Quick Facts;
Markets are paying attention to the risk of the Fed raising rates again.
Biden energy advisor says LNG export pause could last 14 months.
China’s 5-year LPR has been lowered by 25 basis points.
The probability that the Fed will leave rates unchanged in March is 91.5%.
News In Details
Markets are paying attention to the risk of the Fed raising rates again
A few weeks ago, markets broadly bet that the Federal Reserve would cut interest rates soon. Traders at that time were torn between whether the Fed would first cut rates in March or May. The current swap trading, however, shows that it’s even not sure whether rates will be lowered in June.
Last Friday, the former U.S. Treasury Secretary Lawrence Summers stated outright that “There’s a meaningful chance maybe it’s 15% that the next move is going to be upwards in rates, not downwards.” That was what market participants didn’t want to hear.
Rosner agreed with Summers on the assessment of the risk of interest rate hikes, but she believes that it makes more sense for the Fed to keep rates high for longer. There are also some more aggressive attitudes than Summers’, such as Jupiter Asset Management executive Mark Nash, who sees a 20% chance of a rate hike next.
Biden energy advisor says LNG export pause could last 14 months
The Biden administration’s pause on new liquefied natural gas permits could last between 10 and 14 months, according to an interview with White House energy adviser Amos Hochstein posted by the media on the social media platform X .
Hochstein said the Department of Energy will gather information before deciding whether to continue the pause or approve some of the projects or all of them. “We’ll have to see what the data is,” Hochstein said. The timeline Hochstein gave is a rough estimate, but it suggests the LNG export pause may not end until the November presidential election is over. Recently, the U.S. has paused the granting of new LNG permits and will evaluate the impacts on the environment, economy, and national security.
China’s 5-year LPR has been lowered by 25 basis points
China’s central bank announced the latest loan prime rates (LPR) on Tuesday, leaving the 1-year LPR unchanged at 3.45% and lowering the 5-year LPR by 25 bps to 3.95%, the largest single-month drop. Subsequently, many banks in Shanghai and Beijing cut mortgage rates at a rapid pace.
The probability that the Fed will leave rates unchanged in March is 91.5%
According to the CME FedWatch tool: the probability that the Fed will keep interest rates unchanged in March in the range of 5.25%-5.50% is 91.5%, and the probability of a 25 basis point cut is 8.5%. The probability of keeping rates unchanged by May is 67.1%, the probability of a cumulative 25 basis point cut is 30.6%, and the probability of a cumulative 50 basis point cut is 2.3%.
Focus of the Day
UTC+8 19:00 U.K. CBI Industrial Trends – Orders (Feb)
UTC+8 21:00 U.S. FOMC Member Bostic Speaks
UTC+8 02:00 Next Day: FOMC Member Bowman Speaks
UTC+8 03:00 Next Day: FOMC Monetary Policy Meeting Minutes
UTC+8 05:30 Next Day: U.S. API Crude Oil Stocks for the Week to Feb. 16
