FED: Trump Continues To Attack Powell And Fed More Broadly
Apr-17 18:03
- US President Trump has doubled down on his earlier Truth Social post that included: "Powell’s termination cannot come fast enough!"
- It goes against a Politico story earlier on Tsy Sec Bessent delivering private warnings to White House staff against attempts to fire Powell.
"*TRUMP: IF I WANT POWELL OUT, HE'LL BE OUT OF THERE
*TRUMP: I DONT THINK POWELL IS DOING THE JOB
*TRUMP: POWELL IS PLAYING POLITICS
*TRUMP: POWELL IS TERRIBLE
*TRUMP SAYS FEDERAL RESERVE 'ARE NOT VERY SMART PEOPLE
*TRUMP BLAMES FEDERAL RESERVE FOR INTEREST RATES" - bbg
- Chair Powell noted that "our independence is a matter of law" on Wednesday, when he was directly questioned on any political threats to his position. He also played down the impact (on the Fed) of the active Supreme Court case examining the ability of the President to remove people from independent agencies. Powell's term is scheduled to finish in May '26 whilst he would hold a governor role until 2028.
- The full Truth Social post from early US morning: "The ECB is expected to cut interest rates for the 7th time, and yet, “Too Late” Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete “mess!” Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!"
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OPTIONS: Euribor Unwind Amid Mixed Structures Tuesday
Mar-18 18:01
Tuesday's Europe rates/bond options flow included:
- ERJ5 97.87/97.9375cs, bought for 1.25 in 12k
- ERK5 97.6875/97.5625/97.4375p fly, bought for 1.75 in 6k
- ERM5 98.125/98.375 call spread vs 97.625 puts, 10K given at 1.75 vs. 97.785-97.79. Market contacts point to an unwind of an existing position
- 0RJ5 98.00/98.12cs vs 97.5625p, bought the cs for 1 in 5k
PIPELINE: Corporate Bond Update: $3.5B Volkswagen 6Pt Launched, 3Y SOFR Dropped
Mar-18 17:54
- Date $MM Issuer (Priced *, Launch #)
- 03/18 $3.5B #Volkswagen AM $550M 2Y +93, $300M 2Y SOFR+106, $1.1B 3Y +108, $500M 5Y +132, $500M 7Y +147, $550M 10Y +155
- 03/18 $3.5B #ING $750M 4NC3 +85, $750M 4NC3 SOFR+101, $1B 6NC5 +100, $1B 11NC10 +125
- 03/18 $2B *ADB 10Y SOFR+57
- 03/18 $1.1B #Xcel Energy $350M 3Y +85, $750M 10Y +135
- 03/18 $1B #Bangkok Bank 15NC10 +178
- 03/18 $850M #PacifiCorp 30NC5.25 7.375%
- 03/18 $562M #Chile Electricity 10.6Y +160
- 03/18 $500M #CNH Industrial Capital 3Y +87
- 03/18 $Benchmark Ford Motor 3Y +190, 3Y SOFR+203, 7Y +235
- 03/18 $Benchmark NatWest 3Y +78, 3Y SOFR+95, 5Y +95, 5Y SOFR+119
- 03/18 $Benchmark LG Energy 3Y, 5Y, 10Y investor calls
BONDS: EGBs-GILTS CASH CLOSE: German Twist Steepening As Fiscal Reform Confirmed
Mar-18 17:53
European curves steepened Tuesday, with short-end German instruments outperforming.
- Core FI fell to the session's weakest levels in morning trade as the two day rally in equities appeared to extend into a third.
- But the equity rally faded in the afternoon, with oil prices also fading, helping core FI fully recover (though also reversing earlier periphery / semi-core EGB spread tightening).
- The Bundestag approved the much anticipated German fiscal reforms including a loosening of the debt brake, though this appeared to have been well-anticipated as Bunds saw only limited and temporary weakness following the news.
- Comments by ECB's Rehn in an MNI Connect event suggested that there is a high bar to him not voting for a cut in April (markets still have it better than 50/50 implied). In data, the Eurozone trade surplus was slightly larger than expected in January, while German ZEW jumped to the highest in 3 years (corresponding to the DAX equity rally and above fiscal developments).
- The German curve twist steepened on the day, with yields down through the 10Y segment, while the UK's bear flattened through the 10Y segment (though 2s30s was higher). Periphery/semi-core spreads closed a little wider.
- We get final February Eurozone inflation data Wednesday, but the week's main events in Europe are in the UK Thursday with labour market data and the BoE decision.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 1.3bps at 2.176%, 5-Yr is down 1.2bps at 2.46%, 10-Yr is down 0.8bps at 2.81%, and 30-Yr is up 0.5bps at 3.121%.
- UK: The 2-Yr yield is up 0.8bps at 4.201%, 5-Yr is up 0.7bps at 4.295%, 10-Yr is up 0.5bps at 4.643%, and 30-Yr is up 1.1bps at 5.229%.
- Italian BTP spread up 0.8bps at 110.8bps / French OAT up 0.9bps at 68.3bps
