EMERGING MARKETS: Global News: October 02

• Fed Funds implied rates for near-term meetings are mixed relative to Friday’s levels post-Labor Day, with slightly higher odds of cut later this month but modestly more hawkish further out.
• Strong increases in WTI prices are having relatively little impact on front rates.
• Cumulative cuts from 4.33% effective: 23bp Sep, 35.5bp Oct, 55bp Dec, 66bp Jan and 80.5bp Mar.
• SOFR futures are up to 5 ticks lower in 2027 contracts vs Friday’s close, although with almost half of that coming yesterday in holiday-thinned trade.
• The SOFR implied terminal yield remains in the H7, at 2.995% (+5bp from Fri) having modestly lifted off last week’s recent lows of ~2.95%. It still points to more than 130bp of cuts ahead.
• Directionally, Fed terminal pricing remains at odds with the trend increase in BoE and ECB expectations over the past couple months.
• Today’s macro focus is on the ISM manufacturing survey before labor data comes into focus tomorrow ahead of Friday’s NFP report.
• Next scheduled Fedspeak comes from St Louis Fed’s Musalem (’25 voter, hawk) on the economy and policy tomorrow at 0900ET. 

SFIU6 97.40/97.50cs, bought for 0.75 in 20k.

• RES 4: 113-06   2.236 proj of the Jul 15 - 22 - 28 price swing
• RES 3: 113-00   Round number resistance  
• RES 2: 112-28+ 2.000 proj of the Jul 15 - 22 - 28 price swing  
• RES 1: 112-20+ High Aug 28 / 29 
• PRICE:‌‌ 112-04+ @ 11:04 BST Sep 2
• SUP 1: 111-31   20-day EMA
• SUP 2: 111-18+ 50-day EMA
• SUP 3: 111-13+ Low Aug 18 and a key support  
• SUP 4: 110-25   Low Aug 1 

The trend outlook in Treasury futures is bullish and the latest pullback appears corrective. Last week’s gains delivered a print above 112-15+, the Aug 5 high and a bull trigger. A breach of this hurdle confirms a resumption of the bull cycle and paves the way for a climb towards the 113-00 handle. Moving average studies are in a bull-mode position, reinforcing a bull theme. First support to watch is 111-31, the 20-day EMA.