US TSY OPTIONS: 10Y Vol Calendar, Weekly 10- & 30Y Update

Senate Majority Leader John Thune (R-SD) has followed House Speaker Mike Johnson (R-LA) in pledging to keep lawmakers in Washington, DC, through the weekend as Congress looks for a solution to the standoff over reauthorising Section 702 (FISA). The warrantless foreign surveillance power is set to go dark on Friday. 

• The most obvious route to resolving the standoff is for the White House to issue a statement confirming that President Trump has abandoned plans to nominate Federal Housing Director Bill Pulte as Director of National Intelligence. House Speaker Mike Johnson (R-LA) entered the White House a short time ago for a meeting with Trump to discuss the issue.
• Thune told reporters he is unsure if the White House will make a move today to end the standoff: “Somehow the White House is gonna have to figure something out that gets the Democrats back at the table.” He added, referring to a new DNI nominee, “I just don’t know the timing of when it happens."
• Thune continued, “We’ll see if that happens in the near term or if it’s something we have to wait on, but we’ve got til midnight Friday to keep the program going.” He confirmed that he'd keep senators in DC through the weekend “if it looks like there’s a potential solution in the offing.”
• Andrew Desiderio at Punchbowl News reports on X, "Even if Thune secures enough Dem votes today for FISA, he’d still need to get a time agreement to pass a 702 reauthorization by Friday night (requires unanimous consent)." Desiderio notes that Senator Ron Wyden (D-OR) is unlikely to provide unanimous consent.

• While rates may not be reacting to earlier IDF headlines negatively (re: prepared to return, strike Iran again) - risk sentiment in stocks has certainly evaporated whether related to the geo-pol headlines or not.
• Equity indexes are back to early May levels with the DJIA -0.62%, SPX emini -1.16%, the tech-heavy Nasdaq -2%.
• IT and Energy sector shares are leading declines ahead midday, AI-infrastructure demand cooling as Coherent Corp trades -11.6%, followed by Lumentum Holdings, QUALCOMM, Super Micro Computer, Corning and ServiceNow - all down 6.75-7.75%.
• The Energy sector is weighed down by oil and gas shares as crude prices retreat (WTI -3.75 at %87.55/bbl): APA Corp, Valero Energy, Halliburton Co, SLB Ltd and Devon Energy Corp trade -2.5-3.5%.
• On the positive side, estate management shares buoyed the Real Estate sector: with CBRE Group +2.2%, CoStar Group +1.32% at the moment.

• Today’s 0.2% selloff for EURGBP has edged us closer to a key support point for the cross at 0.8610, a collection of daily lows from earlier this year. Clearance of this level would highlight an important medium-term bearish breakout.
• One additional aspect that could prove supportive over the coming sessions is a notably large expiry at 0.8650 on Thursday, where 1.12bn of options are set to roll off. This comes shortly after the ECB rate decision, where the GC is expected to deliver a 25bp rate hike. With a US-Iran ceasefire agreement still elusive, the primary message from speakers has shifted from not pushing back on market pricing, to more explicitly endorsing such a move.
• The focus will then swiftly turn to the following Thursday, where both the BOE and Makerfield By-Election are scheduled. This will keep a lot of attention on UK assets as markets assess both the extent to which the BOE could tighten policy ahead and the potential fiscal consequences of the by-election outcome.
• BBVA maintain their buy-on-dips approach for EURGBP, anticipating renewed short-term sterling weakness, with a potential return to the 0.8750 area seen in late March/early April. Separately, Rabobank continue to favour a slow grind higher in EURGBP to 0.89 on a 9-12 month view.