US: Thune Eyes New Shutdown Strategy To Ramp Up Pressure On Democrats

Oct-23 13:14

At 12:15 ET 17:15 BST, Senate Majority Leader John Thune (R-SD) will jam Democrats with a bill introduced by Senator Ron Johnson (R-WI) to pay troops and some federal workers during the government shutdown. Democrats are expected to block the bill, believing it gives President Donald Trump and OMB Director Russ Vought too much authority over federal worker pay. 

  • Thune has also prepped a vote, likely to take place next week, on legislation from Senator Ted Cruz (R-TX) that would pay TSA employees and air traffic controllers. And there is another pending troop pay bill, introduced by Senator Dan Sullivan (R-AK). Thune’s strategy is to put Democrats on the record voting against both reopening the government via a CR and paying troops via supplemental funding.
  • Senators Rand Paul (R-KY) and Gary Peters (D-MI) will host a bipartisan lunch at 12:30 ET 17:30 BST today, providing a rare opportunity for rank-and-file senators to discuss a bipartisan solution.
  • Democrats believe the shutdown can only be resolved if Trump inserts himself into negotiations, with Senate Minority Leader Chuck Schumer (D-NY) gambling that Trump sees a political imperative in striking a deal on Obamacare subsidies.
  • Trump told reporters yesterday he would not speak with Democrats until they vote to reopen the government, the official party line from Congressional GOP leadership. 
  • According to Polymarket, there is a roughly 40% implied probability that the shutdown will extend to November 16. The next key date is November 1, when SNAP funding dries up and open enrollment begins for health-care plans.

Historical bullets

EURIBOR: ESTR/ERZ5 spread is at a 3 Months low

Sep-23 13:11
  • Euribor sees most of the front Month Volume related to ESTR/ERZ5 spreads today, helps explain the better elevated Volume in the Front Month.
  • The spread has traded in close to 30k Total, the printed low of 11.50 was also its lowest level in nearly three Months, since 30th June, but now trades at 11.75.

FED FUNDS FUTURES: Volume Sale Sep'25 FF

Sep-23 13:06
  • -90,000 FFU5 95.7775 (+0.00) last few minutes, total volume just under 250k.
  • The lead Sep'25 quarterly contract expires September 30

STIR: Effective Fed Funds Rate

Sep-23 13:01

FRBNY EFFR for prior session:

  • Daily Effective Fed Funds Rate: 4.09% (+0.01), volume: $93B
  • Daily Overnight Bank Funding Rate: 4.09% (+0.01), volume: $195B