Powell today

March 7, 2023

–Powell appears in front of the Senate at 10:00.  According to Steve Liesman prepared text will also be released at that time. The curve continued to invert further.  2/10 closed -91, 2/30 is very near -100, an historic low. [At yest close 4.89% and 3.91%]. Yesterday the ten-year ended up 2 bps at 3.98%.  Today is the three year auction, followed by 10s tomorrow and 30s Thursday.  After Waller last Thursday and Daly over the weekend, who both indicated that the job to control inflation is not over, it’s likely that Powell will stress the need to continue the fight, especially in the context of firm labor markets.  “Yes, we’ve seen some evidence of goods disinflation…BUT…”  Rates at higher levels for a considerable time.

–RBA raised to 3.60 but some analysts are saying there might be only one more hike as wage growth slows. China/US rhetoric continues to heat up. In the afternoon US Consumer Credit is released (for January) and Manheim Used Car index, last at -12.8 yoy, both of which might give some clues as to household resiliency.   New buyer 35k SFRZ3 9412.5/9400ps for 3.0 (settled there ref 9468.0).  The Fed’s estimate for end-of-2023 FF was 5.1% in December.  The new projection will likely rise at the March 22 dot-plot but the 5.875% strike is somewhat aggressive.

Posted on March 7, 2023 at 4:38 am by alexmanzara · Permalink
In: Eurodollar Options

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