IRAN: Iran: US Unable to Understand Situation, Find Exit

• MNI: US MBA: MARKET COMPOSITE -0.8% SA THRU APR 03 WK

Treasuries hold a majority of large gains following late yesterday’s announcement of US-Iran agreeing to a two-week ceasefire, with significant underperformance to EGBs and Gilts against that backdrop. The gains have seen TYM6 probe a notable resistance level at the 50-day EMA. Geopolitical headlines will remain in focus as the Iranian ten-point plan reportedly submitted to the White House is assessed and regional tensions are still evident with both Kuwait and the UAE reporting attacks. 

• Cash yields are 2.5-7bp lower on the day with declines led by the belly.
• US 10Y yields have pushed below 4.25% for the first time since Mar 19, currently at 4.240% (-5.3bp)
• 5s30s is at 98.0bp (+3.5bp) after 99.5bp overnight for its steepest also since Mar 19.
• TYM6 trades at 111-18+ (+23) off an earlier high of 111-21 on heavy overnight cumulative volumes of 790k.
• The latest recovery still appears corrective, with the earlier high matching resistance at the 50-day EMA of 111-21 for an important level after which lies 111-31 (50% retrace of Mar 2-27 bear leg). To the downside, support at 111-04+ (20-day EMA) before 110-16 (Apr 2 low).
• Data: Weekly MBA data (0700ET)
• Fedspeak: Daly keynote remarks (1305, text + Q&A), FOMC minutes (1400ET)
• Coupon issuance: US Tsy $39B 10Y Note auction - 91282CPZ8 (1300ET)
• Bill issuance: US Tsy $69B 17W bill auctions (1130ET)
• Politics: Trump in meeting with Agriculture Sec (1130ET), WH Press Sec Leavitt press briefing (1300ET), Trump participates in interview (1400ET), Trump in meeting with NATO Sec Gen (1530ET), Trump in Freedom250 Reception (1700ET)

SX7E (19th June) 260/235ps, bought for 8.65 in 10k.