TARIFFS: Bessent Refuses To Be Drawn On Timeline For Trade Deal Announcements
US Treasury Secretary Scott Bessent has stated in testimony to the House Financial Services Committee that some trade negotiations are in “advanced stages” but refused to be drawn on a timeline for announcing deals, despite telling CNBC that deals could be announced as soon as this week.
- Bessent said revealing details of specific trade deals, including previewing announcements, would be “detrimental to the United States,” as negotiations may “still be in progress.”
- Bessent added, when pressed: “I’m happy to say there are negotiations going on [but] I’m not going to reveal the details.”
- Bessent reiterates that there are “18 important trading partners and we are moving forward at all deliberate speed with them.”
- When asked if he considered the negotiations “advanced”, Bessent said “some of them are quite advanced.”
- Bessent said that, rather than full negotiated trade deals, he expects upcoming announcements to be “agreements in principle,” which will be “papered over in the coming months.” Bessent noted that once an “agreement” is reached, he expects the other countries to “live up to it.”
- Bessent responded to a question asking if negotiations with China are advanced: “On Saturday we will begin, which I believe is the opposite of advanced.”
- Bessent also confirmed that President Donald Trump will have the "final decision" on any trade agreement.
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US TSY FUTURES: BLOCK: Jun'25 10Y Sale
- -5,269 TYM5 112-10, sell through 112-11.5 post time bid at 1048:04ET, DV01 $335,000. The 10Y contract trades 112-07 last (-27).
EGBS: Bund Futures More Than Reverse Erroneous Headline-Driven Sell-off
Bund futures have more than reversed the sell-off attributed to an erroneous rumour that US President Trump was considering 3-month delay to tariffs on countries excluding China. That leaves futures -27 ticks lower today at 130.25, having briefly traded as low as 129.11.
- Price action over the past ~45 minutes underscores the highly sensitive nature of global markets to ongoing US tariff developments. Where the tariffs themselves and any retaliation from trading partners ultimately land will be key to central bank and fiscal policy outlooks.
- The 20-day EMA at 129.02 has contained downside in Bund futures intraday, and this level remains a key short-term support.
- On the topside, Friday’s high at 131.48 presents initial resistance.
- The German curve has twist steepened on the session, with Schatz yields down 5.5bps owing to dovish repricing in ECB rate cut expectations. 30-year Bund yields are up 3.5bps, dragged higher by long-end USTs.
- 10-year EGB spreads to Bunds have moved away from earlier highs during the course of the session. The BTP/Bund spread is 5.5bps wider at 124.5bps, dow from a high of over 130bps earlier).
BONDS: MNI Europe Pi: German Short-End Going Long
There has been a sharp shift toward long structural positioning territory for nearer-dated German bond futures contracts in the last two weeks, per the latest MNI Pi.
- That contrasts with the longer-end contracts, as well as some non-German contracts (especially Gilts).
- Last week saw trade consistent with long-setting and short covering across the European FI space.
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