EXECUTIVE SUMMARY
US
MNI FED: St Louis's Musalem Eyes Easing, "Balanced", And Steady Approaches To Policy
St Louis Fed President Musalem (2025 FOMC Voter, hawk) gave an update on his scenario-based outlook for policy in a speech Tuesday, reiterating that overall he agrees with the "wait-and-see" approach adopted by the Fed amid heightened tariff-related uncertainty. Depending on how tariffs and their impacts play out, Musalem appears to suggest he could support either an easing bias; a "balanced" approach, or holding rates indefinitely. In the meantime, policy "is currently well positioned." (Speech text here.)
NEWS
MNI US: Johnson Eyes Wednesday Vote On Megabill, SALT Caucus Says It Will Vote 'No'
House Speaker Mike Johnson (R-LA) is pushing for a final vote on the Republican 'Big Beautiful Bill' on Wednesday night, according to reporting from NBC. “We got same day authority through Rules. So if we can finish this up, that'd be optimal,” Johnson said referring to the procedural vote in the House Rules Committee scheduled for 01:00 ET 06:00 BST tomorrow morning. Earlier, Johnson said at a press conference on Capitol Hill: "We are going to get this done," but declined to take questions from reporters.
MNI US: Freedom Caucus Still "Long Ways Away" On Megabill Following Trump Address
Representative Andy Harris (R-MD), the chair of the conservative House Freedom Caucus, told reporters "we’re still a long ways away" from an agreement with Republican leadership on the 'One Big Beautiful' reconciliation bill, following an address from US President Donald Trump. Harris said "he’s still a no", citing “waste, fraud and abuse” in Medicaid, per Punchbowl News. He added that he thinks "we can get there" but said, "maybe not by tomorrow,” which is when House Speaker Mike Johnson (R-LA) has teed up a key procedural vote in the House Rules Committee.
OVERNIGHT DATA
MNI US DATA: Philly Service Firms Far More Optimistic About Themselves Than Region
Service firms in the Philadelphia Fed district were far more optimistic about their own outlook than the dismal prospects for their own region in May, with the largest discrepancy on this basis since the series started in 2011. The net share who saw an increase in full-time employees in May was also the highest since Jan 2024.
MNI US DATA: Redbook Retail Sales Remained Robust Heading Into 2nd Half Of May
Johnson Redbook's retail sales index posted a 5.4% Y/Y rise in the week ending May 17, which brought May month-to-date to 5.6% Y/Y (above retailers' 5.4% target).
MNI CANADA: Headline CPI Set To Decelerate In April, But Core Measures Seen Steadier
MNI median consensus for Canada April CPI (0830ET) is for Y/Y headline of 1.6% (though there are some forecasts 0.1pp on either side), from 2.3% in March. The average of Trim and Median CPI measures is seen at 2.95% Y/Y, up from 2.85% in March, albeit only from a limited set of analysts.
