FED: Warsh's Five Reform Task Forces Include Academic, Private Sector Names
Jul-09 19:10
The Fed has announced details of the 5 task forces announced by Chair Warsh at the June FOMC meeting, with some well-known names on the roster (link here)
- The leaders of the five task forces, and their objectives, are below. There was no timeline provided for them to reach their findings though Warsh has indicated that we could get some results by year-end (in June's press conference he said "I think it’ll depend on the task force and also depends on the urgency in which we need clear answers. My expectation—I’m still in the business of recruiting and finalizing them—my expectation is the task forces will begin work in the next couple of weeks, and we’ll start to get some more information from them, some more framing of how they see things starting in the fall, and hopefully most, if not all of them, concluding by year-end").
- Communications: Review how the Federal Reserve conveys policy deliberations and decisions amid uncertainty.
- Peter R. Fisher, professor of practice, Foster School of Business, University of Washington
- Arminio Fraga, founder and chairman, Gávea Investimentos; former president, Central Bank of Brazil
- Mervyn King, former governor, Bank of England
- Balance Sheet Policy: Examine the costs, benefits, and institutional implications of the Federal Reserve's current balance sheet regime.
- Karen Dynan, professor of economics, Harvard University
- Raghuram Rajan, professor of finance, University of Chicago Booth School of Business; former governor, Reserve Bank of India
- Jeremy Stein, professor of economics, Harvard University; former governor, Federal Reserve Board
- Data: Improve the quality and timeliness of real economic signals that inform the Federal Reserve's policy judgments.
- Raj Chetty, professor of economics, Harvard University
- Doug McMillon, former president and CEO, Walmart Inc.
- Kevin Murphy, professor of economics, University of Chicago
- Productivity and Jobs: Assess the economic impact of new general-purpose technologies, including artificial intelligence, to inform the Federal Reserve's policy judgments.
- Marc Andreessen, cofounder and general partner, Andreessen Horowitz
- Charles I. Jones, professor of economics, Stanford University, currently on leave at Anthropic
- Asha Sharma, executive vice president and XBOX CEO, Microsoft Corp.
- Inflation Frameworks: Revisit how the Federal Reserve understands and responds to the drivers of inflation.
- Greg Mankiw, professor of economics, Harvard University; former chairman, Council of Economic Advisers
- Thomas Sargent, professor of economics, New York University; Nobel laureate
- William White, senior fellow, C.D. Howe Institute; former economic adviser, Bank for International Settlements
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US TSYS: Late SOFR/Treasury Option Roundup
Jun-09 19:01
SOFR & Treasury options trade outlined below: flow mixed overall after leaning toward upside SOFR & Tsy call structures. Underlying futures modestly higher - near early Monday highs. Projected rate pricing (hike) looks steady to mildly cooler vs late Monday levels (*) with Dec still projected first 25bp hike: Jun'26 at +.7bp (+.7bp), Jul'26 at +3.9bp (+3.9bp), Sep'26 at +11.5bp (+13bp), Oct'26 at +16.4bp (+17.9bp), Dec'26 +25.5bp (+27.6bp).
