MIDEAST: Iranian Missiles 'Dealt With And Countered'-Jordanian Gov't Spox
Reuters reports that Jordan's state news agency has said sirens were sounded following the detection of missiles entering Jordanian airspace from Iran (earlier reports noted only that sirens were sounding). Minister of Government Communication and Government Spokesperson Mohammad Al-Momani said that the missiles were dealt with and countered.
- Amid the escalation in attacks over the past 48 hours, Iran has launched missiles and drones at US bases in Kuwait, Bahrain, and Qatar. It remains to be seen whether Iranian missiles were targeting US sites in Jordan, such as the Muwaffaq Salti Air Base, or were heading towards Israel.
- As noted a short time ago (IRAN: “IRANIAN STATE MEDIA SAYS PERIMETER OF BUSHEHR NUCLEAR POWER PLANT [...]), Iran's semi-official Mehr News reports comments from Deputy Governor of Bushehr province Ehsan Jahanian claimed that "The American enemy once again attacked several points in Bushehr province, including military and civilian areas. The perimeter of the nuclear power plant and a fishing pier in the city of Assaluyeh were also attacked."
- Laurence Norman at WSJ notes that "Amid the talk about Bushehr nuclear plant being hit and Iranian officials denying it, I would point to previous hits around Bushehr [...] there were hits on anti-aerial batteries placed in the perimeter of Bushehr in previous phase of conflict. Targeting these batteries would fit both the rumour and the denial of a plant hit. Hitting Bushehr NPP itself would be a massive catastrophe."
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US TSYS: Modest Rally Aided By Further Oil Declines, Within Yesterday's Range
Treasuries are modestly firmer across the curve with a tailwind from lower crude oil futures (WTI -2.4%). Today sees data including weekly ADP, a full trade release and existing home sales – with CPI looming tomorrow – before 3Y supply. President Trump’s schedule doesn’t see any public facing appearances today.
- Cash yields are 0.7-2.5bp lower on the day, with declines led by the front end.
- Steepening continues to only pare Friday’s post-NFP flattening, with 2s10s for instance at 40.7bp vs 42-43bp pre-data via a low of 37bp later on Friday.
- TYU6 trades at 109-02+ (+01+) on lighter cumulative volumes of 265k, comfortably within yesterday’s range throughout.
- Resistance remains intact at 109-18 (20-day EMA) after which lies 110-00+ (May 29 high). Prior weakness has reinforced a medium-term bearish theme with support at 108-25 (Jun 8 low) before the bear trigger at 108-08+ (May 19 low).
- Data: Weekly ADP (0815ET), Trade balance Apr (0830ET), Existing home sales May (1000ET), Wholesale trade sales/inventories Apr/Apr F (1000ET)
- Coupon issuance: US Tsy $58B 3Y Note auction - 91282CQV6 (1300ET). Last month’s 3Y tailed by 0.5bp and the bid-to-cover slipped from 2.68x to 2.58x, whilst last week’s 5Y offering registered a twelfth consecutive auction without a trade-through (albeit just a 0.1bp tail last week).
- Bill issuance: US Tsy $65B 6W & $50B 52W bill auctions (1130ET)
- Politics: Trump in policy meetings (1400ET, 1530ET, 1730ET – all closed press)
IRAN: Al Hadath-Pakistani Source: Contacts Ongoing To Reach MoU This Week
Saudi state-run Al Hadath posts on X: "Pakistani source to Al-Hadath: Ongoing contacts with all parties to reach a memorandum of understanding during this week." It should be noted that during the course of the Middle East conflict to date, there have been numerous occasions where unnamed Pakistani sources have been quoted in regional outlets claiming that a deal is just around the corner, only for no such agreement to materialise. US President Donald Trump has also (frequently) claimed that a deal between the US and Iran is in the offing.
- US-based The Media Line reports "Speaking at JFK Airport, President Trump described the negotiations as being in their “final throes” and said there were no major unresolved issues preventing an agreement. He reiterated that any deal would prevent Iran from acquiring nuclear weapons: “We are very close to having a very, very good strong, powerful deal,” he said."
- However, Al Jazeera reported comments from an Iranian official claiming “Washington changed the draft of the memorandum of understanding, and this is unacceptable. Iran will not tolerate such violations and will treat them with great seriousness...An agreement cannot be reached if our frozen funds are not released and sanctions are not lifted.”
STIR: Fed Rate Path A Touch Softer But 2026 Hike Still Fully Priced
- US rates are slightly firmer overnight as they sit back towards yesterday's highs. Gains are helped by crude oil declines although with rates only back to yesterday’s more dovish levels vs crude easily through those lows.
- A 25bp hike remains fully priced for the Dec FOMC and whilst data picks up slightly today, attention on that front is firmly on tomorrow’s CPI report. A jump in NFIB price plans added support to this backdrop although didn't have an impact on market pricing.
- MNI US CPI Preview: https://mni.marketnews.com/4unpjNy
- FF cumulative hikes from 3.62% effective: 0.5bp Jun, 4bp Jul, 12bp Sep, 16.5bp Oct, 26.5bp Dec, building to 38.5bp Mar 2027 and 42.5bp Jun 2027.
- SOFR futures up to 2 ticks firmer on the day in the M7, with the implied peak yield of 4.075% (M7, -2bp) holding close to Friday’s post-NFP fresh highest close for the Middle East conflict of 4.105%.
