EMISSIONS: UKA COT: Funds Cut Longs, Firms Reduce Shorts
Dec-31 12:02
Investment funds raised net long positions in UK ETS futures on the ICE exchange edged down slightly...
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US TSYS: Bear Steeper On Japan Spillover, ISM Mfg Ahead
Dec-01 11:56
Treasuries trade bear steeper overnight primarily in spillover to JGBs under pressure on greater prospects of the BoJ hiking next month. The move also extends treasury losses seen during Friday’s particularly disrupted session with the sustained CME outage and early close.
- Cash yields are 0.5-4bp higher, with increases led by 20s and 30s.
- 5s30s are 109bps is back close to Nov 21 two-month highs that briefly cleared 110bps.
- TYH6 trades at 113-07+ (-04) on reasonable overnight volumes of 310k.
- It has shifted away from last week’s high of 113-22+ (Nov 25 high) in what’s seen as a corrective pullback, with support seen at 113-01 (20-day EMA).
- Data: S&P Global US mfg PMI Nov F (0945ET), ISM Mfg Nov (1000ET)
- Fedspeak: Fed Chair Powell gives brief remarks and is in a panel discussion (2000ET) – text and Q&A but within FOMC blackout and so won’t touch on the economic outlook or monetary policy.
- Bill issuance: US Tsy $86B 13W & $77B 26W bill auctions (1130ET)
- Politics: Trump signs Congressional bills (1600ET)
EGB OPTIONS: Bund ratio Put Spread
Dec-01 11:48
RXG6 128.5/127ps 1x1.5, bought for 32 and 32.5 in 2k.
STIR: Fed 25bp Cut Increasingly Priced For Dec, Trump Has Decided On Fed Pick
Dec-01 11:40
- Fed Funds implied rates are 1bp lower for next month’s meeting, continuing to move closer to fully pricing a rate cut as time goes by without a countering argument, with little change further out.
- Today’s docket is headlined by manufacturing ISM/PMI surveys, with the FOMC now in media blackout.
- Trump yesterday said he has decided on his pick for the next Fed Chair role and that “we’ll be announcing it”. Bloomberg sources last week reiterated NEC’s Hassett as a front-runner and he’s since seen a further boost in betting markets to now 72% on Polymarket vs in the 50s late last week.
- Cumulative cuts from 3.88% effective: 22bp Dec, 28bp Jan, 35.5bp Mar, 43bp Apr and 58.5bp Jun.
- SOFR futures are between -0.01 to +0.005 on, with the terminal implied yield still holding around the 3.00% mark. A reminder that the 2.96% on Nov 25 was its lowest close since days shortly ahead of the hawkish Oct 29 FOMC press conference.
