ISRAEL: Consumer Prices Rise 1.9% Y/Y in April (Est: +2.0%)

• MNI: US MBA: MARKET COMPOSITE +1.8% SA THRU APR 10 WK

Treasuries are mildly lower across the curve after briefly extending yesterday’s rally early in Asia trading. There was limited reaction to AP reporting that mediators' efforts to extend a ceasefire between the US and Iran have made progress although it has just been picked up by Bloomberg and prompted a small uplift. Against that, headlines (between the first AP publication and wider airing) of Iran warning against a continuation of the US blockade helped keep US FI close to prior lows. Today sees an airing of a Trump interview with Fox’s Bartiromo, import price data, the Beige Book and likely hawkish commentary from Hammack.  

• Cash yields are 0.7-1.3bp higher on the day, back within yesterday’s range.
• TYM6 trades at 111-16 (-01) on relatively light cumulative volumes of 285k, back firmly within yesterday’s range after briefing pushing higher early overnight with 111-21.
• That earlier 111-21 met highs from Apr 8 for a further probing of resistance at 111-19+ (50-day EMA). A clear break here could open 111-31 (50% retrace of Mar 2-27 bear leg) but gains are still deemed corrective with support at 111-05+ (Apr 14 low).
• Data: Weekly MBA (0700ET), Export/import prices Mar (0830ET), Empire mfg Apr (0830ET), NAHB housing market Apr (1000ET), TIC flows Feb (1600ET)
• Fedspeak: Barr (0830ET), Hammack (0830ET), Bowman (1345ET), Beige Book (1400ET)
• Bill issuance: US Tsy $69B 17W bill auctions (1130ET)
• Politics: Trump’s interview with Fox’s Bartiromo, recorded yesterday, could be aired any time until 0900ET, Trump in policy meeting (1230ET), WH Press Sec Leavitt press briefing with Tsy Sec Bessent (1300ET), Trump in signing time (1530ET), Trump in policy meeting (1630ET)

The UAE's state news agency reports that Emirati Vice President Sheikh Mansour bin Zayed Al Nahyan has held a phone call with the Speaker of the Iranian Parliament, Mohamed Bagher Ghalibaf, regarding efforts to de-escalate tensions in the Gulf. Jana Choukeir at Reuters notes that these are the first direct communications between the UAE and Iran regarding de-escalation since the outbreak of the conflict in late February. 

• Since the outbreak of the conflict, and in the wake of the elimination of a swathe of Iran's senior leaders, Ghalibaf has emerged as one of the most prominent officials in the Iranian regime. While the UAE has strongly criticised Iran's actions in firing thousands of missiles and drones at its military, hydrocarbon and civilian infrastructure during the conflict to date, the fact that some diplomatic conversations have resumed during the current ceasefire could be viewed as a positive sign.
• However, relations clearly remain strained. Iran's Press TV reports "Iran has vehemently rejected a UAE-backed proposal adopted by the International Maritime Organization (IMO) on establishing a so-called “safe maritime corridor” in the Strait of Hormuz, slamming it as legally-groundless and politically-motivated."
• Tala Ramadan at Reuters notes separately: "Iran’s top military command warned it would act to disrupt trade flows in the Gulf, the Gulf of Oman and the Red Sea if U.S. naval actions targeting Iranian shipping continue, and said any such move would be viewed as a breach of a ceasefire"