EU CONSUMER CYCLICALS: Compass Group: 3Q (to June) results & €1.5b acq.

U.S. Commerce Secretary Lutnick posts the following on Twitter (X):

• "I just listened again to Jerome Powell testify. He goes out of his way to call out tariff price increases POTENTIALLY adding to inflation, as if he’s seen some, but,in fact, he testifies that over the last 2.5 months such inflationary price increases have not materialized. ZERO. He literally states that “the overall inflation picture is pretty positive.” What he avoids discussing is the incredible revenue increase the US has received from these tariffs. Our current run rate exceeds $30 billion per month. $30 billion per month in cash received by the US Treasury to reduce our deficit and lower the amount we need to borrow. Low inflation coupled with impressive increased revenues is why our interest rates should be lowered. Lower interest rates will reduce our deficit by dropping our borrowing costs, and will spur economic growth which drives tax revenues even higher. Win, win, win".
• "That’s why President Trump calls Powell a loser. Because Powell would rather ignore the tariff revenues and keep US rates the highest in the world (for a first class country) because he’s afraid to act. Each 1% cut saves the US hundreds of billions of dollars in interest payments. He should help our economy grow while shrinking our deficit. It is a simple formula. There is no inflation; he just testified to it".
• "Just cut our interest rates, our deficit will naturally shrink and our economy will soar. Jerome Powell—your job is to help Americans not hurt them, so do your job and CUT our absurdly high Interest rates at your next meeting".

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• President Donald Trump is in the Netherlands for a truncated NATO leaders’ summit focused on wrapping up a pledge to boost NATO defence spending to 5% of GDP, a major win that offers Trump a victory lap.
• Trump will meet with Ukrainian President Volodymyr Zelenskyy, with the latter attempting to recentralise Russia’s war in Ukraine after the conflict took a backseat to the Israel-Iran war. Secretary of State Marco Rubio said the US is not ready to consider additional sanctions on Russia.
• Democratic socialist Zohran Mamdani is on track to win the New York mayoralty, triggering another partisan flashpoint in US politics.
• Trump administration officials and Israeli intelligence have pushed back against reports that US strikes failed to significantly damage Iranian nuclear sites.
• Fed Chair Jay Powell is on Capitol Hill for a second round of testimony on the Semi-Annual Monetary Policy Report.
• Senate Majority Leader John Thune (R-SD) is likely to gamble that pressure from Trump will be enough to force the OBBB through the Senate. Thune is expected to hold the first procedural votes on the bill on Friday. The House Freedom Caucus is signalling that they will vote no on the Senate package, in its current form.  
• NEC Director Kevin Hassett said the Trump administration is waiting for Congress to complete the OBBB before announcing pending trade deals.
• Poll of the Day: Republican support for Iran strikes has surged since the military action. 

Full Article: US DAILY BRIEF

SOFR & Treasury options see moderate volumes overnight, trade relatively mixed compared to better upside SOFR calls the last couple sessions. Underlying futures weaker, near recent lows. Curves bear steepen (2s10s +3.802 at 50.527) while projected rate cut pricing largely steady vs. late Tuesday levels (*): Jul'25 at -5.2bp (-4.7bp), Sep'25 at -25.8bp (-25.3bp), Oct'25 steady at -41.2bp, Dec'25 at -59.7bp (-59.6bp).

• SOFR Options:
  • Block, 2,500 2QN5 96.68/96.93/97.18 call flys, 0.75 ref 96.775
  • 2,500 0QN5 97.12/97.18 call spds vs. 96.12/96.37 put spds ref 96.82
  • 2,000 SFRH6 98.50 calls, 2.5
  • 2,000 SFRZ5 95.68/SFRU6 96.12 put spds
  • +2,000 SFRQ5 95.93/96.06 call spds, 4.0 vs. 95.965/0.17%
  • 3,200 SFRU5 95.62/95.75 put spds, 2.5 ref 95.96
• Treasury Options:
  • 8,500 TUQ5 105/106.5 1x2 call spds ref 103-27.75
  • +1,700 TYQ5 108/109.5 2x1 put spds, 3 ref 111-19.5
  • +5,000 TYU5 107/108 put spds, 4 ref 111-14/0.04%
  • +1,500 TYQ5 112.5/114.5 call spds, 21 vs. 111-21/0.23%
  • 1,370 wk4 TU 103.62/103.75/103.87/104 call condors, exp 6/27
  • 4,300 TYQ5 113 calls ref 111-23.5
  • 3,000 TYQ5 111.5 calls