FED: Powell To Deliver Semi-Annual Testimony Jun 24
Fed Chair Powell is scheduled to deliver Semi-Annual Monetary Policy testimony before the House Financial Services Committee on Tuesday June 24 at 1000ET.
- Based on previous testimonies, this likely means the Semi-Annual Monetary Policy Report prepared by the Fed will be released on Friday Jun 20, with the hearing before the U.S. Senate Committee on Banking, Housing, and Urban Affairs likely on Wednesday June 25.
- The House appearance will be is less than a week after the June FOMC decision / press conference / quarterly projections on June 18, so it's unclear whether we will get any new revelations from Powell in Congress that haven't already been covered, but we wouldn't be surprised to see Powell pressed relatively more aggressively by congressional representatives on fiscal issues.
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US: FED Reverse Repo Operation
RRP usage climbs to $137.951B this afternoon from $114.114B yesterday. 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. The number of counterparties at 42.
STIR: Fed Rate Path Climb Tempered By Trade Headlines
- Fed Funds implied rates have pared some of their sharp shift higher when Bloomberg first reported that US Tsy Sec Bessent said at a closed-door investor summit that he sees de-escalation with China whilst the current situation is unsustainable.
- The trimming of the day’s increase has come with subsequent headlines from Reuters re it likely to be a “slog” and Politico reporting the US is close on Japan and India trade agreements but with details suggesting less progress.
- Going against the trimming somewhat, a modest tail in the 2Y Tsy auction at 1300ET.
- Cumulative cuts from 4.33% effective: 3bp May, 18bp Jun, 39bp Jul, 58bp Sep and 89bp Dec.
- SOFR implied yields currently see largest increases in the M6 (+8bp), whilst the terminal remains in the U6 as it climbs to 3.15% (+7.5bp) for almost one additional 25bp cut priced vs pre-Liberation Day levels.
- Today’s Fedspeak from Vice Chair Jefferson (permanent voter) and Harker (retiring June) hasn’t moved markets, seemingly taking a deliberately non-confrontational approach amidst Trump’s latest demands for lower rates. Still to come today:
- 1340ET - Kashkari ('26 voter) at Chamber of Commerce Global Summit (Q&A only)
- 1430ET - Barkin (non-voter) fireside chat at innovation summit (Q&A only)
- 1800ET - Gov. Kugler (permanent voter) on monetary policy transmission (text + Q&A). She said Apr 7 that inflation was now the more pressing issue with regards to tariffs and that the Fed needs to make sure it doesn't rise. She warned the tariff impact should be consequential.
GBPUSD TECHS: Northbound
- RES 4: 1.3550 High Feb 24 ‘22
- RES 3: 1.3500 Round number resistance
- RES 2: 1.3434 High Sep 26 ‘24 and a key resistance
- RES 1: 1.3424 High Apr 22
- PRICE: 1.3378 @ 16:16 BST Apr 22
- SUP 1: 1.3260/3207 Low Apr 21 / High Apr 3 1
- SUP 2: 1.3075 20-day EMA
- SUP 3: 1.2907 50-day EMA
- SUP 4: 1.2807 Low Apr 10
The trend direction in GBPUSD remains up and Monday’s rally reinforces current conditions. The pair has recently breached key resistance at 1.3207, the Apr 3 high and a bull trigger. This highlights a resumption of the medium-term uptrend. Note that moving average studies are in a bull-mode position, signalling a dominant uptrend. Sights are on 1.3434 next, the Sep 26 ‘24 high. Support to watch is 1.3075, the 20-day EMA.
