STIR: Less-Dovish Waller And Daly Set Tone For Less Implied 2025 Easing
The implied Fed rate path shows a little less easing Tuesday, with end-2025 futures pricing a 3.96% funds rate, up 3bp vs Monday.
- That's still below the 4.05% closing peak after last Wednesday's CPI data, but less-dovish-leaning comments by Gov Waller overnight (eyeing rate cuts "at some point this year" vs his musing last month of cuts earlier than markets expected) set the tone. SF's Daly, usually dovish leaning, noted Tuesday that "policy needs to remain restrictive until, from my vantage point, until I see that we are really continuing to make progress on inflation.”
- The first full cut is still only priced for September (around 27bp), with another :"half-cut" implied by year-end.
- Wednesday's schedule includes the January FOMC minutes (MNI's preview will be out later today).
| Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Prior Session (Feb 17) | Chg Since Then (bp) | End of Last Week (Feb 14) | Chg (bp) |
| Mar 19 2025 | 4.32 | -0.6 | -0.6 | 4.32 | 0.0 | 4.32 | 0.0 |
| May 07 2025 | 4.29 | -4.0 | -3.4 | 4.27 | 1.6 | 4.28 | 1.3 |
| Jun 18 2025 | 4.20 | -12.9 | -8.9 | 4.18 | 2.6 | 4.18 | 1.8 |
| Jul 30 2025 | 4.15 | -17.7 | -4.8 | 4.12 | 3.0 | 4.13 | 2.0 |
| Sep 17 2025 | 4.06 | -26.7 | -9.0 | 4.03 | 3.5 | 4.04 | 2.0 |
| Oct 29 2025 | 4.02 | -30.7 | -4.0 | 3.98 | 4.0 | 3.99 | 3.0 |
| Dec 10 2025 | 3.96 | -36.6 | -5.9 | 3.93 | 3.4 | 3.93 | 3.1 |
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EURJPY TECHS: Pierces Support
- RES 4: 165.43 High Nov 8
- RES 3: 164.90 High Dec 30 and a key short-term resistance
- RES 2: 164.55 High Jan 7
- RES 1: 162.14/89 50-day EMA / High Jan 15
- PRICE: 160.46 @ 20:04 GMT Jan 17
- SUP 1: 159.73 Low Jan 17
- SUP 2: 159.51 61.8% retracement of the Dec 3 - 30 bull cycle
- SUP 3: 158.67 Low Dec 11
- SUP 4: 158.24 76.4% retracement of the Dec 3 - 30 bull cycle
EURJPY traded lower last Thursday marking an extension of the current bear cycle. The cross has pierced support at 160.04, the Jan 13 low. A clear break of this level would strengthen a bearish threat and signal scope for a deeper retracement. The next price point to watch is 159.51, a Fibonacci retracement. On the upside, a move above 162.89, the Jan 15 high, would reinstate the recent bullish theme.
USDJPY TECHS: Support At The 50-Day EMA Remains Intact
- RES 4: 160.00 Round number resistance
- RES 3: 159.45 High Jul 12
- RES 2: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing
- RES 1: 158.08/87 High Jan 15 / 10 and the bull trigger
- PRICE: 156.18 @ 19:31 GMT Jan 17
- SUP 1: 154.92 50-day EMA
- SUP 2: 154.44 Low Dec 19
- SUP 3: 153.99 Trendline support drawn from the Sep 16 ‘24 low
- SUP 4: 153.16 Low Dec 17
The trend condition in USDJPY is unchanged, it remains bullish and last week’s move lower appears corrective - for now. The pair has traded through the 20-day EMA and an extension lower would signal scope for a deeper retracement. Support to watch is 154.90, the 50-day EMA. A return higher and a breach of 158.87, the Jan 10 high, would confirm a resumption of the uptrend and open 159.45, the Jul 12 ‘24 high.
EURGBP TECHS: Trend Needle Points North
- RES 4: 0.8530 76.4% retracement of the Aug 8 - Dec 19 downleg
- RES 3: 0.8494 High Aug 26 ‘24
- RES 2: 0.8471 61.8% retracement of the Aug 8 - Dec 19 downleg
- RES 1: 0.8463 High Jan 15
- PRICE: 0.8443 @ 19:24 GMT Jan 17
- SUP 1: 0.8385 Low Jan 14
- SUP 2: 0.8332/8284 50-day EMA / Low Jan 8
- SUP 3: 0.8263 Low Dec 31
- SUP 4: 0.8223 Low Dec 19
EURGBP maintains a firmer tone and the cross continues to trade closer to its recent highs. The latest recovery undermines the recent bearish theme and suggests scope for stronger short-term gains. 0.8376, the Nov 19 high and a key resistance, has been cleared. Note too that 0.8448, the Oct 31 high, has been pierced, a clear break of this hurdle would strengthen the bullish theme. Support at the 50-day EMA is at 0.8332.
