STIR: Fed Rates Holding Most Of PPI Shift, Retail Sales and More Ahead
Aug-15 10:27
- Fed Funds implied rates hold the bulk of their shift higher on yesterday’s far stronger than expected PPI report, although with the path for near-term meetings slightly below pre-CPI levels.
- Cumulative cuts from 4.33% effective: 23.5bp Sep, 38.5bp Oct, 57.5bp Dec, 69bp Jan and 82bp Mar.
- The SOFR implied terminal yield of 3.075% (SFRH7) is near unchanged on the day, hovering around five cuts from current levels.
- Data is likely to be in the driving seat for the bulk of today’s session, with retail sales, import prices, industrial production and the U.Mich consumer survey all due. Geopol remains in focus though ahead of the Trump-Putin meeting at 1500ET.
- Chicago Fed’s Goolsbee (’25 voter, dove) speaks on CNBC at 0830ET for a post-PPI update. He said following CPI that FOMC meetings in the fall are "going to be live" but, notably for one of the more dovish FOMC members, that he's "uneasy" about the idea that tariffs have only a one-off impact on prices and that he wants more surety that inflation won’t be persistent.
- Looking ahead to next week, Fed Chair Powell’s Jackson Hole speech has been formerly set for 1000ET on Friday (Aug 22) titled “Economic Outlook and Framework Review”.
- Marc Summerlin confirmed yesterday that he’s on a list of contenders for the next Fed Chair role. He noted he is close friends with Tsy Sec Bessent with the two having discussed monetary policy “weekly for probably 12 years”. Kalshi has Summerlin at just 3% odds though, with current Fed Governor Christopher Waller in the lead (30%) followed by Kevin Hassett (21%) and Kevin Warsh (14%).
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US TSY FUTURES: Mix Of Short Setting & Long Cover Seen Tuesday
Jul-16 10:22
OI data points to a modest bias towards net short setting on Tuesday, as contracts sold off in the wake of the CPI data.
- The biggest net positioning swing came via short setting in TY futures, although the presence of net long cover across most of the rest of the curve (modest net short setting in TU futures being the exception) made for little net change in exposure in curve-wide DV01 terms.
| 15-Jul-25 | 14-Jul-25 | Daily OI Change | OI DV01 Equivalent Change ($) |
TU | 4,356,744 | 4,353,213 | +3,531 | +132,941 |
FV | 7,025,845 | 7,037,494 | -11,649 | -498,349 |
TY | 4,890,176 | 4,843,970 | +46,206 | +3,021,244 |
UXY | 2,418,186 | 2,431,955 | -13,769 | -1,187,182 |
US | 1,796,835 | 1,798,339 | -1,504 | -204,002 |
WN | 1,961,786 | 1,966,204 | -4,418 | -789,050 |
|
| Total | +18,397 | +475,601 |
LOOK AHEAD: Wednesday Data Calendar: PPI, Fed Speakers, Beige Book
Jul-16 10:21
- US Data/Speaker Calendar (prior, estimate)
- 07/16 0700 MBA Mortgage Applications (9.4%, --)
- 07/16 0800 Richmond Fed Barkin on forecasting data (text, Q&A)
- 07/16 0830 PPI Final Demand MoM (0.1%, 0.2%), YoY (2.6%, 2.5%)
- 07/16 0830 PPI Ex Food and Energy MoM (0.1%, 0.2%), YoY (3.0%, 2.7%)
- 07/16 0830 PPI Ex Food, Energy, Trade MoM (0.1%, 0.2%), YoY (2.7%, --)
- 07/16 0830 New York Fed Services Business Activity (-13.2, --)
- 07/16 0915 Industrial Production MoM (-0.2%, 0.1%), Cap-U (77.4%, 77.4%)
- 07/16 0915 Cleveland Fed Hammack on community development (text, no Q&A)
- 07/16 1000 Fed Gov Barr on financial regulation (text, Q&A)
- 07/16 1400 Fed Beige Book
- 07/16 1530 Atlanta Fed Bostic on Fox Business
- 07/16 1830 NY Fed Williams on economic outlook/policy (text, Q&A)
- Source: Bloomberg Finance L.P. / MNI
EU-BILL AUCTION RESULTS: 3/6/12-month EU-bills
Jul-16 10:11
| Type | 3-month EU-bill | 6-month EU-bill | 12-month EU-bill |
| Maturity | Oct 3, 2025 | Jan 9, 2026 | Jul 3, 2026 |
| Amount | E954mln | E934mln | E899mln |
| Target | E1bln | E1bln | E1bln |
| Previous | E841mln | E997mln | E1.398bln |
| Avg yield | 1.921% | 1.928% | 1.902% |
| Previous | 1.922% | 1.930% | 1.920% |
| Bid-to-cover | 1.55x | 2.02x | 2.73x |
| Previous | 1.74x | 2.6x | 2.92x |
| Previous date | Jul 02, 2025 | Jul 02, 2025 | Jul 02, 2025 |
