MNI: Fed: Policy Well Positioned To Respond To Risks

CANADA JUNE JOBS -1.4K VS FORECAST +20K, PRIOR +26.7K

MNI China Daily Summary: Friday, July 5

MNI BRIEF: PBOC Plans To Borrow Hundred Bln Yuan CGB - Press

MNI: PBOC Net Drains CNY48 Bln Via OMO Fri; Rates Unchanged

MNI: PBOC Sets Yuan Parity Lower At 7.1289 Fri; -0.35% Y/Y

MNI: BAKER HUGHES US RIG COUNT 585; OIL RIGS 479; GAS RIGS 101

EZ/UK T-Bill Calendar: Germany, France to Issue Bills Monday

EZ/UK Bond Supply Calendar: EU/UK Syndications Due Next Week

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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Fed Gov Waller Supports Hawkish Fed Pivot

US TSYS
Tsys finished mixed Friday, just off week highs tapped by midmorning. Yield curves unwound a fair portion of Thu's steepening (5s30s -4.5 to appr 64.0) as rate support quickly evaporated on Fed Gov Waller comments in the second half. US$ index finished strong (DXY +.559, 96.601), stocks weaker (ESH2 -33.0 at 4626.0); crude weaker (WTI -1.71 at 70.67 after dip below 70.0).
  • No data, but NY Fed Pres Williams CNBC interview held market interest early, followed by Fed Gov Waller economic outlook speech to Forecasters Club in NY and SF Fed Pres Daly on live WSJ event, both at 1300ET. SF Fed Daly (non-voter 2022) a non-event, but comments from Gov Waller weighed as he aggressively supported the 2x taper pace/asset buying ending in March calling March a live event for a hike.
  • Rates were back to opening levels after Gov Waller posited balance-sheet run-off by summer of 2022 "WOULD ALSO HELP REMOVE ACCOMMODATION, REDUCING THE NEED FOR ADDITIONAL RATE HIKES" Rtrs.
  • Short end rates traded lower in turn, TYH2 mildly higher, well off first half levels (10YY 1.3699% low). Two-way trade, positioning from prop and fast$ accts ahead weekend and next week's Christmas holiday.
  • NY Fed reverse repo usage climbs to third consecutive all-time high of $1,704.586B from 77 counterparties vs. Wednesday's $1,657.626B.
  • The 2-Yr yield is up 2.7bps at 0.6396%, 5-Yr is up 1.1bps at 1.1749%, 10-Yr is down 0.9bps at 1.4021%, and 30-Yr is down 3.7bps at 1.8159%.
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