PIPELINE: Corporate Bond Update: $1.5B Analog Devices 2Pt Launched

RRP usage recedes to $144.214B this afternoon from $147.505B yesterday, total number of counterparties at 32. Usage had fallen to $54.772B last Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B.

• RES 4: 1.3550 High Feb 24 ‘22
• RES 3: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 2: 1.3402/3444 High May 6 / High Apr 28 / 29 and the bull trigger
• RES 1: 1.3323 High May 9   
• PRICE: 1.3276 @ 16:48 BST May 13
• SUP 1: 1.3140 Low May 12   
• SUP 2: 1.3087 50-day EMA
• SUP 3: 1.3041 Low Apr 14  
• SUP 4: 1.2968 Low Apr 11 

GBPUSD traded lower Monday as the pair extended the correction that started Apr 29. The 20-day EMA has been breached. Furthermore, a minor head and shoulders formation on the daily chart highlights a reversal and reinforces the likelihood of a corrective pullback near-term. Key support to watch is 1.3087, the 50-day EMA. The bull trigger is unchanged at 1.3444, the Apr 28 / 29 high. A break of this level would resume the uptrend. 

• The climb in Fed Funds implied rates has steadied along with equities after climbing solidly since the US cash equity open.
• The Fed rate path was initially little changed for an hour after the April CPI report, which was close to expectations with core CPI at 0.24% (unrounded analyst av 0.27%) and supercore CPI at 0.21% M/M (exactly in line with the average of admittedly just four estimates).
• Cumulative cuts from 4.33% effective: 2.5bp Jun, 9.5bp Jul, 24.5bp Sep, 36.5bp Oct and 52.5bp Dec.
• The ~52bp of cuts priced for 2025 is the least since late February and leaves it close to the median FOMC dot pencilling in 50bp of cuts in what seems like a long while ago since the March SEP.
• The SOFR implied terminal yield of 3.445% is (SFRU6) is 3.5bp higher post-CPI for 1.5bp on the day and 5bp above pre Apr 2 Liberation Day tariff announcement levels. It stands out less on a relative basis though, at what would be its highest close since Mar 27.