TARIFFS: Supreme Court Won't Decide Trump Tariffs Case Today
SCOTUS will not decide tariffs today - per SCOTUSblog "We have one and only one opinion today. It is...
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CAD: USDCAD Holds Bulk of BoC Rally
The rally in USDCAD on the back of the BoC decision largely holds. Spot rallied to touch 1.3872 before partially fading the move but holding gains of ~0.1% on the day, with markets partially retracing some of the hawkish shifts in rate expectations evident over the past few sessions.
- While the decision was unchanged - as expected - the bank clearly remain concerned over economic certainty into next year, with the statement language retaining various references to uncertainty, a "subdued" labour market and likely weak Q4 growth.
- The Bank have effectively looked through the upside surprise in GDP growth, which they acknowledge as "surprisingly strong" but still see Q4 growth to "likely be weak." Cautious language similarly retained on the labour market - as they point to economy-wide hiring intentions remaining "subdued".
- In addition, the bank retain their broad CPI outlook, with underlying inflation remaining around 2.5%, and see the currency policy rate "at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment."
SONIA: Net Short Cover Dominated In Front End Of Futures Strip On Tuesday
OI data points to net short cover in 11 of the front 12 contracts during Tuesday’s uptick in SONIA futures, before net long setting came to the fore in blues.
- A reminder that net long cover dominated during Monday’s move lower in futures.
- Further hawkish repricing in the EUR short end has provided fresh spillover selling pressure today.
| 09-Dec-25 | 08-Dec-25 | Daily OI Change |
| Daily OI Change In Packs |
SFIU5 | 457,844 | 458,064 | -220 | Whites | -4,597 |
SFIZ5 | 445,521 | 440,648 | +4,873 | Reds | -22,053 |
SFIH6 | 374,999 | 378,531 | -3,532 | Greens | -16,644 |
SFIM6 | 388,178 | 393,896 | -5,718 | Blues | +3,641 |
SFIU6 | 362,154 | 369,687 | -7,533 |
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SFIZ6 | 543,484 | 548,759 | -5,275 |
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SFIH7 | 312,427 | 317,019 | -4,592 |
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SFIM7 | 232,663 | 237,316 | -4,653 |
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SFIU7 | 159,888 | 161,603 | -1,715 |
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SFIZ7 | 141,481 | 149,074 | -7,593 |
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SFIH8 | 81,904 | 85,743 | -3,839 |
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SFIM8 | 66,914 | 70,411 | -3,497 |
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SFIU8 | 57,704 | 55,825 | +1,879 |
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SFIZ8 | 33,883 | 33,880 | +3 |
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SFIH9 | 18,988 | 18,813 | +175 |
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SFIM9 | 25,800 | 24,216 | +1,584 |
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US TSYS: Post-BOC React
- Treasury futures reverse course to mildly higher after the BOC holds rate steady, no significant deviations from expectations. "If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2%."
- Currently steady (TYH6) to mildly higher - near early overnight highs: TYH6 trades steady at 112-03 on moderate volumes (617k), curves mixed: 2s10s +.658 at 57.558, 5s30s -.550 at 101.229.
- Focus turns to this afternoon's FOMC & forward projections at 1400ET, Chairman Powell presser at 1430ET. Inter-meeting communications reinforced that the FOMC is finely split between those who would ease further and those who are resistant - if not outright opposed - to providing further accommodation.
