BUNDS: Large Buxl Calendar spread

• EUR/USD: Aug05 $1.1425(E1.6bln), $1.1500(E1.4bln), $1.1550(E1.7bln), $1.1585-00(E2.5bln); Aug06 $1.1500-10(E1.6bln)
• USD/JPY: Aug06 Y152.00($1.0bln); Aug07 Y147.65($1.0bln), Y148.00-15($1.7bln), Y148.50($1.1bln)
• EUR/GBP: Aug05 Gbp0.8650-70(E1.3bln)
• AUD/USD: Aug05 $0.6465-80(A$1.1bln); Aug07 $0.6600(A$2.0bln)

TD Securities note that bond markets “will continue to balance the impact of fiscal and tariffs”. They see “more scope for the latter to weigh on growth in the near term” and look for 10-Year Bund and 10-Year gilt yields to finish ’25 at 2.30% and 3.80%, respectively.

• Treasuries have recently pared losses to further limit moves from Friday’s close with the nonfarm payrolls report and its hugely weak two-month revisions digested. For a succinct summary of last week's swings seen after a patient Fed and weak payrolls report, see the MNI US Macro Weekly (link here).
• We touch on it more in the STIR bullet but President Trump says he will announce a new Fed Governor and BLS commissioner in the coming days following a surprise resignation/termination on Friday.
• Cash yields are 1-2bp higher on the day, with 2Y yields for instance more than 25bp before pre-payrolls levels.
• 10Y yields, currently at 4.232%, appeared to meet some support at 4.20% on Friday, touching 4.2002%. It last breached 4.20% on Jul 1 and before that late Apr/early May.
• TYU5 trades at 112-05+ (-01) having pulled back off an overnight high of 112-12, on solid cumulative volumes of 510k as non-US participants caught up with Friday’s price action.
• Friday’s rally punched through 111-14+ (Jul 22/30 high) whilst the overnight high stopped just short of resistance at a bull trigger of 112-12+ (Jul 1 high). There’s further resistance seen shortly after with 112-15 (61.8% retrace of Apr 7-11 sell-off).
• Data: Factory orders Jun (1000ET)
• Fedspeak: None scheduled
• Bill issuance: US Tsy $82B 13W, $73B 26W bill auctions (1130ET)