EMERGING MARKETS: China Trade Discussions in Focus with Both US and EU
- US/CHINA (BBG): US President Donald Trump is aiming for a quick win in a pivotal Thursday meeting with Chinese counterpart Xi Jinping, even if the outcome falls short of the sweeping deal he’s teased on issues at the heart of the rivalry between the world’s two largest economies. Ahead of the sit-down, the US president said he wants to extend a pause on higher tariffs on Chinese goods in exchange for Xi resuming American soybean purchases, cracking down on fentanyl and backing off restrictions on rare-earth exports — all while maintaining some trade barriers he sees as essential.
- EU/CHINA (MNI): Beijing still hopes to resolve trade frictions with the European Union, and to separate its dealings with the bloc from its disputes with the U.S., Chinese policy advisors told MNI, while an official in Brussels said the EU is optimistic that it will obtain an agreement to loosen restrictions on rare earth exports.
- TURKEY (BBG): A Turkish court dismissed a case that could topple the leader of the country’s main opposition party, offering temporary relief to investors concerned about renewed political instability. The court case was looking into allegations of irregularities during 2023 internal elections at Turkey’s secular Republican People’s Party, known by its Turkish initials CHP.
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LOOK AHEAD: Wednesday Data Calendar: New Home Sales, Build Permits, 5Y Note Sale
- US Data/Speaker Calendar (prior, estimate)
- 09/24 0700 MBA Mortgage Applications (29.7%, --)
- 09/24 1000 New Home Sales (652k, 650k), MoM (-0.6%, -0.3%)
- 09/24 1130 US Tsy $28B 2Y FRN re-open (91282CNQ0) & $65B 17W bill auctions
- 09/24 1300 US Tsy $70B 5Y Note Auction (91282CPA3)
- 09/24 #### Building Permits (1.312M, 1.312M), MoM (-3.7%, 0.0%)
- 09/24 1610 SF Fed Daly economic outlook, moderated Q&A
- Source: Bloomberg Finance L.P. / MNI
SOFR: Long Setting Most Prominent In Futures On Tuesday, Pockets Of Cover Seen
OI data points to net long setting dominating as SOFR futures ticked higher on Tuesday, with the only short cover of any real note coming in the reds.
| 23-Sep-25 | 22-Sep-25 | Daily OI Change |
| Daily OI Change In Packs |
SFRU5 | 1,469,770 | 1,461,381 | +8,389 | Whites | +39,767 |
SFRZ5 | 1,559,007 | 1,550,994 | +8,013 | Reds | +7,684 |
SFRH6 | 1,180,726 | 1,163,177 | +17,549 | Greens | +11,130 |
SFRM6 | 1,053,819 | 1,048,003 | +5,816 | Blues | +8,905 |
SFRU6 | 930,052 | 938,440 | -8,388 |
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SFRZ6 | 1,074,520 | 1,042,996 | +31,524 |
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SFRH7 | 744,495 | 745,722 | -1,227 |
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SFRM7 | 802,467 | 816,692 | -14,225 |
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SFRU7 | 665,961 | 661,401 | +4,560 |
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SFRZ7 | 717,820 | 709,544 | +8,276 |
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SFRH8 | 431,095 | 436,204 | -5,109 |
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SFRM8 | 368,415 | 365,012 | +3,403 |
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SFRU8 | 276,589 | 270,876 | +5,713 |
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SFRZ8 | 301,116 | 299,920 | +1,196 |
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SFRH9 | 190,007 | 188,377 | +1,630 |
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SFRM9 | 176,432 | 176,066 | +366 |
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US TSY FUTURES: Net Long Setting In TY Futures Noted On Tuesday
OI data points to a mix of net long setting (FV, TY, UXY and WN) and short cover (TU & US) as Tsy futures settled higher on Tuesday, with the only meaningful positioning swing coming via the net long setting in TY futures (~$2.3mln DV01).
| 23-Sep-25 | 22-Sep-25 | Daily OI Change | OI DV01 Equivalent Change ($) |
TU | 4,531,832 | 4,560,564 | -28,732 | -984,506 |
FV | 6,750,221 | 6,733,778 | +16,443 | +725,919 |
TY | 5,477,985 | 5,442,415 | +35,570 | +2,331,635 |
UXY | 2,373,993 | 2,370,888 | +3,105 | +272,902 |
US | 1,834,358 | 1,834,493 | -135 | -19,167 |
WN | 2,019,868 | 2,018,623 | +1,245 | +232,128 |
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| Total | +27,496 | +2,558,912 |
