Market Recap 2/15/2019

  1. China:
    US-China tase talks appear to have ended on a hopeful note according to press reports this morning and the negotiation set to continue next week in Washington
    Negotiations have discussed the possibility of removing Washington’a 10% tariffs on $200b worth if Chinese import (while leaving in place the 25% tariff on $50 billion worth of import)
    Similar base case exit for all tariff (10% on 25b) with US promising to remove them gradually over the course of 6 months pending Chinese compliance with the deal.
  1. FOMC:
    FOMC dropped any bias towards hiking rates and added the work “patient”
    Fed fund expectation re-priced after FOMC minutes, not only removing any hints of a potential hike but also putting a significant chance of rate cut by year end
  1. SOFR
    SOFR future liquidity.
    Since trading inception in May 2017, traded volumes have been increasing for SOFR futures.
    Market depth decrease over the second half of 2018 but has been increasing over 2019

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