STIR: Fed Rate Path A Touch Higher, Potential Next Fed Chair Warsh Late On
Apr-25 10:17
- Fed Funds implied rates for near-term are relatively little changed overnight, between 0-1.5bp higher for 2025 meetings.
- There has been relatively little net impact from Hammack (’26, hawk) saying the FOMC could cut rates in June “if we have clear and convincing data” by then, having reversed much of the initially dovish reaction yesterday.
- Cumulative cuts from 4.33% effective: 2bp May, 16.5bp Jun, 34.5bp Jul, 53.5bp Sep and 84bp Dec.
- The final U.Mich consumer survey headlines today’s docket.
- Special mention also goes to Kevin Warsh speaking late on at 1600ET, speaking at a G30 Spring Lecture on “Central Banking at a Crossroads”. Warsh, a former Fed Governor through 2006-11 (when he resigned), is seen as one of Trump’s top picks for next Fed Chair.
- Trump has recently tried to backtrack from attempts at firing Fed Chair Powell ahead of his term ending May 2026. The WSJ reported Apr 17 that Warsh advised Trump when the two spoke that Powell be allowed to complete his term without interference.
- There is no scheduled Fedspeak today but we won’t be surprised by short notice additions on the sidelines of IMF meetings, such as Gov Waller yesterday.
- The FOMC media blackout starts Sat 0001ET ahead of the May 6-7 meeting.
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US TSY FUTURES: Long Setting Bias On Tuesday
Mar-26 10:16
OI data points to a mix of net long setting (TU, TY & WN) and short cover (FV, UXY & US) during yesterday’s rally, with the former outweighing the latter.
- The net long setting in TU & TY futures provided the only positioning swings of any real note.
| 25-Mar-25 | 24-Mar-25 | Daily OI Change | OI DV01 Equivalent Change ($) |
TU | 3,886,593 | 3,847,819 | +38,774 | +1,500,517 |
FV | 6,313,888 | 6,336,253 | -22,365 | -972,857 |
TY | 4,922,422 | 4,877,908 | +44,514 | +2,892,224 |
UXY | 2,286,183 | 2,291,119 | -4,936 | -438,138 |
US | 1,805,615 | 1,809,925 | -4,310 | -558,380 |
WN | 1,782,885 | 1,780,378 | +2,507 | +482,383 |
|
| Total | +54,184 | +2,905,748 |
ITALY AUCTION RESULTS: BTP Short Term and BTPei auction
Mar-26 10:15
| 2.55% Feb-27 BTP Short Term | 1.50% May-29 BTPei | |
| ISIN | IT0005633794 | IT0005543803 |
| Amount | E3bln | E1.5bln |
| Previous | E2.75bln | E1.25bln |
| Avg yield | 2.38% | 1.02% |
| Previous | 2.38% | 1.17% |
| Bid-to-cover | 1.55x | 1.55x |
| Previous | 1.59x | 1.72x |
| Avg Price | 100.35 | 101.94 |
| Pre-auction mid | 100.324 | 101.893 |
| Prev avg price | 100.36 | 101.40 |
| Prev mid-price | 100.335 | 101.382 |
| Previous date | 25-Feb-25 | 28-Jan-25 |
GREECE T-BILL AUCTION RESULTS: 26-Week GTB
Mar-26 10:10
| Type | 26-week GTB |
| Maturity | Sep 26, 2025 |
| Amount | E500mln |
| Target | E500mln |
| Previous | E500mln |
| Avg yield | 2.10% |
| Previous | 2.19% |
| Bid-to-cover | 2.04x |
| Previous | 2.21x |
| Previous date | Feb 19, 2025 |
