BOE: Greene, Bailey, Lombardelli, Taylor on neutral rates

• Bund is lifted in 5k, new intraday high and now a couple of ticks above Friday's high.
• Next immediate area of interest comes at 2.600% = 130.59.

The Senate has joined the House on recess until Sept. 2, without agreeing on a deal to confirm dozens of pending executive branch nominees, or a broader funding strategy to avert a shutdown on October 1. 

• Politico notes that before recessing, the Senate passed its first three spending bills. "In an 87-9 vote, the upper chamber passed a two-bill package that would fund the departments of Veterans Affairs and Agriculture, along with military construction and the Food and Drug Administration. A third bill “to fund Congress itself” passed, 81-15."
• Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Hakeem Jeffries (D-NY) wrote a letter to GOP counterparts requesting a “Big Four” meeting this week to discuss "the government funding deadline and the health care crisis you have visited upon the American people".
• Punchbowl notes on the prospect of a shutdown: “The outlook for a government-funding deal is pretty poor right now. A shutdown or CR – or both – is a real possibility heading into the Sept. 30 deadline. Or potentially a hybrid situation where Congress passes some spending bills and then adopts a short-term CR... That would leave Washington lurching along from shutdown threat to shutdown threat throughout 2025-26.”
• According to Polymarket, the implied probability of a government shutdown remains around 40%, with bettors likely considering Democrats unwilling to allow the government to shut down.  

Figure 1: Government Shutdown in 2025

Source: Polymarket

Adding to the Commerzbank Option trade:

• CBK (18/06/27) 24p, bought for 4.10 in 14.25k.

This option also traded on the 30th July:

• CBK (18/06/27) 24p, bought for 4.09 and 4.15 in 42k, most of the size for 4.15.