In today’s episode, MUFG Head of U.S. Macro Strategy George Goncalves recaps the key events of the last couple weeks of trading into and out of the Labor Day holiday in the U.S. He discusses the renewed hawkishness by central banks, which were taken up a notch at Jackson Hole. Meanwhile, Fed speakers kept the hawkish tone alive post-event, which has helped keep the direction of rates higher since. George highlights that a big driver of the U.S. rates move, especially out the curve, was the global rise in rates, where European and U.K. rates have actually risen more than what we have witnessed in Treasuries. Looking ahead, George will be watching if Fed speakers keep delivering a consistent message, and how hawkish or not the ECB will be at its upcoming policy meeting this week. George concludes that the Fed will likely do 75, so long as market pricing is at least 50/50 chance of a 75 hike at the September meeting.
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