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