AMERICAS OIL: Hedge Fund Managers Cut Net Bearish Nymex Diesel Bets

• Treasury futures are trading weaker but off lows after the bell, main focus on this afternoon's reciprocal tariff announcement from the White House, scheduled for 1600ET. Much speculation through the day from ending tariffs on cheap (under $800) China imports to a 3-tier plan first mentioned by the WSJ on March 18.
• Treasuries rallied after this morning's higher than expected ADP private jobs gain but retreated in steps off midmorning highs as stocks staged a modest rally off lows. ADP employment growth was stronger than expected in March at 155k (cons 120k) after a marginally upward revised 84k (initial 77k) in February.
• Treasurys extended session lows after Politico headlines announce that Elon Musk will step back from "governing partner" role in the next few weeks. Several new outlets have announced over the last couple days that Musk would be stepping down from DOGE by the end of May.
• Treasuries Jun'25 10Y contract currently trades 111-17 (-8) vs. 111-09 low, technical support below at 110-26.5 (20-day EMA), compares to morning high of 112-02.5 with technical resistance above at 112-13 (1.500 proj of the Jan 13 - Feb 7 - Feb 12 price swing). Curves are mildly flatter, off early week highs: 2s10s -.127 at 28.245, 5s30s -1.002 at 58.799.
• Cross asset update: stocks bounce (SPX eminis +18.5 at 5693.00), Bbg US$ index -2.59 at 1270.69, Gold higher at 1325.93, crude firmer (WTI +.61 at 71.81).

• RES 4: 0.6429 High Dec 12 ‘24
• RES 3: 0.6414 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg              
• RES 2: 0.6409 High Feb 21 and a bull trigger 
• RES 1: 0.6331/91 High Mar 26 / High Mar 17 and 18 
• PRICE: 0.6300 @ 17:06 BST Apr 2 
• SUP 1: 0.6219 Low Mar 31
• SUP 2: 0.6187 Low Feb 4
• SUP 3: 0.6171/6088 Low Feb 4 / 3 and a key support
• SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing

AUDUSD has recovered from Monday’s 0.6219 low. This affirms the view that recent weakness is likely corrective, with prices still clear of Feb 4 support at 0.6187. A move through 0.6187 is required to reinstate a bear threat. On the upside, a stronger recovery would refocus attention on 0.6409, the Feb 21 high and a key resistance. Clearance of this hurdle would strengthen the bull cycle and resume the uptrend that started Feb 3.      

Plenty of activity in Washington today outside of the tariff announcement in an hour. Fox News is reporting that the Senate budget proposal to be unveiled by Sen Lindsey Graham today would allow the debt limit increase to be voted on separately from the main bill if necessary, should the "x-date" be looming before there's agreement on the broader fiscal package (that was looking increasingly likely given that there will be a lot of disagreement among Republicans about the details, especially the spending cuts).

• The proposed $5T debt limit increase is higher than the House-passed budget's $4T - giving Treasury more room to manoever if implemented - but is in line with previous reporting.
• The package would also make the Trump tax cuts permanent (using the "current policy" baseline) without any need to consult the Senate parliamentarian.
• Previously it had been reported that Senate Republicans wanted to hold a vote by Saturday.
• Overall this Republican leadership appears confidence that they have the votes to pass this resolution, which looks to both lower risks of a debt default, while delivering large tax cuts along the more aggressive "current policy" baseline. Though it still needs to go back and forth with the House in the reconciliation process, which should take some time.
• Fox: "The Senate amendment includes raising the debt ceiling in the key budget process by no more than $5 trillion. This has been a request of Trump since before he took office the second time.... Republicans who argued to include the debt ceiling in reconciliation said it would prevent Democrats from having leverage down the road, when a vote to raise it would need 60 votes, forcing them to lobby Democrats for support.... The amendment also stipulates that the provision to raise the debt ceiling can be voted on separate from the rest of the resolution, in the case that the "X Date," when the Treasury is unable to meet its financial obligations without intervention, is set to arrive sooner than Republicans are prepared to vote on the entire reconciliation package."