STIR: Holding Flattening Helped By Waller Sources Story
Aug-07 16:47
- Fed Funds implied rates are up to 1bp higher on the day, holding the day’s move that came early in US hours before a small tailwind from a hawkish BoE cut.
- Bloomberg sources reporting that Fed Governor Waller is emerging as a top candidate for Fed Chair among Trump’s advisers had unsurprisingly little impact on near-term meeting odds but saw a flattening in rates curves.
- Cumulative cuts from 4.33% effective: 23bp Sep, 40bp Oct, 60bp Dec, 71bp Jan and 84bp Mar.
- The SOFR implied terminal yield of 3.06% (SFRH7) is 3.5bp higher on the day but still roughly prices five cuts from current levels. Largest increases in implied yields on the day have some in 2H26 contracts (+4.5bp).
- Tomorrow sees a particularly thin docket, with just St Louis Fed’s Musalem (’25 voter, hawk) speaking on banking and credit at 1020ET (text + Q&A). He’ll be arguably the most hawkish FOMC member to have spoken since Friday’s NFP report – likely one of the seven dots who pencilled in no cut this year – and any mon pol comments will be watched accordingly.
- Atlanta Fed's Bostic (non-voter) today repeated that he still sees one rate cut this year, as he updated after last week’s NFP report. He reiterated there are reasons to be skeptical that the inflationary effects from tariffs will be temporary.
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FED: US TSY 3Y AUCTION: NON-COMP BIDS $150 MLN FROM $58.000 BLN TOTAL
Jul-08 16:45
- US TSY 3Y AUCTION: NON-COMP BIDS $150 MLN FROM $58.000 BLN TOTAL
US: President Trump Latest Comments/Headlines on Trade Deals
Jul-08 16:43
- President Trump states that August 01 is not a change of deadline, it’s a clarification and that the incentive remains for countries to deal in the US. Trump believes the administration is picking out low and fair tariff numbers, with most rates lower than what the US is being charged. Trump reiterates his prior threats on a 10% tariff for nations in BRICS, saying that anybody in BRICS will be getting that charge pretty soon.
- Moving onto the dollar, Trump states that if people want to challenge dollar, they'll pay price.
- On negotiations with the EU, Trump says the EU was much worse than China in dealing with, but that Von Der Leyen has been very nice recently and that a letter to the EU is probably two days away.
- Regarding some other letters, Trump says “we have some 60, 70%. Those are ones with massive you know, where we have massive trade deficits because they've treated us very badly. But I would say in every case, I'm treating them better than they treated us over the years.
- Trump says that the administration could have been much harsher on trade, and that they have the ability to go higher with tariffs.
US TSYS/SUPPLY: WI 3Y
Jul-08 16:40
- WI holding steady ahead of the $58B 3Y note auction (91282CNM9) cut-off at 1300ET.
- 3Y WI is currently at 3.881%, 9.1bp rich to last month's tail: 3.972% high yield vs. 3.967% WI
