CHILE: BCCh Minutes Consistent With July Rate Cut
Jul-03 15:59
- In Goldman Sachs view, the minutes read as dovish, while striking a cautious tone amid elevated external uncertainty at the time of the meeting. In a dovish remark, the MPC noted that bringing forward a rate cut "by one meeting" would have little impact on the macroeconomic backdrop, which suggests that a July cut is likely, consistent with GS’ base case. They continue to forecast three cuts in H2 to a 4.25% terminal rate.
- Meanwhile, Santander says that the minutes reinforced the Board's cautious stance, as further cuts were postponed for tactical and communication considerations, as well as the need for greater clarity regarding the impact of global risks. The minutes highlighted inflation trends in line with projections, the anchoring of two-year expectations at 3%, and a lower-than-expected underlying inflation rate, which moderates upside risks.
- In Santander's view, all of this leaves the door open to a 25bp rate cut at the July 28-29 meeting, in line with market pricing and as part of their baseline scenario, which envisions a 4.5% year-end rate.
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US TSYS: Midday Update: Treasury Yields Rising With US Stocks
Jun-03 15:57
- Treasury futures are trading mixed ahead midday, continuing to pare gains after this morning's higher than expected JOLTS job gains. Latest headlines/social media posting re: potential talk between Pres Trump and China's Xi notwithstanding.
- Tsy Sep'25 10Y futures currently trades -2.5 to session low of 110-12.5, 10Y yield +.0238 at 4.4636%. Technical support well below at 109-12.5, May 22 low. Curves flatter/off lows: 2s10s -0.925 at 49.195, 5s30s -1.204 at 94.656.
- Cross asset: Stocks gaining, top of range (SPX eminis +27.25 at 5974.5), Gold lower/off lows at 3349.56, Bbg US$ index remains firm at 1213.95 (+5.19).
OPTIONS: Larger FX Option Pipeline
Jun-03 15:45
- EUR/USD: Jun05 $1.1050(E5.9bln), $1.1300(E2.3bln), $1.1375-85(E1.6bln), $1.1400(E2.2bln), $1.1415-25(E1.6bln), $1.1500(E1.5bln); Jun06 $1.1500(E1.0bln); Jun09 $1.1425(E1.7bln)
- USD/JPY: Jun05 Y142.00($1.2bln), Y143.00-05($1.1bln), Y145.00-20($1.6bln)
- AUD/USD: Jun06 $0.6300(A$1.5bln)
SOFR OPTIONS: Update Dec'25 SOFR Put Spread Buyer
Jun-03 15:40
- +26,000 SFRZ5 95.37/95.62 put spds, 1.12-1.25 ref 96.15