US TSYS
MNI US TSYS: Big, Beautiful Tax Bill Watching, Could Drive Uncertainty
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA down 114.89 points (-0.27%) at 42677.18
S&P E-Mini Future down 25.5 points (-0.43%) at 5958
Nasdaq down 72.8 points (-0.4%) at 19142.71
US 10-Yr yield is up 3.8 bps at 4.485%
US Jun 10-Yr futures are up 0.5/32 at 110-5
EURUSD up 0.0039 (0.35%) at 1.128
USDJPY down 0.3 (-0.21%) at 144.55
WTI Crude Oil (front-month) down $0.13 (-0.21%) at $62.56
Gold is up $64.33 (1.99%) at $3293.91
European bourses closing levels:
EuroStoxx 50 up 27.42 points (0.51%) at 5454.65
FTSE 100 up 81.81 points (0.94%) at 8781.12
German DAX up 101.13 points (0.42%) at 24036.11
French CAC 40 up 58.79 points (0.75%) at 7942.42
US TREASURY FUTURES CLOSE
3M10Y +5.322, 14.735 (L: 2.53 / H: 16.873)
2Y10Y +3.958, 50.831 (L: 46.478 / H: 52.865)
2Y30Y +6.961, 99.395 (L: 91.824 / H: 101.793)
5Y30Y +5.745, 89.579 (L: 83.609 / H: 91.041)
Current futures levels:
Jun 2-Yr futures up 0.625/32 at 103-11.375 (L: 103-09.875 / H: 103-12.375)
Jun 5-Yr futures up 1/32 at 107-22.25 (L: 107-17.5 / H: 107-27.25)
Jun 10-Yr futures up 0.5/32 at 110-5 (L: 109-28.5 / H: 110-14.5)
Jun 30-Yr futures down 10/32 at 112-15 (L: 112-01 / H: 113-17)
Jun Ultra futures down 17/32 at 115-18 (L: 115-01 / H: 117-02)
MNI US 10YR FUTURE TECHS: (M5) Support Remains Exposed
Treasury futures maintain a bearish tone and the contract is trading closer to its recent lows. Support at 110-01+, 76.4% of the Apr 11 - May 1 bull leg, has been cleared. The breach strengthens a bearish theme and exposes key support at 109-08, Apr 24 low and a bear trigger. Key near-term resistance is at 111-22, the May 7 high. A move above this level is required to signal a potential reversal. First resistance is at 110-23+, the 20-day EMA.
SOFR FUTURES CLOSE
Jun 25 -0.005 at 95.688
Sep 25 -0.015 at 95.905
Dec 25 steady00 at 96.195
Mar 26 +0.015 at 96.410
Red Pack (Jun 26-Mar 27) +0.020 to +0.025
Green Pack (Jun 27-Mar 28) +0.015 to +0.020
Blue Pack (Jun 28-Mar 29) +0.005 to +0.015
Gold Pack (Jun 29-Mar 30) steady to +0.010
REFERENCE RATES (PRIOR SESSION)
US TSYS: Repo Reference Rates
STIR: FRBNY EFFR for prior session:
FED Reverse Repo Operation
RRP usage retreats to $136.033B this afternoon from $180.417B yesterday, total number of counterparties at 32. Usage had fallen to $54.772B last Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B.
MNI PIPELINE: Corporate Bond Update: $18.5B to Price Tuesday
BONDS: EGBs-GILTS CASH CLOSE: Gilts Underperform Post-Pill, Pre-CPI
Yields closed mostly higher across Europe Tuesday, with Gilts underperforming Bunds ahead of UK CPI data.
Closing Yields / 10-Yr EGB Spreads To Germany
MNI FOREX: Greenback Sold as FX Catches Up with Long-End Weakness
Phase of bond sales in both Europe and the US starting to be felt in dollar markets - despite initial resilience to the steepening bias for the US curve. EUR/USD is back toward the upper-end of the day's range, but resistance layered between 1.1278-88 stands ahead of any bullish breakout.
WEDNESDAY DATA CALENDAR
Date | GMT/Local | Impact | Country | Event |
21/05/2025 | 0600/0700 | *** | ![]() | Consumer inflation report |
21/05/2025 | 0900/1000 | ** | ![]() | Gilt Outright Auction Result |
21/05/2025 | 1100/0700 | ** | ![]() | MBA Weekly Applications Index |
21/05/2025 | 1430/1030 | ** | ![]() | DOE Weekly Crude Oil Stocks |
21/05/2025 | 1600/1800 | ![]() | ECB's Lane at Monpol Panel Discussion | |
21/05/2025 | 1615/1215 | ![]() | Richmond Fed's Tom Barkin, Fed Gov. Michelle Bowman | |
21/05/2025 | 1700/1300 | ** | ![]() | US Treasury Auction Result for 20 Year Bond |
22/05/2025 | 2300/0900 | *** | ![]() | Judo Bank Flash Australia PMI |
22/05/2025 | 2350/0850 | * | ![]() | Machinery orders |
22/05/2025 | 0030/0930 | ** | ![]() | Jibun Bank Flash Japan PMI |