EM LATAM CREDIT: New Issue: Brazil's Caixa Economica Federal (Ba1pos /BB /BB)

• The broader risk-off tone with the US pushing ahead with 104% tariffs on China sees Fed Funds implied rates continue their decline to session lows.
• Cumulative cuts from 4.33% effective: 14bp May, 36bp Jun, 58bp Jul and 100bp Dec.  
• Further out the curve, SOFR implied terminal yields meanwhile are back close to where they were at the NY crossover: at 3.125% (SFRU6), they’re 1.5bp lower on the day for 27bp lower since Liberation Day.
• Ahead at 1400ET - SF Fed’s Daly (non-voter) in a moderated discussion on the economic outlook (Q&A only). She hasn’t spoken since Apr 2 tariff announcements but told Reuters on Mar 28 that she still saw two rate cuts this year with the Fed able to take its time to assess the impact of tariffs.  She followed up after the interview with she’s not comfortable starting rate path declines and that the Fed is 100% focused on inflation.

• Having already softened ahead of the 1200ET China additional tariff deadline on a lack of developments, major US equity indices now turn negative:

"*S&P 500 TURNS NEGATIVE, ERASING GAIN OF AS MUCH AS 4.1%
*NASDAQ 100 TURNS NEGATIVE, ERASING GAINS OF AS MUCH AS 4.5%" - bbg

• ESA trades at ~5100 off a session high of 5305.25, having earlier cleared resistance at 5286.50 (Apr 7 high). Support not seen until 4823.00 (Apr 7 low).
• It follows official clarification of the earlier headlines from White House Press Sec Leavitt. 
  "*US MOVING FORWARD WITH 104% CHINA TARIFFS: OFFICIAL
  *ADDITIONAL CHINA TARIFFS START AT 12:01AM APRIL 9: US OFFICIAL" - bbg

Chicago Fed’s Goolsbee (’25 voter, dove) pushes the uncertainty angle under US trade policy in an appearance on public radio. 

• "You just tell us what the conditions are going to be, and then we'll figure out what jacket to put on, right? And the thing is, now what jacket to put on is not clear”.
• He also noted that some Trump administration policymakers are saying that tariffs are not going to last and some saying tariffs will be put in place forever.
• Goolsbee said Trump's tariff increases have been "way bigger" than expected and he is not waiting for the hard data to come in and has spent time talking to consumers and firms in his region.
• "The anxiety I hear the most is this. We just lived through and learned what happens when the supply chain gets disrupted all through Covid. And we just lived through and learned what happens when inflation is raging out of control in '21 and '22. The anxiety is this is going to take us back to a thing we spent the last five years desperately trying to get away from, and is this just going to put us back where the lessons we never wanted to learn become super relevant again?"
• “We can’t really wait to the end of the quarter plus one month before we find out that investment really dropped off and GDP growth is shrinking, and we start seeing layoffs, unemployment, or on the other side, inflation starts soaring,”

Goolsbee had sounded his most hawkish in quite some time yesterday in a separate appearance: 

• “The anxiety is if these tariffs are as big as what are threatened on the US side, and if there’s massive retaliation, and then if there’s counter retaliation again, it might send us back to the kind of conditions that we saw in ‘21 and ‘22, when inflation’s raging out of control,”