US TSYS: Fed Holds Steady, No Decision on Next Meeting
Jul-30 19:53
- Treasury futures are near late session lows, curves bear flattening as projected rate cuts into year end continue to cool after Chairman Powell said the FOMC has not yet made a decision on what it will do at its next policy meeting in September, adding that current policy is appropriate and there is lots of data between now and then.
- Projected rate cut pricing retreated vs. this morning/pre-data (*) levels: Sep'25 at -11.8bp (-16.9bp), Oct'25 at -21.4bp (-29.1bp), Dec'25 at -37.1bp (-46.6bp), Jan'26 at -45.6bp (--55.6bp). Year end projection well off early July level of appr -65.0bp.
- Treasury futures had pared losses after the FOMC kept rate steady as Fed Govs Waller & Bowman dissented in favor of a 25bp cut. "The majority of the Committee was of the view that inflation is a bit above target, maximum employment is at target" Powell said. "That calls for modestly restrictive, in my way of thinking, modestly restrictive stance right now."
- Futures extended well past this morning's ADP/GDP/Core-PCE lows: Sep'25 10Y futures currently trades -10 at 111-01.5 vs. 110-30.5 low (111-14.5 high). Key support is 110-08+, the Jul 14 and 16 low. Clearance of this level would reinstate a bearish theme. First support is at 110-19+, the Jul 24 low. Curves shift to flatter: 2s10s -1.814 at 43.131, 5s30s -1.397 at 94.131.
- Cross asset: Stocks retreating (SPX eminis -20.0 at 6386.0), Gold weaker at 3271.82, Bbg US$ index remains well bid: 1218.99 (+9.01).
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US TSYS: Tsys Near Late Session Highs with Stocks, US$ at March '22 Lows
Jun-30 19:50
- Treasuries look to finish near late Monday highs, curves bull flattening amid mildly cautious risk-on tone after Canada withdrew last Friday's plans to implement a digital tax on US tech companies, trade talks to resume with US, Hassett said.
- Tsy Sep'25 10Y trades +10 at 112-04 after the bell, key resistance above at 112-23 (High May 1), 2s10s -2.210at 50.476, 5s30s -1.630 at 98.714.
- Amid the renewed focus on rate differentials in FX, the bull flattening move for the US curve has helped the US dollar extend its most recent weakness, with the dollar index falling around 0.5% to fresh cycle lows (March 2022 levels).
- The moves come amid President Trump stepping up his criticism of Fed Chair Powell and his ‘entire board’ over the level of US interest rates. Notably, Goldman Sachs have also pulled forward their call for the next Fed cut to September.
- Also note: Morgan Stanley strategists suggest buying SFRZ5 futures ahead of tomorrow's May Jolts and Thursday's June Non-Farm Payrolls release that may underpin rate cut projections that are over halfway between 50bp to 75bp in rate cuts by year end. "Downside risks to US labor market data remain underpriced, especially considering the potential for near 0k payroll prints starting as soon as July," MS suggested in a recent strategy piece.
- Stocks extended late Monday session highs - either caution to the wind ahead of a heavy data (shortened) week (markets are closed for the Independence Day holiday Friday, which draws the June employment release one day forward). Or month-end tied buying as money managers reallocated funds.
US TSY OPTIONS: Large Aug'25 10Y Ratio Put Spread After the Bell
Jun-30 19:37
125,000 option package:
- 25,000 TYQ5 110.5/111.5 3x2 put spreads, 24 ref 112-04
PIPELINE: Late Corporate Bond Update: Venture Global 2Pt Upsized to $4B
Jun-30 19:33
$11.75B to Price Monday
- Date $MM Issuer (Priced *, Launch #)
- 06/30 $4B #Venture Global Plaquemines $2B 8.5NCL 6.5%, $2B 10.5NCL 6.75%
- 06/30 $4B #SMFG $700M 6NC5 +87, $900M 6NC5 SOFR+119, $700M 8NC7 +97, $700M 11NC10 +102, $1B 21NC20 +102
- 06/30 $1.5B *ABN Amro $750M 3Y +50, $750M 3Y SOFR+75
- 06/30 $1.25B #Niagara Mohawk Power $500M +5Y +85, $750M 30Y +120
- 06/30 $1B *SoftBank $500M 5Y +90, $500M 10Y +110
