BRAZIL: Santander Still Sees 15.50% Terminal Selic Rate, Focus On Guidance
Jan-29 16:40
- Santander says that the BCB’s reference scenario may lead to a worsening of the IPCA projection in the relevant horizon, but not enough to prevent the Copom from delivering the 100bp hike signalled for January today, which will bring the Selic to 13.25% per year.
- A key question is whether the Copom will maintain the "double guidance" of 100bp hikes not only for March, which is already anticipated, but also for May. In their view, the guidance for an adjustment of the same magnitude in March should remain, with the outlook for May staying flexible. Worsening macro conditions make it hard to justify a reduction in pace, but the committee could prefer to gain degrees of freedom given the tightening of financial conditions and potential for weaker activity from Q2 2025 onward.
- Meanwhile, there is no room for the BCB to hesitate in its hawkish wording while inflation expectations are rising. Santander continues to expect the terminal Selic rate to reach 15.50% in June.
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FED: US TSY 13W BILL AUCTION: HIGH 4.230%(ALLOT 95.14%)
Dec-30 16:32
- US TSY 13W BILL AUCTION: HIGH 4.230%(ALLOT 95.14%)
- US TSY 13W BILL AUCTION: DEALERS TAKE 53.19% OF COMPETITIVES
- US TSY 13W BILL AUCTION: DIRECTS TAKE 5.07% OF COMPETITIVES
- US TSY 13W BILL AUCTION: INDIRECTS TAKE 41.74% OF COMPETITIVES
- US TSY 13W BILL AUCTION: BID/CVR 2.38
FED: US TSY 26W BILL AUCTION: HIGH 4.135%(ALLOT 61.57%)
Dec-30 16:32
- US TSY 26W BILL AUCTION: HIGH 4.135%(ALLOT 61.57%)
- US TSY 26W BILL AUCTION: DEALERS TAKE 22.46% OF COMPETITIVES
- US TSY 26W BILL AUCTION: DIRECTS TAKE 7.79% OF COMPETITIVES
- US TSY 26W BILL AUCTION: INDIRECTS TAKE 69.75% OF COMPETITIVES
- US TSY 26W BILL AUCTION: BID/CVR 3.03
US DATA: Stronger Dallas Fed Manufacturing Only Partly Offsets Wider Weakness
Dec-30 16:29
December's Dallas Fed Manufacturing Survey beat expectations with a headline reading of positive 3.4 vs -3.0 expected and -2.7 prior. That's the first positive reading in 32 months and the highest in 33, highlighted by a much stronger new orders reading (up 11 points to -0.9, pointing to unchanged demand from the prior month but still the best reading in 31 months).
- Other readings were mostly stronger vs November, including production, capacity utilization, shipments, expectations, though the employment subindices were a little softer.
- Notably though, there were much lower inflationary pressures evident in the survey, with raw materials prices falling 18 points to a 17-month low 10.5, with finished goods falling 12 points to -3.4, the first negative reading this year.
- Dallas is the 5th regional Fed to publish its December manufacturing report, and overall they were very mixed: Empire fell to 0.2 from 31.2 and Philly to -16.4 from -5.5, with Kansas City to -4 from -2, more than offsetting the improvements in Richmond (-10 from -14) and Dallas.
- That's not to mention the December MNI Chicago PMI which fell to 36.9 vs 40.2 prior, and the preliminary S&P Global PMI dipping to 48.3 from 49.7.
- As such despite an apparent improvement in some regional survey optimism immediately following the November elections (and again, this was quite mixed - the range of survey scores was the broadest since April 2020), the overall theme of the manufacturing sector remaining steady at a weak level generally remains intact.
