EU AUTOMOTIVE: Jaguar Land Rover: 2Q26 Results

BTP Block Trade, suggest buyer:

• IKZ5 ~1.1k at 121.26.

• Fed Funds implied rates are little changed overnight, sitting marginally higher than pre-Powell levels for near-term meetings but unchanged out in mid-2026 on the same post-Powell basis.
• SOFR futures are within -0.5 to +1 ticks post-Powell looking out to 2027.
• FF cumulative cuts from 4.10% effective: 24bp Oct, 47.5bp Dec, 61.5bp Jan, 73.5bp Mar, 81.5bp Apr and 96bp Jun.
• The SOFR implied terminal yield of 2.95% (SFRH7) is unchanged on the day, towards recent lows (2.84% close on Sep 8 vs cycle lows of 2.77% in Sep 2024 ahead of the then start of the FOMC’s easing cycle). It points to 115-120bp of cuts ahead depending on fixed rate assumptions.
• Powell yesterday kept an October cut on track. Written remarks: "based on the data that we do have, it is fair to say that the outlook for employment and inflation does not appear to have changed much since our September meeting four weeks ago" when of course they cut rates 25bp eyeing "Rising downside risks to employment". Though in a slightly less dovish note, "data available prior to the shutdown, however, show that growth in economic activity may be on a somewhat firmer trajectory than expected."
• He echoed other speakers including Gov Waller last week in saying that the activity and labor market data aren't necessarily telling the same story, and future policy could depend on how that discrepancy plays out. 

OI data points to a mix of net short cover and long setting as Tsy futures rallied on Tuesday.

• Net short cover in US futures provided the most meaningful net positioning adjustment (~$5.7mln DV01 equivalent), tilting the curve-wide positioning swing in that direction.