MEXICO: Economy Minister Ebrard Travels To US, Consumer Confidence, Citi Survey
Jun-05 10:30
- Economy Minister Marcelo Ebrard travels to Washington today ahead of talks scheduled for Friday on steel and aluminium tariffs. Ebrard has said that the government will seek the same exemption on US steel and aluminium tariffs that the UK has sealed and avoid the 50% levy imposed on steel. He said that Mexico has complied with all the points in negotiations with the US, adding that the government has a “plan B” in case the 50% steel tariff persists.
- In terms of the macro data, May consumer confidence stats cross at 1300BST(0800ET), while latest formal job creation figures may be released as well. Later today, the Citi economist survey will also be published, including forecasts for the interest rate outlook. In the previous survey, analysts saw another 50bp rate cut in June, consistent with the forward guidance, with the policy rate ending this year at 7.50%.
- May Consumer Confidence, est. 45.6, prior 45.3
- In other news, with nearly all votes counted, a majority of the members elected to the new judicial discipline court will have ties to AMLO, according to reports on Bloomberg. The five-member court will oversee all federal judges, including Supreme Court justices.
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STIR: US Rates Holding Bulk Of Recent Hawkish Shift
May-06 10:28
- Fed Funds implied rates are 0-2.5bp lower on the day as they give back some of yesterday’s increase on ISM Services although are still biased increasingly higher on pre-ISM Services levels as you look later into the year.
- Cumulative cuts from 4.33% effective: Just 0.5bp for tomorrow’s decision, 8bp Jun, 25bp Jul, 45bp Sep and 78bp Dec.
- Yesterday saw sub-75bp of cuts for for 2025 for fresh recent hawkish extremes. There were fewer cuts priced briefly after the reciprocal tariff ‘pause’ on Apr 9 and before that prior to the Apr 2 initial Liberation Day announcements.
- SOFR implied terminal yields are 2bp lower overnight at 3.17% (SFRU6) for 22.5bp below pre-Apr 2 levels having removed 29bp of cuts since Thursday’s ISM manufacturing survey.
- It’s a quiet docket today, with data headlined by the full release for the trade balance (providing into important details and volumes), increasing focus on Tsy Sec Bessent testifying to the House at 1000ET.
- Tomorrow’s FOMC decision also looms large – MNI Fed Preview here.
US 10YR FUTURE TECHS: (M5) Pierces Support At The 50-Day EMA
May-06 10:28
- RES 4: 113-22 1.382 proj of the Apr 11 - 16 - 22 price swing
- RES 3: 113-04 76.4% retracement of the Apr 7 - 11 bear leg
- RES 2: 112-20+ High May 1 and key new-term resistance
- RES 1: 112-01+ High May 2
- PRICE: 111-01 @ 11:17 BST May 6
- SUP 1: 110-27+ Intraday low
- SUP 2: 110-16+/109-08 Low Apr 22 / 11 and the bear trigger
- SUP 3: 110-00 100-dma
- SUP 4: 108-26+ 76.4% retracement of the Jan 13 - Apr 7 bull cycle
The latest pullback in Treasury futures undermines the recent bull cycle. The contract has breached the 20-day EMA, and pierced support at the 50-day EMA, at 110-30+. A clear breach of this average would strengthen a bearish threat and expose 110-16+, the Apr 22 low. For bulls, price needs to trade above key short-term resistance at 112-20+, the May 1 high, to reinstate a bullish theme.
EQUITIES: Large Estoxx put spread
May-06 10:25
SX5E (18th July) 4800/4700ps, bought for 12.6 and 12.7 in ~22.4k.