- SOFR Options:
- +5,000 SFRQ6 96.18/96.31/96.37 put flys 1.25
- +4,000 SFRU6 95.87/95.93/96.31/96.37 call condors 4.5
- +2,500 SFRZ6 96.00/96.12/96.25 call flys, 1.0
- +10,000 2QM6 96.00 puts, 2.0 vs. 96.06/0.24%
- 7,500 SFRU6 96.25 puts, 12.25
- +8,000 SFRH7 96.25/96.875 2x1 put spds, 9.75 vs. 95.95/0.26%
- +4,000 SFRZ6 95.87/96.00/96.12 put trees, 1.5 ref 96.05
- +4,000 0QN6 96.00/96.12/96.19 call trees, 0.5
- over 30,000 SFRU6 96.06/96.18/96.31/96.43 put condors
- 1,000 SFRU6 96.12/96.25/96.37/96.50 put condors ref 96.20
- 1,400 SFRU6 96.00/96.50 strangles, ref 96.20
- 3,700 SFRU6 96.25/96.31/96.37 call trees, 0.0 ref 96.20
- 4,700 SFRZ6 96.25/96.37/96.43 broken call trees ref 96.045
- +8,000 SFRZ6 96.18/96.25/96.37/96.43 call condors, 2.0 ref 96.045 to -.04
- 1,000 SFRU6 95.93/96.06/96.18 1x3x2 put flys, .75 ref 96.19
- 2,500 SFRZ6 96.31/96.43/96.56 call flys ref 96.02
- Treasury Options:
- 5,000 TYU6 114.5 calls, 5 ref 109-02.5
- 6,000 TYQ6 109 puts, 46 ref 109-04
- +9,900 TUQ6 103.5 calls, 5
- +6,500 TYN6 109.25/110 1x2 call spds, 7 ref 109-05.5
- +13,000 USN6 110 puts, 20 ref 111-21
- +55,000 TYN6 110 calls, 10 ref 109-05 to -04.5 (adds to some +75k yesterday, OI +26.5k)
- 4,000 TUN6 103.12/103.37 2,3 call spds ref 103-00.75
- 9,700 TYN6 109.5/110/111 broken call flys, 3 net ref 109-03.5
- 5,200 Wed wkly TY 108.75 puts, 4 ref 109-02 to -02.5, exp tomorrow
- -4,000 TYN6 109/110.5 1x2 call spds, 23 ref 109-02/0.40%
- Block, 5,000 TYN6 110/110.25 call spds, 3 ref 109-02
- -2,000 FVN6 106.25 puts, 11.5 vs. 106-22.25/0.08%
- 1,500 wk3 TY 108.75/109.5 2x5 call spds, 11 net (exp 6/18)
- -3,000 wk2 TY 109.25 calls, 10
- 7,100 TYN6 111.5/112 call spds vs. 3,550 113.5 calls, 0.0 net
EURJPY TECHS: Pullback Appears Corrective
Jun-09 19:00
- RES 4: 187.95 High Apr 17 and the bull trigger
- RES 3: 187.56 High Apr 30
- RES 2: 186.56 76.4% retracement of the Apr 17 - May 6 bear leg
- RES 1: 186.21 High Jun 5
- PRICE: 185.18 @ 16:52 BST Jun 9
- SUP 1: 184.01 Low Jun 8
- SUP 2: 183.50 Low May 07
- SUP 3: 182.05 Low May 06 and a bear trigger
- SUP 4: 181.87 Low Mar 16
The short-term trend needle in EURJPY continues to point north and recent gains appear corrective for now. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. A resumption of gains would open 186.56, a Fibonacci retracement. Key support lies at 182.05, the May 6 low. Clearance of this level would highlight an important bearish development. Initial firm support to watch is 184.01, Monday’s low.
US STOCKS: Late Equities Roundup: Off Lows Amid Geo-Pol Headline Driven Vol
Jun-09 18:42
- Equities are mixed late Tuesday, off midday lows after some sharp geo-political related headline volatility. Though well ahead of month end positioning - June quarterly index rebalancing was also cited as a potential factor behind equity indexes retreating to early May levels before rebounding in late trade: the DJIA +.11%, SPX emini -0.45%, Nasdaq -1.1%.
- Risk sentiment for stocks evaporated after earlier IDF headlines (re: prepared to return, strike Iran again) and again after Trump posted the need to respond militarily to the downing of a US attack helicopter near the Strait of Hormuz.
- Striking a more realistic tone, Anadolu wrote: "Reaching agreement to end war between US and Iran within next few days is 'unlikely' due to ongoing 'complex situation,' Pakistani government sources told Anadolu. Sources cite Israel’s 'non-stop' ceasefire violations in southern Lebanon".
- IT and Energy sector shares continued to lead late session declines, AI-infrastructure demand cooling as Coherent Corp trades -11.2%, followed by Lumentum Holdings, QUALCOMM, Super Micro Computer, Corning and ServiceNow - all down 7.5-9.0%.
- The Energy sector is weighed down by oil and gas shares as crude prices retreat (WTI -3.25 at $88.05/bbl): APA Corp, Valero Energy, Halliburton Co, SLB Ltd and Devon Energy Corp trade -2.5-4.0%.
- On the positive side, estate management shares buoyed the Real Estate sector: with CBRE Group +3.9%, CoStar Group +1.7% at the moment.
