BUNDS: A few ticks lower for Bund post US Data

BoE-dated OIS now fully discounts 50bp of easing through year-end for the first time since May 13 (the day of the prior UK labour market report). 

• The 50bp of easing priced through December compares to 48bp priced mid-London morning and ~41bp priced late yesterday.
• Today's move has been driven by the latest labour market data, with our macro team noting plenty of dovish details under the hood. That will be summarised in our full data review later today.

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• President Donald Trump will deliver remarks today at a military event in Fort Bragg, North Carolina.
• Trump escalated his rhetoric toward California’s Democratic leaders, doubled the number of National Guard troops deployed in the state to quell unrest to 4000, and directed a battalion of US Marines to complement the National Guard.
• Defense Secretary Pete Hegseth will deliver his first testimony to Congress since his confirmation. He will be grilled by Democrats over the Trump administration’s strategy in California and the 'Signal scandal'.
• A second day of US-China trade talks got underway in London today, with the Trump administration eyeing a 'handshake' deal on rare earth and high-tech supply chains.
• Senate Majority Leader John Thune (R-SD) said the CBO's extended X-date projection gives the 'One Big Beautiful Bill', "more runway". The Senate Finance Committee, which oversees taxes and Medicaid, is aiming to release its portion of the reconciliation text by Friday.
• Interest groups and foreign nations are lobbying for the so-called 'revenge tax' to be removed from the reconciliation package.
• A Thursday floor vote is expected on the White House’s USD$9.4 billion rescissions package.
• A sixth round of US-Iran nuclear talks is expected to take place on June 15, with the White House under pressure from Iran hawks in Congress to back out of a deal.
• Poll of the Day: CEO confidence dropped sharply in H1. 

Full Article: US DAILY BRIEF

The bid/flattening in the outright German bond curve is mimicked in ASWs, spreads vs. 3-month Euribor 0.7-1.5bp firmer on the day, Buxl spread outperforming.

• The presence of this morning’s 5-Year supply didn’t provide much of a limitation for the Bobl spread, with the auction ultimately well-received.
• Zooming out, Schatz and Bobl spreads remain relatively rangebound, while Bund & Buxl spreads have rebounded to retest the highs that prevailed ahead of the futures roll.
• A reminder that sell offs in longer end spreads during May failed to challenge cycle/all-time lows.
• Broader macro sentiment remains key for spreads intraday, while medium-term focus continues to fall on German issuance intentions and the country's fiscal situation.
• The medium-term factors seemingly remain bearish for long end swap spreads, but the highly volatile headline environment that we are operating in at present means that any such weakness in those spreads is unlikely to come in a straight line.
• Pre-existing short positioning in the long end may also provide increased vol. during any rallies.