We don’t expect much impact on this, with Moody’s now in line with the other two agencies. Our current base case is that S&P and Fitch ratings hold. Execution risk is elevated, however.
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Mixed SOFR/Treasury options flow reported overnight, leaning towards downside put structures in the lead up to this morning's PPI data. Underlying futures modestly firmer but scaling off of early London session highs. Projected rate cuts through mid-2025 continue to retreat, current vs. late Friday levels* as follows: Jan'25 steady at -0.7bp, Mar'25 steady at -4.9bp, May'25 -9.0bp (-8.4bp), Jun'25 -16.5bp (-16.3bp), Jul'25 steady at -18.7bp.