US DATA: Chicago Business Barometer™ - Slowed To 40.5 In May

-5,000 FVM5 109-07.25, post time bid at 0937:57ET, DV01 $217,000. Tempering the pre-PMI bid

UK rates markets look to Tsys/equities for cues following the U.S. data, with the initial sell off fading, leaving yields close to, but not quite matching session lows.

• Yields 3-5bp lower, early curve flattening bias holds.
• The overall bullish technical tone persists, with the previously noted downside levels of interest in 10-Year yields and upside levels of interest in futures remaining unchallenged.
• BoE-dated OIS prices ~94bp of cuts through year-end vs. yesterday’s close of ~92bp and April extremes of ~97bp.
• Expect macro cues to continue to dominate for the remainder of the day, in the form of U.S. data and any tariff-related headlines, with comments from BoE MPC member Lombardelli (16:30 BST) not set to be market-moving given the setting of her appearance (remarks at the launch of the Bank’s new economics teacher training partnership with Manchester University).

FX Exchange trade Option, looking for CAD Weakness, covers the next 4th June BoC rate meeting.

• CADUSD (6th June) 73.50c, sold at 0.23 in 1.58k.
• *CADUSD (6th June) 73.00c, sold at 0.11 in 1.1k.