Halister News

(Bloomberg) -- Estimate for next Fed rate hike moved to March, with the next two in June and September, amid improvement in economic data and “hawkish tone” from Fed officials, ABN Amro economist Maritza Cabezas says in note.

• ABN Amro had already forecast three rate hikes in 2017; market continues pricing two
  • Risks tilted toward fourth rate increase, though it will depend on size and timing of fiscal stimulus
• NOTE: Fed fund futures pricing ~80% chance of March rate hike vs 34% on Feb. 22

(Bloomberg) -- Following are forecasts for today’s U.S. economic releases as compiled by Bloomberg News:

• Per. Income 0.3 % m/m; range 0.2% to 0.6% (75 estimates)
• Per. Spending Nom. 0.3% m/m; range 0.2% to 0.5% (75 estimates)
• Pers Spend Infl Adj -0.1% m/m; range -0.3% to 0.1% (16 estimates)
• PCE Deflator 0.5% m/m; range 0.4% to 0.5% (39 estimates)
• PCE Deflator 2% y/y; range 1.9% to 2% (33 estimates)
• Core PCE Prices 0.3% m/m; range 0.2% to 0.35% (56 estimates)
• Core PCE Prices 1.7% y/y; range 1.6% to 1.8% (40 estimates)
• • Today’s report seen providing "important insight into what drove the surprising strength" in January retail sales; savings, inflation or income growth: Bloomberg Intelligence
  • Data issued Feb. 15 showed retail sales rose 0.4% in January in a broad-based advance
  • Income gain seen driven by small businesses and rentals: NatWest economists Michelle Girard and Kevin Cummins

(Bloomberg) -- Though the recent improvement in economic data lowers the “hurdle for the Fed to move earlier rather than later,” there’s still uncertainty surrounding European political risks and U.S. fiscal policy, Credit Agricole strategists Mohit Kumar and Afsaneh Mastouri say in note.

• Market focus turning to Yellen’s March 3 speech as well as February payrolls data due on March 10
• NOTE: Fed fund futures pricing 80% chance of March rate hike vs 34% on Feb. 22

(Bloomberg) -- Credit Agricole CIB sees hawkish leaning of Hungary, Poland markets as “surprising” as both central banks remain on the dovish side, analysts including Sebastien Barbe writes in report.

• Recommends receiving 12x15 FRAs in both markets:
  • In Poland, at 1.92% with 1.73% target, 2.00% stop-loss
  • In Hungary, at 0.70% with 0.40% target, stop-loss at 0.85%
• Risk to this trade include any rise in concerns related to French presidential elections, pressure on euro zone
• Hungary’s 12x15 FRAs currently trading at 0.80%, pricing in 57bps in higher borrowing costs
• Poland’s 12x15 FRAs at 1.96%, showing bets for almost 25bps of rate increase