CANADA DATA: Dour PMIs In June; Firmly Contractionary With Rising Inflation

• +5,000 FVU5 108-11, buy through 108-10.5 post time offer at 1008:12ET, DV01 $323,500.
• The 5Y contract trades 108-10 last (+11).

• Treasury futures extended highs, drawing some sell interest after mixed ISM Services data (index & new orders lower than expected, prices paid and employ higher).
• Tsy Sep'25 10Y futures currently trades +17.5 at 111-00 (111-01 high) through resistance at 110-30 (High May 30 and high Jun 2). Next resistance at 111-05.5 (High May 9).
• Curves mixed now, off early lows: 2s10s -0.729 at 49.126, 5s30s +0.386 at 96.231
• Cross asset: Stocks pare gains (SPX eminis steady at 5981.5), Gold bouncing to 3363.45, Bbg US$ index extending lows 1208.96 (-5.0).

US Commerce Secretary Howard Lutnick is shortly due to deliver testimony to the Senate Appropriations Committee on President Donald Trump's FY26 budget request for the Department of Commerce. LIVESTREAM

• The testimony comes after Trump signed a proclamation yesterday raising the tariff on steel and aluminium imports from 25% to 50%, effective as of 00:01 ET 05:01 BST this morning (Wednesday, June 4).
• The proclamation said: “Although the previously imposed steel and aluminum tariffs have helped provide critical price support … they have not yet enabled these industries to develop and maintain capacity [required for] national defense needs.”
• Republicans and Democrats alike on the Appropriations panel are likely to grill Lutnick on the status of the ‘90 trade deals in 90 days’ that Trade Counsellor Peter Navarro promised shortly after Trump agreed to pause his ‘reciprocal tariffs’ on April 9.
• At 14:00 ET 19:00 BST, OMB Director Russell Vought will testify on Trump’s FY26 budget request for the OMB before the House Appropriations Committee. Expect fireworks from Democrats on the panel, who view Vought as the primary driver behind Trump’s plans to dismantle the federal bureaucracy.