STIR: Fed Rates Softer But Still Only 15bp Of Cuts Priced With June FOMC
- Fed Funds implied rates are 0-4bp lower for 2025 meetings overnight, with early downward pressure from a softer risk environment as China denied there has been US consultations and negotiations on tariffs.
- Nearer-term meetings are still towards the more hawkish end of the past two months.
- Cumulative cuts from 4.33% effective: 2bp May, 15bp Jun, 34bp Jul and 83bp Dec.
- Today sees some data focus on durable goods orders for March and weekly jobless claims.
- Attention then turns to potential headlines following a Bessent-Kato meeting after the G20 Finance Ministers meeting. The post G20 meeting presser is scheduled to take place 1210-1240ET.
- Fedspeak is much more limited today, with just Kashkari (’26 voter) scheduled for a moderated discussion at 1700ET (no text). He said Apr 22 that independence has been “foundational” to the US economy’s success in recent decades amidst pressure to cut rates from President Trump, although also said that tariffs are at least somewhat inflationary in slightly less robust language than Apr 11 when he said tariffs suggest inflation will be going back up again and prefers focusing on the Fed’s inflation goal first. Still, those Apr 22 comments reiterated that the Fed must ensure tariff inflation isn’t persistent.
- Hammack (’26 voter) yesterday reiterated that “This is not a good time to be preemptive. This is a good time to sit and wait and watch” when it comes to adjusting rates.
- There are two days left before the FOMC media blackout kicks in.
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GERMAN AUCTION RESULTS: 2.40% Apr-30 Bobl
| 2.40% Apr-30 Bobl | Previous | |
| ISIN | DE000BU25042 | |
| Total sold | E4.5bln | E4.5bln |
| Allotted | E3.431bln | E3.505bln |
| Avg yield | 2.44% | 2.15% |
| Bid-to-offer | 1.43x | 1.32x |
| Bid-to-cover | 1.87x | 1.69x |
| Average Price | 99.78 | 101.19 |
| Low acc. Price | 99.77 | 101.18 |
| Pre-auction mid | 99.756 | 101.170 |
| Previous date | 04-Mar-25 |
STIR: Short Setting Seen In Most SOFR Futures On Monday
OI data points to net short setting in most SOFR futures on Monday, as contracts ticked lower.
- Pockets of net long cover were seen through the blues, but the short setting dominated in net pack terms.
| 24-Mar-25 | 21-Mar-25 | Daily OI Change |
| Daily OI Change In Packs |
SFRH5 | 1,172,603 | 1,170,751 | +1,852 | Whites | +18,404 |
SFRM5 | 1,264,746 | 1,270,574 | -5,828 | Reds | +16,006 |
SFRU5 | 960,188 | 954,364 | +5,824 | Greens | +3,843 |
SFRZ5 | 1,080,454 | 1,063,898 | +16,556 | Blues | +3,816 |
SFRH6 | 644,917 | 655,494 | -10,577 |
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SFRM6 | 660,055 | 665,787 | -5,732 |
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SFRU6 | 622,531 | 619,840 | +2,691 |
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SFRZ6 | 826,778 | 797,154 | +29,624 |
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SFRH7 | 502,285 | 509,106 | -6,821 |
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SFRM7 | 490,757 | 486,591 | +4,166 |
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SFRU7 | 320,578 | 319,608 | +970 |
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SFRZ7 | 410,330 | 404,802 | +5,528 |
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SFRH8 | 222,833 | 224,380 | -1,547 |
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SFRM8 | 190,887 | 188,525 | +2,362 |
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SFRU8 | 131,654 | 130,560 | +1,094 |
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SFRZ8 | 138,568 | 136,661 | +1,907 |
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US 10YR FUTURE TECHS: (M5) Trend Structure Remains Bullish
- RES 4: 113-01+ 2.0% 10-dma envelope
- RES 3: 112-13 1.500 proj of the Jan 13 - Feb 7 - Feb 12 price swing
- RES 2: 112-01/02 High Mar 4 / 1.382 proj of Jan 13-Feb 7-12 swing
- RES 1: 111-17+/25 High Mar 20 / 11
- PRICE: 110-12+ @ 10:19 GMT Mar 25
- SUP 1: 110-05+ 50-day EMA
- SUP 2: 110-00 High Feb 7 and a key support
- SUP 3: 109-13+ Low Feb 24
- SUP 4: 109-03 Low Feb 21
Treasury futures are trading at the lower end of a broad range. This consolidation phase appears to be a pause in the uptrend. Moving average studies continue to highlight a dominant uptrend - they remain in a bull-mode position. Recent gains have resulted in a print above 111-22+, the Dec 3 ‘24 high. A clear breach of this level would open 112-02 and 112-13, Fibonacci projections. Firm support is unchanged at 110-00, the Feb 7 high.
