POWER: Poland October Power Falls

Core global bond contracts trade to fresh session highs on the back of the U.S. equity weakness detailed elsewhere, however, both moves have stalled a little since that update. Gilts maintain outperformance across the curve. 

• Stocks resume losses after the soft close on Tuesday, with the e-mini S&P making light work of any support into the overnight low at 6409.00. No specific headlines or newsflow to drive this move following the open - but some familiar themes are emerging after yesterday's soft close.
• As was the case in early trade Tuesday, communication services and technology stocks are leading losses thanks to outsized underperformance in a handful of names (of note, the S&P 500 ex-Magnificent 7 is flat-to-higher while the S&P 500 is slipping further into negative territory. As a result, the NASDAQ leads losses, and while the DJIA is softer, dips are much shallower at present.
• Reports and write-ups continue to point to varied newsflow (e.g. Deepseek's launch of a new online AI model yesterday), however the price action may be more consistent with markets looking to adopt a more neutral poise ahead of Jackson Hole and the September run of data - while stocks such as Palantir erase recent sharp rallies (stock had risen 20% in a matter of weeks).

• Fed rates have pared a modest dovish reaction to President Trump building on FHFA’s Pulte calling for Fed Governor Cook to resign, although latest weakness in equities is starting to see dovish momentum return.
• It leaves Fed Funds implied rates back near unchanged on the day, with 21.5bp of cuts for Sept before a cumulative 34.5bp for Oct and 54.5bp for Dec.
• The SOFR implied terminal yield of 3.08% (SFRH7) is 2bps lower on the day having closed the past three sessions between 3.10-3.11%. More broadly, it holds the +/-5bp of 125bp of cuts from current levels range seen since the Aug 1 payrolls report.
• Being a Board of Governors position, this would carry a permanent voting role, and Cook’s term specifically runs until 2038 so it would be a coveted position to be able to fill.
• The Board composition has already changed under the Trump administration, with Bowman switching from Governor to the Vice Chair for Supervision role (and vice versa for Barr). More recently, Kugler surprisingly resigned having missed the July decision ahead of her role expiring in Jan 2026 – Miran has been nominated as a short-term replacement.
• The MNI Jackson Hole/Minutes Preview will be published later this morning ET.