EU CAPITAL GOODS: Atlas Copco: 2Q25 Results

• FRBNY EFFR for prior session:
  • Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $104B
  • Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $285B
• Repo Reference Rates
  • Secured Overnight Financing Rate (SOFR): 4.31% (-0.01), volume: $2.692T
  • Broad General Collateral Rate (BGCR): 4.29% (-0.01), volume: $1.087T
  • Tri-Party General Collateral Rate (TCR): 4.29% (-0.01), volume: $1.063T
  • (rate, volume levels reflect prior session)

Fed Funds little changed on net over the 08:30 NY data, with much softer-than-expected housing market data and a roughly inline round of jobless claims readings having no lasting impact.

• Geopolitical risk and related spot inflation pressure remains front of mind for markets, negating any impact from the soft housing readings.
• Note that continuing claims data still signals a softening labour market.
• 0bp of easing priced for today’s Fed decision, 3.5bp showing through July, 18bp through September, 29.5bp through October & 46bp through year-end.
• SOFR futures also see limited reaction.
• The FOMC will hold rates for a 4th consecutive meeting today and continue to convey a patient stance on future rate cut decisions amid elevated government policy-related uncertainty.
• The new quarterly projections will still signal the resumption of rate cuts later this year, but likely only one 25bp reduction instead of the two cuts envisaged at the March meeting.
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• -19,900 FVU5 108-06.5, sell through 108-07.25 post time bid at 0838:10ET, DV01 $867,000.
• The 5Y contract trades 108-04.5 last (+0.5).