Jump to content
House Price Crash Forum

Recommended Posts

The month on month % CPI print today in the US came in at 0.3% ex food and energy. This was higher than the 0.2% expected. Markets partially retraced the previous day's dovish response to Fed minutes and once again project a decent chance of Fed funds hitting 5.50% in Jun06.

Later this week we have Existing Home Sales data in the US which could see markets swing back once more to the doves. The key question now is whether this firm CPI print is a blip or the start of a sustained pick up in inflation? The jury is still out but once the inflation cat is out of the bag expect the Fed to respond with further tightening.

In terms of trading strategy I recommend being long long-dated yields. An inflation fighting Fed should see further rate hikes shifting the whole curve to higher yields. If, however, the Fed takes it's foot off the pedal expect long yields to rise anyhow as markets will fear a Fed complacent about inflation.

10 year yields currently at 5.04% and should head towards 5.50%.

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.