STIR: Short cover In The SOFR Whites Dominated After Waller's Dovish Comments

• RES 4: 112-02   Low Oct 14
• RES 3: 111-24   38.2% retrace of the Sep 11 - Nov 15 bear leg  
• RES 2: 111-04+/111-20+ 50-day EMA / High 6 and the bull trigger  
• RES 1: 110-17+ 20-day EMA
• PRICE:‌‌ 109-24+ @ 11:15 GMT Dec 18
• SUP 1: 109-17   Low Dec 17        
• SUP 2: 109-02+ Low Nov 15 and the bear trigger
• SUP 3: 109-00   Round number support    
• SUP 4: 108-28   1.236 proj of the Oct 1 - 14 - 16 price swing

A bearish short-term theme in Treasury futures remains intact despite yesterday’s bounce. 109-22, 76.4% of the Nov 15 - Dec 6 upleg, has been pierced. A continuation lower would expose 109-02+, the Nov 15 low and key support. It is still possible that the latest pullback is a correction. Initial resistance to watch is 110-17+, the 20-day EMA. A break of this average would highlight an early bullish development.

• Fed Funds implied rates are little changed overnight, with a 25bp cut today seen as locked in (24bp priced) but a subsequent 25bp cut only fully priced for the June FOMC.
• Cumulative cuts from 4.58% effective: 24bp Dec, 28bp Jan, 40bp Mar, 47bp May and 56bp June.
• Further out, the SOFR-implied terminal of ~3.85% (broadly 75bp of cuts including today’s) continues to point to a markedly shallower easing cycle than the 2.75-3% median dot in the September SEP.
• The median analyst sees the FOMC rate “dot” for 2025 upped by 25bp (i.e. one less cut) to 3.6%, with a range of opinions including unchanged at 3.4% and +50bp to 3.9%. Analysts are almost unanimous that the longer-run Dot will be raised from 2.9%, to either 3.0% or 3.1%.
• MNI Fed Preview: https://media.marketnews.com/Fed_Prev_Dec2024_With_Analysts_5b1eec4e36.pdf

Senate Majority Leader Chuck Schumer (D-NY) has dropped his bid to confirm 'anti-crypto' Democrat Caroline Crenshaw to serve another term on the Securities and Exchange Commission, leaving the position open for Republicans to fill in the next Congress. 

• Axios reports that, according to sources, Senate Banking Committee Chair Sherrod Brown (D-OH) believes “there is not a path to getting her a floor vote at the end of this year” noting that outgoing centrist Senators Joe Manchin (I-WV) and Kyrsten Sinema (I-AZ) were expected to block the nomination, as they did last week on a vote to assure two more years of Democrat control on the National Labor Relations Board.
• The move comes after weeks of lobbying from the crypto sector, seen as one of the biggest winners in Washington at November’s presidential election. Emilie Choi, president of Coinbase, wrote on X: “Caroline Crenshaw is anti-crypto. She even embarrassingly opposed Bitcoin ETFs. The SEC has to change.”
• FX Street notes that Crenshaw “has aligned closely with SEC Chair Gary Gensler on regulatory matters,” but “is regarded as even more anti-crypto than Gensler, particularly due to her opposition to crypto policies...”
• Crenshaw’s exit from the panel, along with the resignation of Chair Gary Gensler, is likely to leave the Democratic Party with only one commissioner on the five-member panel. Trump has nominated financial services adviser, Paul Atkins, to lead the SEC, with analysts expecting Atkins to undo many of the climate and social regulations and proposals brought by Gensler.