The US SOFR falls from its all-time high, with repo rates gradually declining

According to data from the Federal Reserve Bank of New York, the secured overnight financing rate (SOFR) reported 5.35% on the last trading day (July 2), equaling the previous day's 5.40%, tying the historical highs set on December 28, 2023, and January 2, 2024. Following the settlement of the U.S. Treasury auction activities at the end of the quarter and month, the financing market (repo rate) is normalizing. The effective federal funds rate on the last trading day reported 5.33%, the same as the previous day. After the release of the U.S. ISM non-manufacturing data at 22:00 Beijing time, there was a surge in buying demand for SOFR futures. Data on SOFR options flow indicates that the Federal Reserve may maintain a high policy rate level until 2025