Daily digest market movers: 25 or 50 bps rate cut?

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  • A CNN poll revealed that 63% of the viewers saw Harris as the winner of the presidential election debate, Bloomberg reported. 
  • At 11:00 GMT, the Mortgage Bankers Association will release its weekly Mortgage Applications number for the week ending September 6. Prior week, there was a rise of 1.6%, with no forecast available. 
    • At 12:30 GMT, the US Consumer Price Index (CPI) for August will be released:
    • Monthly Headline CPI inflation is expected to remain stable at 0.2%.
    • Yearly Headline CPI inflation is expected to ease to 2.6% from 2.9%.
    • Monthly Core CPI inflation should remain at 0.2%.
    • Yearly Core CPI inflation is expected to remain at 3.2%.
  • At 17:00 GMT, the US Treasury will allocate 10-year notes. 
  • Equities are struggling, with Asian equities already closing with losses often more than 1% on Wednesday. European equities are in the red, though less than 0.5%. Meanwhile US Futures are down by 0.5% on average. 
  • The CME Fedwatch Tool shows a 67.0% chance of a 25 basis points (bps) interest rate cut by the Fed on September 18 against a 33.0% chance for a 50 bps cut.  For the meeting on November 7, another 25 bps cut (if September is a 25 bps cut) is expected by 27.2%, while there is a 53.2% chance that rates will be 75 bps (25 bps 50 bps) and a 19.6% probability of rates being 100 (25 bps 75 bps) basis points lower. 
  • The US 10-year benchmark rate trades at 3.61%, a fresh 15 month low at levels not seen since mid-June 2023. 


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