RUSSIA: Delegations Meet In Istanbul In 1st Direct Diplomatic Contact Since 2022

• Fed Funds implied rates are up to 3bp lower on the day for 2025 meetings.
• Net risk off trade remains following late yesterday’s news of Nvidia’s export curbs to China although they’re off lows since Bloomberg reported China being open to talks if it sees a number of steps from the Trump administration.
• Cumulative cuts from 4.33% effective: 5bp May, 21bp Jun, 40bp Jul, 58bp Sep and 88bp Dec.
• SOFR futures meanwhile are up to 2 ticks higher through 2026 contracts, with SFRU6 for instance having pared gains of 5.5 ticks pre-China talk headlines.
• The implied terminal yield remains in SFRU6, at 3.22% for 18bp lower than pre-Liberation Day levels.
• Retail sales and IP for March headline the morning docket before Fed Chair Powell at 1330ET in remarks that are expected to reiterate his ‘not in a hurry’ message from less than two weeks ago.  
  • 1200ET – Cleveland Fed’s Hammack (’26 voter, hawk) on “Fed 101” (text + Q&A). She spoke to BBG TV on Apr 9, saying markets look strained but functioning. She acknowledged that the Fed may move much more quickly when it does adjust rates but she prefers to wait than move in the wrong direction. She deemed monetary policy as currently modestly restrictive.
  • 1330ET – Fed Chair Powell (leaning dove) on economic outlook (text + Q&A). He pushed for calm when speaking after payrolls on Apr 4. His opening remarks warned Trump's aggressive tariff hikes on major trading partners could drive inflation persistently higher and pledged the Fed's commitment to making sure inflation doesn't become an "ongoing" problem. In subsequent Q&A: “It feels like we don't need to be in a hurry. It feels like we have time...It's not clear at this time what the appropriate path for monetary policy will be, and we're going to need to wait and see how this plays out before we can start to make those adjustments." Two recaps from his Q&A here and here. 

• Size: E8bln (MNI expected E7-13bln)
• Spread set earlier at 3.15% Nov-31 BTP +13bps (guidance was +14bps area)
• Books closed in excess of E50bln (inc E5.55bln JLM interest)
• Maturity: 15 July 2032
• ISIN: IT0005647265
• Coupon: Short first on 15 July 2025

30-year BTPei:

• Spread set earlier at 0.15% May-51 BTPei RY +36bps (guidance was +38bps area)
• Size: E3bln WNG
• Books closed in excess of E53bln (inc E3.1bln JLM interest)
• Maturity: 15 July 2032
• ISIN: IT0005647273
• Coupon: First full on 15 May

• Settlement: 25 April 2025 (T+5)
• Bookrunners: BBVA / BofA / GSBE SE / JPM (DM/B&D) / Natixis / Societe Generale
• Timing: Books closed, Allocation and pricing to follow