Bond futures contracts for the 10-year Treasury slipped 0.4% after stronger-than-expected retail sales data. This move reflects reduced expectations for near-term economic slowdown, but hedging activity in Eurodollar futures remains consistent. The lone Republican on Commissioners Court reported the largest share of money raised from people and organizations who do business with the county of any other court member, at 97% of his high-dollar donations. But at just about $74,000 raised during the six-month period, Ramsey raised the least money of any commissioner. There is an inverse relationship between the size of a funding rate shock and the basis response ( Chart 4 ). Even with a full three-month horizon, it would take a 40- to 50-basis-point increase in repo rates to induce a roughly 3-tick move in the basis (futures market convention is to measure price changes in ticks or 1/32nds of a point, making 3 ticks the equivalent of approximately 10 basis points of the notional amount). Bond futures contracts pricing incorporates a 45% probability of a dual Fed cut within the next six months, based on Bloomberg SWAPS model projections.
