UK: Lammy Set For Deputy PM After Starmer Cabinet Reshuffle

• Treasuries gapped lower in the last few minutes, no obvious headline driver or Block/cross cited for move with some desks citing trade error for the initial move.
• Stops triggered on the way down volume jumped on the move (TYU5 appr 60,000 over a two minute span) as futures fall to 111-26.5 low -- then rebound.
• Currently, the Sep'25 10Y futures currently trades -5 at 112-04.5 vs. 112-06.5 pre-move.
• Curves gapped steeper but have retreated as well: 2s10s tapped 54.666 high currently +2.999 at 51.367.

• EUR/USD: Aug07 $1.1600(E1.1bln), $1.1745-50(E1.6bln); Aug08 $1.1500(E1.5bln), $1.1700(E1.4bln); Aug11 $1.1550(E1.2bln); Aug12 $1.1500(E1.5bln)
• EUR/GBP: Aug08 Gbp0.8675(E1.3bln), Gbp0.8700(E1.3bln)
• AUD/USD: Aug08 $0.6500(A$4.4bln)
• NZD/USD: Aug11 $0.5920-30(N$1.1bln)

President of the Swiss Confederation Karin Keller-Sutter said that she had a "good meeting" with US Secretary of State Marco Rubio in Washington, D.C., adding it was a "friendly conversation." Keller-Sutter, who as president this year sits as the 'first among equals' as chair of the seven-member Federal Council that makes up Switzerland's collective head of gov't and state, did not answer questions from reporters on whether Switzerland could offer more to the US to avoid 39% 'reciprocal' tariffs. Keller-Sutter, who serves as Minister of Finance, was accompanied by fellow federal councillor Guy Parmelin, who serves as Economy Minister and vice president of the Confederation.  

• Posting on X, Keller-Sutter said, “We discussed bilateral cooperation between Switzerland and the US, the tariff situation, and international issues,”.
• The meeting with Rubio was seen as something of a snub for the Swiss, given that the State Dep't does not hold any powers in terms of negotiating bilateral trade deals. It is Treasury Sec Scott Bessent, Commerce Sec Howard Lutnick, and USTR Jamieson Greer who have led the way on trade talks ahead of the imposition of reciprocal tariffs on 7 Aug.
• It is unclear if the Swiss federal councillors will get to meet with President Donald Trump. While the president of the Confederation is entitled to represent the entire Federal Council on foreign visits, it is unclear if the US will acquiesce.