FED: Semi-annual MPR Report Headlines
Jun-20 15:04
Fed Semi-annual Monetary Policy Report headlines, ahead of Chair Powell's testimony next week:
MonPol statements/characterisation of economy unsurprisingly in line with the rhetoric from Wednesday's decision
- "FED MONETARY POLICY REPORT: INFLATION ‘SOMEWHAT ELEVATED,’ JOB MARKET IN ‘SOLID SHAPE’" RTRS
- "FED REPORT: SOME EARLY SIGNS TARIFFS PUSHING UP INFLATION" RTRS
- "FED REPORT: STILL EARLY TO ASSESS TARIFF IMPACT ON ECONOMY" RTRS
- "FED REPORT: CURRENT FED POLICY ‘WELL POSITIONED’ FOR WHAT LIES AHEAD" RTRS
Headlines on financial stability/markets:
- "FED REPORT: FINANCIAL STABILITY ‘RESILIENT’ AMID ‘HEIGHTENED UNCERTAINTY’" RTRS
- "FED REPORT: IN EARLY APRIL, TREASURY MARKET FUNCTIONING REMAINED ORDERLY, BUT LIQUIDITY FELL TO LEVELS LAST SEEN IN EARLY 2023" RTRS
- "FED REPORT: LIQUIDITY ALSO MATERIALLY DETERIORATED IN EQUITY, CORPORATE BOND, AND MUNICIPAL BOND MARKETS" RTRS
- "FED REPORT: LIQUIDITY ACROSS MARKETS HAS IMPROVED SINCE, BUT CONDITIONS REMAIN RESPONSIVE TO NEWS ABOUT TRADE POLICY" RTRS
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US TSY FUTURES: BLOCK: Jun'25 30Y Ultra-Bond Buy
May-21 15:03
- +3,100 WNM5 114-28, through 114-26 post time offer at 1055:36ET, DV01 $560,000.
- The 30Y ultra Bond contract trades 114-27 last (-25).
GILTS: Away From Lows As Yield Levels Hold Oil Moves Lower
May-21 15:02
Gilts edge away from session lows after the aforementioned yield levels hold across the curve and in the U.S. long end.
- A downtick in crude oil provides some background support in more recent trade, while bounces in equities remain relatively limited.
- Today’s low in futures (90.39) protects key support at the April 9 low (89.99), contract last -51 at 90.62.
- A reminder that our latest positioning indicator points to very long positioning in gilt futures ahead of the roll, with the presence of Monday’s bank holiday skewing activity a little earlier in the cycle (first notice for M5 is May 29).
- Yields now 3.5-5.5bp higher, curve holds steeper.
- 2s10s stick within the multi-week range, 11bp below April cycle closing highs, last ~67bp.
- 5s30s in a similar pattern, also 11bp below cycle closing highs, last ~127bp.
- GBP STIRs remain off session extremes but are still more hawkish than levels that prevailed yesterday.
- SONIA futures flat to -5.0, while BoE-dated OIS shows ~36bp of cuts through year-end vs. a little over 40bp late yesterday.
- Public finance data, flash PMIs and BoEspeak from Pill, Breeden & Dhingra are due on Thursday.
US TSY FUTURES: BLOCK: Large Jun'25 10Y Ultra Bond Sale
May-21 15:00
- -20,000 UXYM5 111-19, sell through 111-20.5 post time bid at 1042:10ET, appr DV01 $1.8M.
- the 10Y ultra contract has since bounced to 111-21.5 last (-14)
