NATGAS: German Gas Demand Fell 2.7% Last Week

The DMO has announced it will be looking to sell GBP5bln of the new 4% May-29 Gilt (ISIN: GB00BVP99566) at its auction next Wednesday, October 8.

FOMC-dated OIS incrementally less dovish (little changed to 1.5bp of easing taken out of Fed meetings through June ’25) since the ISM manufacturing survey crossed, showing 25bp of easing through October, 47bp through December, 69bp through March and 89bp through June.

• SOFR-implied terminal rate pricing last 3.03% vs. 3.085% heading into the ADP data and hawkish September extremes of 3.145%.
• Lack of reaction to the data isn’t particularly surprising given ongoing focus on the labour market (earlier dovish repricing was driven by a soft ADP report) and the ISM release showing only a slight, uneven improvement in manufacturing conditions amid soft demand (as detailed in our recent macro bullet).

White House Office of Management and Budget Director Russell Vought announced on X he is freezing roughly USD$18 billion in funding for infrastructure projects in New York City. 

• Vought wrote, "Roughly $18 billion in New York City infrastructure projects have been put on hold to ensure funding is not flowing based on unconstitutional DEI principles," adding later, "specifically, the Hudson Tunnel Project and the Second Ave Subway."
• The move, which targets the home state of Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Hakeem Jeffries (D-NY), appears to be the first play by the Trump administration to ramp up pressure on Democrats to back a funding measure to reopen the US government.
• President Donald Trump told reporters yesterday, “We can get rid of a lot of things that we didn’t want [during a shutdown] and they’d be Democrat things.”
• Senator John Kennedy (R-LA) told Semafor that Vought is likely to “punish [Democrats] for the rest of their natural lives for this or until, until the shutdown ends.”
• Meanwhile, Senate Majority Leader John Thune (R-SD) said at a presser a short time ago that the three Democrats who voted in favour of the GOP funding measure yesterday did so,  “because they know this [Democrat] strategy is a losing one, and it hurts the American people.”
• Thune is expected to hold a third vote on the GOP/Democrat funding bills at 11:00 ET 16:00 BST. They are expected to fail again but if more Democrats join Republicans, it could signal a quick resolution to the shutdown.