Latest News

Traders Follow Goldman Call as Cash Piles Into March Rate Hike

0
© Reuters.

(Bloomberg) — In the front-end of the U.S. rates curve, serious money is being put to work as traders position for the strong possibility that the Federal Reserve will hike interest rates at the March monetary policy meeting.

The move follows a number of bank strategists adjusting forecasts and calling for the Fed to raise interest rates four times this year, with the latest being Goldman Sachs’s strategy desk. 

Traders are following these calls, putting cash to work in February Fed funds futures, driving an explosion in open interest. The amount of open positions — or open interest — in the contract now exceeds 200,000 futures as of Friday’s close, just north of $1 trillion in notional value. That’s the most out of all the tenors out to June 2023. The contract expires February 28 and is garnering interest because it is the last Fed funds futures that expires before the March 16 Federal Reserve rate decision.    

Selling in the tenor was again evident in Monday’s early New York session, including one trade for a size of 15,588 holding a notional value of $78 billion. Last week most of the selling was seen Wednesday and Thursday after front-end swaps repriced a hike at the March meeting to 80% following the Dec. 14-15 meeting minutes release. 

As of 10am New York, a March rate hike is priced at 86% chance. Despite the recent selling flurry, there still appears more downside room in the February Fed funds futures should March liftoff conviction grow.  

©2022 Bloomberg L.P.

 

Traders Follow Goldman Call as Cash Piles Into March Rate Hike

Disclaimer:Fusion Mediawould like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Swiss watchdog names Hirschi head of banking supervision

Previous article

Poland to encourage settlements in FX loan cases

Next article

You may also like

Comments

Leave a reply

Your email address will not be published.

More in Latest News