GERMANY: Merz Looking To Deregulate Banks - Reuters Sources
Oct-15 11:13
“Germany's Merz aims to slash red tape on banks to boost economy, sources say” Reuters
- “German Chancellor Friedrich Merz will push for deregulation in Europe's banking sector, four people familiar with his thinking said, his latest effort to spur growth in the continent's largest economy”.
- “Merz, who was once chairman of the U.S. investment manager BlackRock in Germany, revealed his position in a recent speech. While acknowledging that increased bank risk buffers and reserves have strengthened financial stability, he warned that these measures have had devastating consequences for the German economy.”
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US TSYS: Back Little Changed, Politics Including Fed Positions In Focus Today
Sep-15 11:04
- Treasuries are on balance little changed from Friday’s close, with cash having firmed through European trading are opening a little lower following a Japan holiday.
- Cash yields are 0.5bp lower (3s) to 0.7bp higher (7s).
- Curves for now holds last week’s flattening, including 5s30s at 105.7bps vs fresh multi-year highs of ~127bps after the August payrolls report two weeks ago.
- TYZ5 trades at 113-07+ (-01+) on thin volumes only just approaching 200k, having eased back from a session high of 113-10.
- Some might look to initial resistance at 113-15+ but a firmer level is seen at 113-29 (Sep 5 high), with a bullish trend sequence in play. Support meanwhile is seen at 112-23+ (20-day EMA).
- Data: Empire Mfg Sep (0830ET)
- Fed positions: Miran confirmation votes (~1730/2000ET) and Cook case – see STIR bullet
- Bill issuance: US Tsy $82B 13W & $73B 26W bill auctions (1130ET)
- Politics: Trump meets Ecumenical Patriarch Bartholomew (1400ET), Trump signs Presidential Memorandum (1600ET). Today also sees a second day of Bessent-He talks in Madrid, with a press conference potentially in the European afternoon
OUTLOOK: Price Signal Summary - Bull Cycle In Gilts Still In Play
Sep-15 10:57
- In the FI space, recent gains in Bund futures resulted in a break of resistance at 128.87, the Aug 28 high and short-term bull trigger. The climb undermines a recent bearish theme and highlights a stronger reversal. Price has moved through the 129.00 handle, signalling scope for an extension towards 129.50, the Aug 5 high. Key support and the bear trigger has been defined at 127.61, the Sep 3 low. The latest pullback is - for now - considered corrective.
- A bull cycle in Gilt futures remains in play - a recent rally highlights a stronger corrective cycle and the contract is holding on to its gains. The move higher is allowing an oversold trend condition to unwind. Price has breached initial firm resistance at 90.84, the Aug 28 and 29 high. A continuation higher would open 92.06, the Aug 14 high. Initial support lies at 90.65, the Sep 5 low.
STIR: Fed Personnel Deliberations Watched Later On
Sep-15 10:51
- Fed Funds implied rates for near-term meetings are near unchanged since Friday’s close.
- Two Fed personnel deliberations today:
- Senate cloture vote on CEA’s Miran nomination as a Fed Governor at ~1730ET before full confirmation voter ~2000ET. Expected to pass having already passed 13-11 in the Senate Banking Committee.
- Watching for a reaction after the Trump administration on Sunday filed an appeal for a stay on a lower court block on Gov Cook's firing, a long-shot bid to remove Cook ahead of the FOMC meeting. The administration previously asked for a ruling by today. While unlikely, the Trump administration is targeting an emergency ruling from the Supreme Court on the so-called 'shadow docket'.
- Data picks up tomorrow with retail sales whilst the FOMC decision of course looms large on Wednesday. MNI Fed Preview: https://media.marketnews.com/Fed_Prev_Sep2025_60a3bc30d1.pdf
- Cumulative cuts from 4.33% effective: 26.5bp Sep, 47bp Oct, 70bp Dec, 82.5bp Jan and 96bp Mar.
- SOFR futures see minor twist flattening, 1 tick lower in the U5 to 1.5 ticks firmer through 2027 contracts.
- The SOFR implied terminal yield of 2.915% (SFRH7, -1.5bp) remains off last Monday’s close of 2.84% (lowest since Sep 2024 and one of the lowest for the cycle) but still points to more than 140bp of cuts ahead.
