US: Schumer Maintains A Bipartisan Bill Is Required To Avert Oct 1 Govt Shutdown
Sep-17 15:07
Senate Minority Leader Chuck Schumer (D-NY) reiterated in an interview that Republicans must negotiate a bipartisan government funding solution to avert a government shutdown on October 1. His comments come after House Republican leadership unveiled a 'clean' stopgap funding measure yesterday that fails to include any Democratic demands on healthcare.
- Schumer said, when asked if he sees any route to avoiding a shutdown, "I hope [Republicans] would avoid a shutdown. They're on the path to causing it..." Schumer says, on the way to avoid it, "we have two weeks. Let's sit down and talk. Let's have input from both sides and come up with a bipartisan bill that can pass and avoid a shutdown."
- Schumer adds, "the data shows that the American people are on our side... 59% believe [Trump] would cause a shutdown and when you ask them why, it's because they won't negotiate."
- Schumer is expected to release an alternate funding plan in the coming days that includes a permanent extension of the Obamacare enhanced premium tax credits. That proposal is DOA with Republicans, but could provide Democrats a credible justification for pushing a shutdown, particularly as Medicaid cuts will figure prominently in 2026 midterm election campaigning.
- The implied probability of a shutdown ticked up slightly in the last few hours, to just under 40%. Bettors likely believe that the required seven Republican Senators will ultimately fold when the House bill reaches the upper chamber.
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US TSY OPTIONS: Large Sep'25 10Y Call Buy
Aug-18 15:05
- +40,000 TYU5 112.5 calls, 2, total volume over 52,700, open interest at 163,678 coming into the session.
- Sep'25 options expire Friday
FOREX: Greenback Pops Into WMR Fix on Volume Spike, Rising Curve
Aug-18 14:58
- Greenback picking up into the WMR fix, helping trigger fresh daily lows across EUR/USD, GBP/USD and new daily highs for USD/CAD and USD/JPY.
- USD strength being driven partly by the run higher in the US curve - but also a sizeable uptick in EUR futures at 1047ET/1547BST. ~1000 contracts traded inside two minutes for a cash equivalent of ~$150mln. While the last few minutes have seen activity pick up, overall volumes on the day are very low: EUR futures are close to 30% below average for this time of day.
- While the USD's benefiting from the higher US curve, it's the opposite for GBP. Which is slipping despite a further backtrack in BOE rate cut pricing for 2025 (year-end implied rates now ~3.85%, or pricing just 12bps of rate cuts over the next three meetings).
- No specific headlines or newsflow behind the USD rally in recent trade - with low volumes and light liquidity the suspected driver. We mentioned earlier today the preference for markets to adopt a more neutral setting into Jackson Hole on Friday - evident in last week's CFTC data showing the net short trimmed off multi-year lows.
UK DMO UPDATE: Consultation agenda
Aug-18 14:44
The DMO has released the agenda for the consultation to be held Tuesday next week ahead of the release of the Oct-Dec auction calendar (on Friday 29 August at 7:30BST).
- Syndications: A new conventional 15-year gilt in October and a linker (new or existing) in November.
- The DMO has also raised the possibility of dual-tranche syndications (which are not currently held). These are not planned for FQ3, but could be introduced in the future.
- Short auctions (6 auctions): Launch and reopen at least once both a new 3-year gilt and new 5-year gilt.
- Medium auctions (4 auctions): The new 10-year Oct-35 gilt (which will be launched via syndication in the W/C 1 September) to be reopened at least twice in the quarter. The DMO is also welcoming views on a new 7-year gilt.
- Long auctions (2 auctions): Including a reopening of the
- Linker auctions (4 auctions): All existing.
- PGTs (5): 1 short, 1 medium, 1 linker and 2 other conventional (without maturity guidance).
- The next consultation will be held on Monday 24 November, subject to the timing of the Budget.
