EU CREDIT SUPPLY: EUR/GBP Primary Recap (Provisional BBG Data)

Early NY weakness in Tsys weighs on core global FI peers, with gilt futures briefly through this morning’s low (albeit sticking comfortably within Friday’s range) and Bunds testing lows in futures/Dec highs in yield at typing.

• This is despite an extension of the London morning downtick in crude oil.
• Tsys still the outperformer, while gilts widen ~1.5bp vs. Bunds on the day.
• Intermediates lead the sell off on the U.S. & German curves, while gilts bear steepen.
• Some fresh cross-market widening in EGBs, OATs now ~2.5bp wider vs. Bunds at ~81.5bp. The market still awaits details of the new French cabinet, with the Elysee already pointing to an announcement being made at some point today.

FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $113B
• Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $272B

Fed pricing essentially unmoved by the softer-than-expected durable goods data, with markets remaining very much geared towards the inflation and employment outlooks after last week’s hawkish Fed cut.

• Fed funds futures price 38bp of cuts through ’25, with the next 25bp move not fully discounted until June (~13bp priced through the March meeting and ~18bp showing through the May meeting).
• Our macro team highlights strike action as a likely headwind for the headline durable goods prints, with the core readings more upbeat.