STIR: Next Fed Cut Only Fully Priced For Oct Ahead Of Thu Data Deluge
May-14 16:55
- Fed Funds implied rates have pushed to new recent highs over the past two hours, with the Dec 2025 rate at levels last seen on Feb 24.
- Cumulative cuts from 4.33% effective: 2.5bp Jun, 9bp Jul, 22bp Sep, 34bp Oct and 49bp Dec.
- The SOFR implied terminal rate is at 3.48% (SFRZ6) at what would be its highest close since Mar 27.
- Headlines have been relatively light for the sustained move, although the step did come after Bloomberg headlines that China is suspending export controls applied to 28 US entities in a sign of some further trade de-escalation as some eye the likelihood of a temporary pause of 20% “fentanyl” tariffs.
- The moves came some time before the US and Qatar announced an economic exchange worth at least $1.2trn but with only vague details in the White House statement.
- Tomorrow sees a particularly heavy morning, with retail sales, PPI inflation, jobless claims plus Empire & Philly Fed manufacturing reports all at 0830ET.
- Powell then talks on the framework review at 0840ET which could limit its market impact but will be watched closely nevertheless.
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OPTIONS: Euribor Call Structures Prevalent As ECB Week Begins
Apr-14 16:52
Monday's Europe rates/bond options flow included:
- ERM5 98.0625/98.125/98.1875c fly, bought for half in 4k
- ERM5 98.00/98.12cs 1x1.5, sold the 1 at -0.5 in 6k
- ERM5 97.75/97.87cs 1x1.5, bought the 2 for 4 in 6k.
- SFIK5 95.95/96.10cs, bought for 3.75 in 4k
MNI EXCLUSIVE: Former Top Fed Board Official On US Safe Haven Status
Apr-14 16:45
MNI interviews former top Fed board and Treasury official on Fed outlook, Treasury market and US safe haven status -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
TARIFFS: Trump Says Pharma Tariffs "Not Too Distant Future" Suggests Likely 25%
Apr-14 16:27
US President Donald Trump has delivered a wide-ranging press conference alongside Salvadoran President Nayib Bukele at the White House.
- On tariffs, Trump indicates that tariffs on pharmaceuticals will be coming shortly as the US needs to reshore pharma production. He namechecks Ireland as a pharma producer and says: “All I have to do is impose a tariff… The higher the tariff, the faster they come,” referring to companies relocating their manufacturing to the US.
- He says, “its going to be like we have on cars… We have, as you know, a 25% tariff on cars [steel and aluminum],” adding “that category fits right now [for pharma].” Asked about his timeline for implementation, he says: “not too distant future”. Trump declines to offer any information on potential semiconductor tariffs.
- When asked to clarify comments yesterday when he suggested a Russian attack on the Ukrainian city of Sumy was a “mistake”, Trump reiterates that the mistake was on the behalf of Ukrainian President Volodymyr Zelenskyy and former President Joe Biden for allowing the war to start.
- He again blames Zelenskyy for starting the war, “you don’t start a war against someone 20 times your size and then hope some people give you some missiles.” Trump adds that there are, “some proposals on stopping the Ukraine war very soon.”
- Trump says Iran cannot be allowed to acquire a nuclear weapon and notes the talks in Oman on Saturday. He acknowledges that Tehran could be stringing the US along by delaying talks.
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