Electric Shock Therapy for Dr Copper
July 9, 2025
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–Light volume day Tuesday. Yields were up 1.0 to 2.5 bps across the curve. Every SOFR contract from SFRH6 to SFRU8 settled -2.5. Copper was the big mover, up to a new all-time-high on the COMEX due to the latest tariff threats. HGU5 settled 5.6855, +0.6595 on the day. Still talking about Epstein? They use copper in Teslas right?
–FFQ5 settled 9568.5, just 1.5 bps away from the current EFFR of 4.33%. Little chance of an ease at the July FOMC. The next year out, FFQ6 settled 9668.0, 99.5 bps lower in yield. SFRU5/Z5 3m calendar is -28.0 (9585.5/9613.5). Powell’s term ends in May and there’s been some speculation that BIG CUTS would be the first order of business for a new Chair, but SFRH6/M6 is -22.0 (9638/9660).
–Ten year auction re-open and FOMC minutes today. Old data, but yesterday afternoon’s consumer credit report was weak. Revolving credit (credit cards) decreased at an annual rate of 3.2%. Non-revolving (cars, school loans) increased at annual rate of 2.8%. Probably some ‘beat-the-tariff’ buys for cars. Manheim released the Wholesale Used Car Price Index yesterday. On a seasonally adjusted basis, prices rose 6.3% yoy, a 1.6% rise above May levels. “The non-adjusted price in June decreased 1.1% compared to May, which now makes the unadjusted average price higher by 5.1% year over year.”
