MEXICO: US Lawmakers Already Call for Closer US-Mexico Relationship
* After the close yesterday, US lawmakers reportedly held meetings with Sheinbaum, following which...
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
LOOK AHEAD: Wednesday Data Calendar: June ADP Employment, Challenger Job Cuts
- US Data/Speaker Calendar (prior, estimate)
- 07/02 0700 MBA Mortgage Applications (1.1%, --)
- 07/02 0730 Challenger Job Cuts YoY (47.0%, --)
- 07/02 0815 ADP Employment Change (37k, 98k)
- 07/02 1130 US Tsy $65B 17W bill auctions
- Source: Bloomberg Finance L.P. / MNI
STIR: US Rates Consolidate JOLTS-Driven Shift Off Dovish Lows
- Fed Funds implied rates are up to 1bp higher on the day for 2025 meetings, at the top end of yesterday’s range after a strong JOLTS report helped extend a rates sell-off.
- President Trump has threatened Japan with tariffs of up to 35%, doubting whether the US will make a deal with Japan before the July 8 deadline.
- Cumulative cuts from 4.33% effective: 5bp Jul, 28bp Sep, 44.5bp Oct, 63.5bp Dec, 74bp Jan and 87bp Mar.
- The SOFR implied terminal yield of 3.115% (SFRZ6) is 1.5bp higher after yesterday’s 7bp lift off levels that had started to near lows since before the Presidential election in November.
- That’s a little under fully pricing 125bp of cuts from here by end-2026 compared to the 100bp of cuts envisaged by the median FOMC dot for end-2027 (including 75bp of cuts by end-2026).
- There’s no Fedspeak scheduled today, whilst data is mostly labor market focused with Challenger Job cuts (1230ET) and ADP employment (1315ET) for June.
SOFR: Mix Of Short Setting & Long Cover Seen In SOFR Futures On Tuesday
OI data points to a mix of net short setting and long cover through the SOFR blues on Tuesday, with JOLTS data and another firm reading for the prices paid component within the ISM manufacturing survey driving a hawkish repricing in the short end.
- The most meaningful adjustments came via net short setting in 3 of the 4 white contracts.
| 01-Jul-25 | 30-Jun-25 | Daily OI Change |
| Daily OI Change In Packs |
SFRM5 | 1,323,659 | 1,299,447 | +24,212 | Whites | +50,316 |
SFRU5 | 1,137,980 | 1,123,994 | +13,986 | Reds | -10,377 |
SFRZ5 | 1,266,096 | 1,273,285 | -7,189 | Greens | +7,569 |
SFRH6 | 982,151 | 962,844 | +19,307 | Blues | -6,023 |
SFRM6 | 870,329 | 861,826 | +8,503 |
|
|
SFRU6 | 829,539 | 832,446 | -2,907 |
|
|
SFRZ6 | 940,377 | 956,058 | -15,681 |
|
|
SFRH7 | 706,290 | 706,582 | -292 |
|
|
SFRM7 | 649,700 | 647,534 | +2,166 |
|
|
SFRU7 | 455,723 | 454,869 | +854 |
|
|
SFRZ7 | 409,837 | 410,377 | -540 |
|
|
SFRH8 | 310,797 | 305,708 | +5,089 |
|
|
SFRM8 | 230,270 | 233,200 | -2,930 |
|
|
SFRU8 | 204,922 | 205,032 | -110 |
|
|
SFRZ8 | 185,378 | 188,924 | -3,546 |
|
|
SFRH9 | 138,709 | 138,146 | +563 |
|
|
