Moody’s outlook underscores economic malaise
November 14, 2023
–CPI today expected yoy 3.1% from 3.7% with Core 4.1 from 4.1 last. NFIB Small Business Optimism is expected 90.5 vs last of 90.8. It’s worth noting that these levels are below the 2020 spike low of 90.9. The low of this year was set in April at 89.0. Have to go back to 2015 to find lower prints.
–After Moody’s revised the US Credit Outlook to negative late Friday, treasury prices slumped into Monday morning. However, that weakness faded into the end of the day. Just looking at FVZ3 and TYZ3 charts, it appears as if bottoms are in place (potential reverse head and shoulders). It’s as if the Moody’s outlook underscores weakness in the US economy. On a short term trade I’d stop out of a long on a close below 107 in TYZ3, but I wouldn’t be surprised by a move towards 110-111 by year-end. TYZ3 settled 107-14.
–Yesterday there was a new buyer of 25k TY week-3 106.25/105.75 ps for 4 (settled 3), hedge for CPI today, and PPI, Retail Sales tomorrow.
