EU CONSUMER STAPLES: Magnum Ice Cream Co: Final Books

Bloomberg reports BofA analysts as now seeing higher risks that the Fed ends QT in October before large-scale buying of T-bills. It follows last week's cash/collateral shift in funding markets, with the impacts on rates touched most recently upon at US TSYS/OVERNIGHT REPO: Funding Pressures Ease But Fed Funds Slower To React (Oct 20, 1021ET). 

• "*RISKS OF FED BALANCE-SHEET RUNOFF IN OCT ARE HIGHER: BOFA SAYS" - bbg
• They see the market becoming more sensitive to settlement dates and that “banks have been fighting for liquidity to buffer against unrealized securities losses” so they’re less willing to lend in the repo market versus 2019.
• That compares with the below taken from our summary of analysts posted after Powell's comments last week: "Powell comments affirm our Fed B/S base case: (1) QT stop at end '25 & move MBS repays into UST, likely bills, at pace of $10-20b/m (2) Fed B/S growth in Mar '26 to offset liability growth (i.e currency & reserves), likely into bills, at pace of $15b/m. Both should see Fed buys in secondary market due to cash flow timing issues. This could provide ~$30b/m of bill support. Fed bill buying helpful for UST WAM shift. Risks are Fed could: (a) end QT or offset liability growth later (b) buy mix of bills & coupons. Fed B/S liability driven growth not QE b/c minimal duration risk removal / financial condition easing."

• RES 4: 115-00+ High Oct 1 ‘24 (cont) 
• RES 3: 114-21+ 1.00 proi of the Aug 18 - Sep 11 - 25 price swing
• RES 2: 114-10   High Apr 7 (cont) and a key resistance 
• RES 1: 114-02   High Oct 17 
• PRICE:‌‌ 113-18 @ 11:08 BST Oct 20
• SUP 1: 113-00   20-day EMA
• SUP 2: 112-30   Low Oct 13 
• SUP 3: 112-19+ 50-day EMA 
• SUP 4: 112-06   Low Sep 25

Treasuries remain in a clear bull cycle. Friday’s initial gains resulted in a breach of key resistance at 113-29, the Sep 11 high. This confirms a resumption of the M/T uptrend. Note that MA studies are in a bull-mode position and this set-up continues to highlight a dominant uptrend. Sights are on 114-10, the Apr 7 high (cont) and the next key resistance. Firm support lies at 112-30, the 20-day EMA. S/T weakness is considered corrective.

• Treasury futures are modestly higher after testing morning highs as Pres Trump talks tough on China "if they don't do business with the US": "CHINA WILL THREATEN US W RARE EARTHS, I REPLY W TARIFFS" Bbg
• The Dec'25 10Y futures contract trades +3.5 at 113-18.5, 113-10.5 low / 113-19 high on moderate volume of 727,000. MA studies are in a bull-mode position and this set-up continues to highlight a dominant uptrend. Sights are on 114-10, the Apr 7 high (cont) and the next key resistance.