STIR: Fed Rates Mostly Still Reflect Soft Weekly ADP
- Fed Funds implied rates have pared most of yesterday’s reaction to soft weekly ADP data specifically for next month's FOMC meeting, although the dovish impact is held further out.
- Cumulative cuts from 3.87% effective: 15.5bp Dec, 26bp Jan, 37bp Mar, 44bp Apr and 58bp Jun.
- Some notable earlier Fed Funds flow: FFF6/G6 paper paid -9.5 on 22.5K, ~24K trades there all day.
- SOFR futures are 1-2 ticks lower on the day, with the implied yield at
- The SOFR implied terminal yield of 3.08% (H7, -1.5bp) holds a sizeable pullback from last week’s multi-month high of 3.16% prior to a softening in a succession of lower tier labor releases.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EURIBOR OPTIONS: Healthy Options Activity Continues
Latest Euribor trades:
- ERZ5 98.0625 call vs 97.9375 put combo. Paper pays 0.75 for the call in 5k (vs 97.98 spot, 46% delta).
- ERM6 98.375/98.625 1x1.5 call spread, paper pays up to 1.5 in 5k
BOE: Greene on labour market weakening slowing - in line with other MPC hawks
"*BOE'S GREENE: SIGNS LABOR MARKET WEAKENING IS BOTTOMING OUT" Bloomberg
This has also been a view shared to some degree amongst the less dovish members of the MPC. Mann said last week that the labour market was not "falling off a cliff" - but that when she voted for a 50bp cut it appeared as though it might be. Tomorrow's report therefore remains extremely important for future monetary policy.
BOE: Greene's comments remain consistent with last week
"*BOE'S GREENE: MIGHT NEED TO WORRY MORE ABOUT 2ND-ROUND EFFECTS
*BOE'S GREENE: I AM CONCERNED ABOUT HOW RESTRICTIVE MONETARY IS
*BOE'S GREENE: CASE FOR HIGHER FOR LONGER RATES, SKIPPING CUT" Bloomberg
These are all in line with recent communications. The MPC statement still describes policy as restrictive too ("The timing and pace of future reductions in the restrictiveness of policy...").
