OPTIONS: Expiries for Aug08 NY cut 1000ET (Source DTCC)

Overall inflation expectations receded in June for the 2nd consecutive month in the New York Fed's Survey of Consumer Expectations, following April's apparent peak amid tariff announcements. It adds to evidence that inflation expectations are "well anchored", or at least, certainly not becoming de-anchored even as tariffs are expected to start feeding into goods price inflation over the coming months. 

• 1Y ahead median expected inflation fell to a 5-month low 3.02% (3.20% prior), well down from the 3.63% peak in April. 3Y expectations were steady at 3.00%, and has now been at a rounded  3.0% for 6 of 7 months with the exception being 3.2% in April. And longer-term expectations were also steady, with the 5Y median remaining at 2.61%, a joint 16-month low.
• With almost all FOMC members citing inflation expectations as a key determinant in whether higher tariff-related inflation could lead to broader and more sustained price pressures, continued deceleration in expectations in what is a well-regarded report will provide a little more confidence that a resumption of the easing cycle can begin sooner rather than later.
• While the NY Fed survey has been the steadiest of its kind through the tariff episode, other surveys (UMichigan / Conference Board) have also reflected a moderation in consumer price expectations albeit still at elevated levels.
• In other NY Fed survey results, mean expected probability of losing a job dipped 1.8pp to 14.0% (5-month low), with one-year expected household income growth rising 0.2pp to 2.9% (4-month high), though median expected earnings growth fell 0.2pp to 2.5% and expectations of finding a job in 3 months if one's job is lost fell 1.1pp to 49.6%. Spending growth expectations dipped slightly but remained near the 5% Y/Y area (4.9% after 5.0%).

• US TSY 52W AUCTION: NON-COMP BIDS $1.179 BLN FROM $50.000 BLN TOTAL

• EUR/USD: $1.1600(E536mln), $1.1675-90(E742mln), $1.1700(E1.7bln)
• USD/JPY: Y144.00-10($1.4bln), Y144.50($860mln)
• EUR/GBP: Gbp0.8655-65(E633mln)
• AUD/USD: $0.6425(A$700mln), $0.6550(A$557mln)
• NZD/USD: $0.6075(N$519mln)