US TSY FUTURES: Mix Of Long Cover & Short Setting Seen Wednesday
OI data points to a mix of net short setting (TU, FV & TY) and long cover (UXY, US & WN) during Wednesday’s downtick in Tsys.
- The net long cover seen further out the curve was slightly larger from a DV01 equivalent perspective.
- The biggest DV01 equivalent swings came in WN & FV futures.
| 22-Jan-25 | 21-Jan-25 | Daily OI Change | OI DV01 Equivalent Change ($) |
TU | 4,167,111 | 4,155,099 | +12,012 | +454,174 |
FV | 6,190,046 | 6,158,392 | +31,654 | +1,313,659 |
TY | 4,752,136 | 4,742,568 | +9,568 | +610,937 |
UXY | 2,266,119 | 2,270,588 | -4,469 | -388,316 |
US | 1,915,879 | 1,917,503 | -1,624 | -201,107 |
WN | 1,780,425 | 1,792,589 | -12,164 | -2,267,397 |
|
| Total | +34,977 | -478,048 |
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US: Johnson Remains Favourite To Retain Speakership On Janaury 3
House Speaker Mike Johnson (R-LA) appears likely to win re-election to speaker on January 3, despite criticism from President-elect Donald Trump for his handling of a short-term government funding package. According to Polymarket, Johnson is assigned a 73% implied probability of retaining his gavel, down from roughly 95% ahead of the funding crisis.
- On January 3, Johnson will require near-unanimous support from House Republicans. Consistent with previous speaker votes when the minority party votes for their own candidate, Democrats are expected to whip against Johnson’s re-election. House Minority Leader Hakeem Jeffries (D-NY) told MSNBC on Sunday that there is a "real risk" of Johnson failing to become speaker, adding “there will be no Democrats available to save him or the extreme MAGA Republicans from themselves…”
- One Republican Rep, Thomas Massie (K-KY), who backed an effort to oust Johnson earlier this year, is again likely to oppose Johnson’s bid, with a handful of other hardline conservatives reportedly undecided.
- The baseline expectation is that Johnson is likely to be insulated from a major challenge to his speakership as there is no replacement candidate with a clear path to the gavel. Trump’s decision to endorse or oppose could smooth the path for Johnson’s re-election. Trump is likely to balance his dissatisfaction with Johnson’s failure to legislate a debt ceiling suspension with the necessity of stability in the House.
Figure 1: Next Speaker of the House of Representatives
Source: Polymarket
US: SOFR FIX - 24/12/24
SOFR FIX - Source BBG/CME
- 1M 4.33778
- 3M 4.32666
- 6M 4.28467
- 12M 4.24104
USD: Extending Broader highs
- The Dollar is still on the front foot, at a new intraday high against the CAD, SEK, NOK, CNH, KRW, CNY, and CZK.
- Despite the small recovery in Oil, the NOK is still the worst performer in G10s against the Dollar, down 0.34%, and USDNOK now edges above Yesterday's high.
- Main resistance is still at the big Psychological level of 11.5000, managed a 11.4769 high last Week, its highest since March 2020.
