US: Democrats Hold Slight Lead On Generic Congressional Ballot
Analysis from G. Elliott Morris on an August Strength In Numbers/Verasight poll shows that the Democratic Party holds a slight advantage over the Republican Party on the generic ballot.
- Morris notes: "If the 2026 midterms were held today, 49% say they would back the Democratic candidate in their local House district, 41% the Republican candidate, and 10% remain undecided or say they aren't sure. Among decided voters, that's an eight-point Democratic lead."
- Morris adds: "The 49% figure for Democrats is the largest we've recorded for the party so far, but these margins are statistically indistinguishable from our prior polls... so while the point estimate has bounced, the underlying picture is of a stable, modest Democratic advantage."
- The survey comes as Democrats register a ballot box success, flipping an open Iowa state Senate seat in a special election yesterday, breaking the GOP’s supermajority in the state’s upper house.
- DNC Chair Ken Martin said yesterday evening, noting that President Donald Trump won the Iowa district by 11 points in the 2024 presidential election, that voters "are putting Republicans on notice".
Figure 1: "Percent responding to the question "If the 2026 general election for Congress were held today, which party’s candidate would you be more likely to vote for in your local Congressional district?""
Source: G. Elliott Morris, Strength in Numbers
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SOFR OPTIONS: Sep'25 SOFR Put Fly Sale
- -30,000 SFRU5 95.37/95.62/95.75 put flys 9.0 vs. 95.83/0.46%
BONDS: EGBs-GILTS CASH CLOSE: Gilts Underperform Bunds After EU-US Trade Pact
EGBs outperformed Gilts Monday as the implications of the EU-US trade pact agreed over the weekend were digested.
- Yields headed lower in early trade on the growth concerns implied by an increased tariff on EU exports to the US and the diminished prospects for EU retaliation on US imports, but the rest of the session saw a pronounced divergence between Gilts and Bunds.
- An MNI Policy sources piece ("MNI SOURCES: Markets Overplaying ECB's Hawkish Shift") boosted EGBs, led by the short end.
- German yields spiked briefly on defence spending headlines, but the move faded as there was nothing new (previously reported in June).
- The German curve bull steepened, with the UK's bear flattening.
- Periphery/semi-core EGB spreads were mostly lower.
- Tuesday's calendar includes UK money supply/consumer credit data, ECB CPI expectations, and Spanish retail sales.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 3bps at 1.918%, 5-Yr is down 3.1bps at 2.267%, 10-Yr is down 2.9bps at 2.689%, and 30-Yr is down 1.1bps at 3.196%.
- UK: The 2-Yr yield is up 2.2bps at 3.906%, 5-Yr is up 1.7bps at 4.075%, 10-Yr is up 1.2bps at 4.647%, and 30-Yr is up 0.5bps at 5.454%.
- Italian BTP spread down 1.7bps at 81.7bps / Spanish down 1.1bps at 58.5bps
MACRO ANALYSIS: Main US Macro Changes Since June FOMC
The below report offers a succinct look at the main macroeconomic developments across inflation, the labor market and activity indicators since the last FOMC meeting on June 17-18. It’s part of the full MNI US Fed Preview (here).
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