EM LATAM CREDIT: Argentina: Local bond auctions and Monetary Policy - Neutral

Greenback is edging higher into the NY crossover, with gains slightly accelerating on the break above the overnight highs in USD/JPY at Y147.89. Moves follow the appearance from Treasury Secretary Bessent who seemed calm over the looming tariff deadlines (both the reciprocal tariffs deadline on August 1st and the deadline for a settled deal with China on August 12th).

• Markets similarly looking through most of his comments on the Fed chair. Most notably Bessent rebuffed expectations that Trump is looking to fire Powell, but the formal process has already started - which may be helping aide yields off lows and modestly underpin the dollar here.

• Treasury futures have been retreating from late overnight highs the last 45 minutes, curves twist flatter with 2s-10s in the red at the moment, (2s10s -2.488 at 50.651, 5s30s -2.011 at 96.660).
• Not particularly headline driven (Tsy Sec Bessent headlines derivative, see 0719ET bullet), more flow driven on moderate volumes (TYU5 292k) in the lead-up to June CPI at 0830ET.
• Tsy Sep'25 10Y futures trade -2 at 110-22.5 (110-20.5 overnight low), technical support at 110-20/17 (Low Jul 14 / 61.8% of the May 22 - Jul 1 bull leg).

• In the FI space, Bund futures are trading higher today. However, a bear cycle remains intact. Last Friday’s extension resulted in a break of 129.30, the May 22 low. The breach strengthens the current bearish theme and exposes the next key support at 128.97, the May 14 low and a bear trigger. On the upside, resistance around the the 50-day EMA, at 130.31, marks the key short-term hurdle. A clear breach of it is required to highlight a possible reversal.
• A bear cycle in Gilt futures remains in play and last week’s sell-off reinforces this theme. The contract has breached support at 91.63, the Jul 2 low. Price has also pierced 91.50, the 61.8% retracement of the May 22 - Jul 1 bull leg. The move down exposes 90.97, the 76.4% retracement point. Clearance of this level would strengthen a bearish theme. On the upside, initial firm resistance is at 92.29, the 20-day EMA.