STIR: Effective Fed Funds Rate
FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 5.08% volume: $136B
- Daily Overnight Bank Funding Rate: 5.07% volume: $293B
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EGBS: Bunds Bid On U.S. CPI, Some Key Spreads In Wider EGBs compress
Spill over from U.S. CPI is in the driving seat, with German FI futures turning bid on the back of some of the shifts in the underlying CPI metrics that we have already flagged and given that a fair few in the market were attuned to the potential for an upside surprise in the core CPI print (all of the major German bond futures continue to operate in familiar territory). The shift on the wider Bund curve is relatively parallel, with the major benchmarks 4-5bp richer on the day after moderating from post-reaction data richest levels. The spill over from FOMC-dated OIS pricing into ECB-dated OIS has been modest, but aided in facilitating spread compression across some of the major EGB measuring sticks, with French, Spanish, Portuguese and Italian 10s moving to tightest levels of the session vs. Bunds.
US TSY OPTIONS: Jun'23 5Y Call Sale
Scale 5Y call sale up to -20,000 FVM3 111 calls, -15k from 18.5-18.0 recently with another -5,000 at 17 latest.
US: Treasury Sec Yellen To Hold Presser On G7 Trip 11 May
US Treasury Dep't confirms that Treasury Secretary Janet Yellen will hold a press conference on 11 May as part of the meeting of G7 finance ministers and central bank governors taking place in Niigata, Japan 11-13 May. The finance ministers' meeting comes a week before the G7 leaders' summit taking place in the city of Hiroshima form 19-21 May.
- The G7 trip would have likely been used as an opportunity for Yellen to tout the Biden administration's economic agenda and seek to shore up support for maintaining a hard line on Russian sanctions. However, with the debt ceiling 'X date' approaching in the coming weeks, the Treasury Sec is likely going to have to have to use the meeting as an opportunity to reassure partners and markets that a deal will be reached to avoid a first-ever default on US debt.
