US OUTLOOK/OPINION: Consensus Doesn't Join Powell Eyeing Upward GDP Revisions

• In the FI space, Bund futures have pulled back from their recent highs. Despite the latest move down, a bull cycle remains in play and the sell-off between Apr 7 - 9 is considered corrective. Attention is on resistance at 132.03, the Apr 7 high and a bull trigger. Clearance of this level would confirm a resumption of the uptrend and open 132.56, the Feb 28 high. Firm support lies at 130.70, the 20-day EMA.
• Gilt futures are holding on to their latest gains. The recent rally marks an extension of the recovery that started Apr 9. 92.63, the Apr 8 high, has been breached, exposing 93.44, the 76.4% retracement of the Apr 7-9 sell-off. A break of this level would strengthen the current bull cycle and open 94.50, the Apr 7 high and a key resistance. On the downside, support to watch is 92.30, the 20-day EMA.

"The Republic of Portugal has mandated BBVA, Deutsche Bank, Goldman Sachs Bank Europe SE, J.P. Morgan, NovoBanco and Santander as Joint Lead Managers for a forthcoming 15-year EUR 3bn (Will not grow) Portuguese Government Bond (PGB) maturing on 15 June 2040."

From market source

• Treasuries are mildly lower on the day after a late open for cash with a Japan holiday despite recent downward pressure in equity futures.
• The net move lower after yesterday’s sizeable bull steepening has been aided by the WSJ reporting after the close yesterday that Trump is expected to soften the impact of auto tariffs.
• Bessent at 0830ET in a White House briefing with Leavitt today drew some short-lived optimism on trade deal progress yesterday, and will be watched today.
• Data will also be important, including trade, JOLTS and consumer confidence, along with earnings (including Booking, Snap, Starbucks, Visa after the close) and Trump headlines.  
• Cash yields are 1-2bp higher across the curve, consolidating yesterday’s bull steepening with 2s10s for example at 52bps.
• TYM5 trades at 111-25+ (-04+) on particularly low volumes of 215k although the Japan holiday will have impacted at the margin.  
• It has pulled back off yesterday’s high of 111-31 having cleared resistance at 111-25 (50% retrace of Apr 7-11 bear leg). This undermines a recent bearish theme, opening the round 112-00 before 112-12 (61.8% retrace of Apr 7-11 bear leg).
• Data: Advance goods trade balance Mar (0830ET), Wholesale/retail inventories Mar P/Mar (0830ET), FHFA/S&P CoreLogic House prices Feb (0900ET), JOLTS Mar (1000ET), Conf. Board consumer survey Apr (1000ET), Dallas Fed services Apr (1030ET)
• Bill issuance: US Tsy $70B 6W bill auction (1130ET)
• In case missed yesterday, Treasury's latest borrowing estimates were slightly higher than MNI's estimates, at $514B for the Apr-Jun quarter and $554B for the Jul-Sep quarter (MNI had pencilled in $500B for each quarter). There may have been some disappointment given Treasury did not lower the quarter-end TGA cash targets, which had been expected by some, but the current quarter's borrowing requirements are - excluding the effect of TGA cash rebuild - actually $53B lower than estimated at the last refunding in February. It could tilt the balance on Wednesday’s full QRA to no change in guidance on nominal coupon sizes being unchanged for “at least the next several quarters”, a positive development for Treasuries.