US 10YR FUTURE TECHS: (H5) MA Studies Highlight A Dominant Downtrend

• EUR/USD: $1.0300(E2.0bln), $1.0325(E3.3bln), $1.0400(E2.2bln), $1.0415-20(E1.3bln), $1.0450(E921mln), $1.0490-00(E1.4bln)
• USD/JPY: Y153.00($1.5bln), Y156.00-05($2.2bln)
• EUR/JPY: Y159.40(E1.3bln), Y166.20($1.2bln)
• AUD/USD: $0.6200(A$775mln), $0.6245-50(A$939mln)
• USD/CAD: C$1.4285($703mln)

• The importance of UK labour market data may have fallen a little for the MPC, but it is still incredibly important for the market, despite growth concerns having picked up recently and activity and PMI data increasingly watched.
• The scope for further revisions make this month’s print even more unpredictable.
• Rounded to 1dp, the majority (6/8) of analyst forecasts we have seen for private sector regular AWE look for a 5.8%Y/Y print in the 3months to November, up from 5.37%Y/Y in the 3-months to the end of October. The other two forecasts we have seen look for 5.7%.
• In terms of the “headline” whole economy AWE numbers, ex-bonus forecasts are generally 5.5%Y/Y in the 3-months to November (from 5.19%Y/Y in the 3-months to October) while the total (including bonus) whole economy AWE forecasts are split between 5.6-5.7%Y/Y in the 3-months to November (with one analyst looking for 5.5%).

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• There is, as always, a lot to unpack within the BOS and CSCE surveys but on inflation expectations, businesses in Q4 broadly gave back some of the downward progress seen in Q3 whereas consumers further converged towards more typical readings.
• Within the details, the BOS 2Y confirmed last quarter’s notable step lower to 2.5% but the separate monthly Business Leaders’ Pulse (BLP) readings all accelerated 20bps in December vs September readings across 1-5Y periods.
• Ranging from 2.6-2.8%, these BLP readings remain within the 1-3% target range although 2.6% for the 2Y is the highest end-quarter reading since Dec’23 whilst the 2.7% for the 5Y is the highest end-quarter reading since the BLP started in mid-2022 (but with a few joint highs at 2.7% in other months).
• Consumer inflation expectations meanwhile saw a sharp step lower for the 1Y to 3.05% (-80bps) whilst the 2Y and 5Y broadly consolidated Q3’s moderation with 3% readings.