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Non-Tech : Moguls Mantra to the Markets -- Ignore unavailable to you. Want to Upgrade?

To: $Mogul who wrote (118)	7/26/2001 2:10:27 PM
From: $Mogul	Read Replies (1) \| Respond to of 220

1:50 PM Aside from talk of a large curve steepening trade, the short-end's strength might be an indication that market participants are anticipating a weak GDP report tomorrow. Several prominent firms have forecasts that are either for no gain in GDP or for an outright contraction. The strength has continued throughout the day even as the long-end has faltered, and equities have recouped earlier losses. The strength has also occurred despite a narrowing of credit spreads suggesting short-term bets on upcoming data are likely behind the strength. 1:36 PM FED TALK: Fed easing expectations are little changed for the next few meetings, although there has been some movement in less actively traded back-month Fed Fund futures contracts. The September Fed Fund futures contract is unchanged, pricing in a rate of 3.535%, or about an 86% chance of a 25 basis point rate cut at the Aug. 21 FOMC meeting. And the October contract is also unchanged at 3.435%, which implies about a 25% to 30% chance of another 25 basis point cut at the Oct. 2 FOMC meeting. The December Fed Fund futures contract is now trading at 3.42%, down from 3.455% Wednesday and its lowest rate yet. The December contract at one time priced in some chance that the Fed would begin taking back some of its rate cuts by the end of this year but continues to move away from that possibility in the wake of Fed Chairman Greenspan's congressional testimony and the continued uneven performance of economic data.