STIR: Activity Remains Subdued Despite Recent Flow In U.S. Short End

The Senate is shortly due to vote for a 13th time on the House-passed Continuing Resolution to reopen the government. The bill is expected to fail again, with no sign Democrats are prepared to unilaterally end their blockade, or that Republicans are ready to open negotiations on healthcare. LIVESTREAM

• Senate Minority Leader Chuck Schumer (D-NY) said a few moments ago, "tonight, Senate Democrats will come to the floor and warn our Republican colleagues, and the nation of the devastation Republicans are causing and by doing nothing, nothing on health care. We will highlight the impact of surging [Obamacare] premiums on families."
• Prediction markets see the shutdown extending through mid-November, despite a major pressure point on November 1, when open enrollment for ACA (Obamacare) begins and SNAP benefits hit a cliff, potentially affecting over 40 million people.
• The first credible opportunity for an offramp will come when President Donald Trump returns from his Asia trip next week. Democrats are gambling that the Trump administration will see political expedience in striking a deal with Democrats to reopen the government in return for an Obamacare subsidy extension.
• Senate Majority Leader John Thune (R-SD) may hold addtional votes on standalone bills to release supplemental funding to pay troops and air traffic controllers. Vice President JD Vance is expected to join a Senate GOP lunch today. He may advise Thune against such bills, as they would release pressure on Democrats to reopen the government. 

Figure 1: When will the Government Shutdown End? 

Source: Polymarket

• US TSY 52W BILL AUCTION: HIGH 3.445%(ALLOT 42.51%)
• US TSY 52W BILL AUCTION: DEALERS TAKE 42.14% OF COMPETITIVES
• US TSY 52W BILL AUCTION: DIRECTS TAKE 4.40% OF COMPETITIVES
• US TSY 52W BILL AUCTION: INDIRECTS TAKE 53.47% OF COMPETITIVES
• US TSY 52W AUCTION: BID/CVR 3.21

The DMO has announced it will be looking to sell GBP5.0bln of the 4.00% May-29 Gilt (ISIN: GB00BVP99566) at its auction next Tuesday, November 4.