US NATGAS: Chicago Natgas Fundamentals

• Today’s mostly robust economic data have helped see Fed Funds implied rates shift back a little closer to recent hawkish extremes when it comes to 2025 meetings.
• The 44bp of cuts eyed to year-end is off last week’s 42bp which was the fewest cuts sustainably priced since February.
• With no rate change expected today (just 1bp priced), a snapshot of near-term meetings: 
  Cumulative cuts from 4.33% effective: 15.5bp Sep, 27.5bp Oct, 44bp Dec, 52.5bp Jan and 65bp Mar.
• The SOFR implied terminal yield of 3.20% (SFRH7) is 3bp higher on the day, firmly within 3.1-3.3% range seen through July.  
• President Trump shortly ahead of the meeting: "*TRUMP: I HEAR FED WILL CUT RATES IN SEPTEMBER" - bbg

European curves flattened Wednesday.

• Early trade was constructive for EGBs and Gilts, stemming from the prior session's late strength in US Treasuries.
• A solid long-end Gilt tender and potentially some month-end dynamics also assisted. 10Y Gilt yields briefly hit their lowest intraday level since Jul 22; for Bunds Jul 24.
• Above-expected US data including private payrolls and GDP triggered a selloff in Treasuries that weighed across the Atlantic, seeing yields finish off their lows.
• Earlier, a slew of Eurozone data didn't really move the needle for markets: Euro Q2 GDP and July consumer confidence were slightly stronger than expected, while Spanish flash July inflation was slightly above-consensus and Belgian HICP decelerated. The ECB's forward looking wage tracker points to a continued decline in negotiation wage growth in Q1 2026.
• The German curve twist flattened, with the UK's bull flattening. Periphery/semi-core EGB spreads were mixed.
• The Federal Reserve decision will be a focus overnight, with Thursday bringing French, Italian, and German flash July inflation data (MNI's preview is here).

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1.2bps at 1.954%, 5-Yr is up 0.3bps at 2.296%, 10-Yr is down 0.2bps at 2.706%, and 30-Yr is unchanged at 3.204%.
• UK: The 2-Yr yield is down 1.8bps at 3.876%, 5-Yr is down 2.6bps at 4.041%, 10-Yr is down 3bps at 4.603%, and 30-Yr is down 2.5bps at 5.416%.
• Italian BTP spread up 0.4bps at 81.4bps / French OAT down 0.3bps at 65.3bps  

RRP usage retreats to $155.481B this afternoon from $171.018B yesterday, total number of counterparties at 27. Usage had fallen to $54.772B on Wednesday, April 16 -- lowest level since April 2021 - compares to July 1: $460.731B highest usage since December 31.