PIPELINE: Corporate Bonds, Updated Guidance

• The US dollar has been trading on a firmer footing across the US trading session, likely assisted by the earlier US ISM Services Index data, which rose to the highest level since January 2023. The higher-than-expected prices paid component (65.1 vs. 61.4 est.) has provided further impetus for the greenback recovery, with stocks edging higher also providing support. Dollar indices have now recovered over half of the initial moves lower on Monday, and reside around 0.2% in the red.
• This has helped the likes of EUR and GBP to edge back towards unchanged on the session, the clear underperformers in G10. For EURUSD, this translates to the pair reversing around 65 pips from session highs to trade back at 1.13. Initial key support to watch is the 20-day EMA, at 1.1264.
• A similar move for GBPUSD has seen spot narrow the gap to overnight lows of 1.3257. A bearish tweezer top formation on the daily candle chart last Monday/Tuesday highlights a short-term top. Support to watch lies at 1.3225, the 20-day EMA. A break of this level would signal scope for a deeper retracement.
• AUD (+0.50%) remains among the best performers after an extended period of consolidation, AUDUSD is gaining following the surprisingly strong showing for Anthony Albanese in the weekend's general elections. The price action puts the rate above the 200-dma and a close above would be the first since November last year.

Tsy futures remain weaker but off midmorning lows ahead of the $58B 3Y note auction (91282CND9) at 1300ET, WI is currently at 3.815%, 3.1bp cheap to last month's tail. Auction results will be available shortly after the competitive auctions closes at 1300ET.

• April auction recap: Treasury futures near lows after $58B 3Y note auction (91282CMW8) tails 2.4bp tail, drawing 3.784% high yield vs. 3.760% WI; 2.47x bid-to-cover vs. 2.70x prior.
• Peripheral stats see indirect take-up climb to 73.03% vs. 62.5% prior; direct bidder take-up 6.24% from 26.0% prior; primary dealer take-up 20.73% vs. 11.5% prior.

• Newswires continuing to pick up on headlines from Treasury Secretary Bessent who emphasises that China is the biggest piece of Trump's trade puzzle. Bessent states he is not going to talk about the Fed, and that the administration are trying to create the best environment for stable rates.
• “IF WE CAN TAKE AWAY THE CREDIT RISK OF THE U.S. GOVERNMENT, INTEREST RATES WILL COME DOWN”
• “SAYS WE WANT TO BRING DOWN FEDERAL DEFICIT BY MAYBE 1% PER YEAR” (Reuters)