Daily digest market movers December rate cut hanging by a thread

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  • The Mortgage Bankers Association (MBA) kicks off this Wednesday’s calendar at 12:00 GMT  with its weekly Mortgage Applications tracker. Last week, applications fell by a steep 10.8%. 
  • The US Consumer Price Index (CPI) release for October is due at 13:30 GMT:
  • Monthly headline inflation is expected to remain stable at 0.2%, and the yearly reading is expected to tick up to 2.6% from 2.4%.
  • Monthly core inflation is expected to remain unchanged at 0.3%, with the yearly figure also stable at 3.3%.
  • Five Federal Reserve members are set to speak out this Thursday:
    • Federal Reserve Bank of Minneapolis President Neel Kashkari is interviewed on Bloomberg TV at 13:30 GMT.
    • Near 14:30, Federal Reserve Bank of New York President John Williams delivers welcome remarks at the Academy for Teachers Master Class in New York.
    • Federal Reserve Bank of Dallas President Lorie Logan delivers opening remarks at the ninth joint energy conference hosted by the Federal Reserve Banks of Dallas and Kansas City near 14:45 GMT.
    • Federal Reserve Bank of St.Louis President Alberto Musalem delivers a speech and participates in a Q&A session about the US economy and monetary policy at the Economic Club of Memphis at 18:00 GMT.
    • Around 18:30 GMT, comments are expected from Federal Reserve Bank of Kansas City President Jeffrey Schmid, who delivers a keynote speech at the ninth joint energy conference hosted by the Federal Reserve Banks of Dallas and Kansas City.
  • Equities are looking for direction after their lacklustre performance on Tuesday. Marginal gains and losses are seen in both the European and US equity markets. 
  • The CME FedWatch Tool is pricing in another 25 basis points (bps) rate cut by the Fed at the December 18 meeting by 62.4%. A 37.6% chance is for rates to remain unchanged. While the rate-cut scenario is the most probable, traders have pare back some of the rate-cut bets compared with a week ago.
  • The US 10-year benchmark rate trades at 4.41%, after briefly ticking 4.45% this Wednesday in Asian trading. 


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