STIR: Fed Rates Hold Yesterday’s Hawkish Tilt, PCE Report In Focus

RXZ5 129/128.5/128p ladder vs 131c, bought the ladder for 5 in 3k.

ERH6 98.1875 call, sold for 2 in 8k

• Fed Funds implied rates hold yesterday’s modest decline in risk-off moves ahead of a more notable docket today with the October ADP and ISM Services reports plus any spillover to front rates from Treasury’s QRA at 0830ET.
• Dec FOMC pricing still holds nearly all of the hawkish adjustment seen after Powell noted a strongly divided committee around December cut prospects at Wednesday’s press conference.
• Cumulative cuts from 3.87% effective: 17bp Dec, 26bp Jan, 35bp Mar, 41.5bp Apr and 56bp Jun.
• SOFR futures are mostly 2 ticks higher on the day looking out to end-2027, with the terminal implied yield edging a little lower to 3.075% (H7) after Monday’s 3.115% highest close since August.
• The SOFR implied terminal yield
• Today sees a pause in scheduled Fedspeak before a heavy schedule tomorrow with Barr, Hammack, Musalem, Paulson, Waller and Williams.