MNI ASIA OPEN: Tsy Ylds Retreat on Mixed Data, Fed Speaker

EXECUTIVE SUMMARY

• MNI BRIEF: Daly Says Fed Rate Cut Looks Promising In Fall
• MNI IRAN: FT-European Capitals Believe Enriched Uranium Moved Pre-US Strike
• MNI US DATA: Durable Orders Suggest Less Negative Momentum In Investment Than Feared
• MNI US DATA: GDP Revision Shows Domestic Demand On Weaker Footing Than Seen Earlier
• MNI US DATA: Continuing Claims At Fresh Post-2021 High Suggests Continued Cooling

US

MNI BRIEF: Daly Says Fed Rate Cut Looks Promising In Fall

San Francisco Fed President Mary Daly said Thursday it is looking increasingly possible that the central bank can lower interest rates this fall, as inflation might see less upside pressure from tariff increases. "My modal outlook has been for some time that we would begin to be able to adjust the rates in in the fall and I haven't really changed that view," she said in an interview with Bloomberg TV. 

NEWS

MNI IRAN: Hegseth 'Unaware' Of Intel Saying Iran Moved Enriched Uranium Pre-Strike

Speaking in an ill-tempered Pentagon presser, US Secretary of Defense Pete Hegseth says that he is "unaware" of any intelligence suggesting highly enriched uranium was moved by Iran ahead of the airstrikes. The issue of the level of damage done to the primary enrichment sites at Natanz, Fordow, and Isfahan has been the subject of much debate, as has the prospect of whether Iran was able to remove the near-nuclear weapon grade fissile matrial. 

MNI IRAN: FT-European Capitals Believe Enriched Uranium Moved Pre-US Strike

Linking into our bullet from a short time ago (see '[IRAN] Hegseth 'Unaware' Of Intel Saying Iran Moved Enriched Uranium Pre-Strike', 13:58BST) the FT reports that European capitals believe that Iran's stockpile of enriched fissile material remains in tact following US strikes on nuclear enrichment facilities. 

MNI US: Senate Parliamentarian Strikes Key Items From OBBB, Setback For GOP

The Senate Parliamentarian, Elizabeth MacDonough, has ruled that several key pieces of the GOP’s 'One Big Beautiful Bill' fail to conform to the rules of Budget Reconciliation. Per an announcement from Senate Budget Democrats, MacDonough judged that a funding cap on the Consumer Financial Protection Bureau (CFPB) that would have cut USD$6.4 billion from the agency should be removed.

MNI EUROPEAN COUNCIL: Politico-France Not Backing German Push For Swift US Deal

Politico reports that Germany and France are somewhat at odds with regards to effort to reach a swift trade deal with the US ahead of the 9 July deadline for 'reciprocal' tariffs to kick in. 

US TSYS

MNI US TSYS: Nearing Early May Highs, Mixed Data, US$ Weakness

• Treasuries look to finish near late session highs after digesting a deluge of mixed data and multiple Fed speakers on the day.
• Initial jobless claims fell more than expected in the week of June 21, to 236k (243k survey) while continuing claims set a fresh post-Nov 2021 high, up to 1,974k (1,937k prior ref down 8k), much higher than the 1,950k expected in the Jun 14 week.
• Durable goods orders were much stronger than expected in May across the board. The headline reading soared 16.4% M/M (SA), more than reversing April's 6.6% drop (rev from -6.6%) for the biggest monthly rise since July 2014 to a record-high seasonally-adjusted level, and well above the 8.5% increase expected.
• The advance goods trade deficit was bigger than anticipated in May, with the $96.6B shortfall comfortably exceeding the $86.1B survey.
• Tsy Sep'25 10Y futures climbed to 112-01.5 (+11.5) nearing resistance at 12-04.5 (High May 2) followed by 112-23 (High May 1 and key resistance).  Curves steeper: 2s10s +2.838 at 53.417, 5s30s +3.269 at 101.281.
• Stocks climbed to Feb 20 highs while the dollar index sunk to fresh cycle lows on Thursday amid President Trump’s most recent rhetoric regarding the Federal reserve remaining a key driver of the moves in G10.
• Friday look ahead: Personal Income & Spending, UofM sentiment and more Fed speakers on tap.

OVERNIGHT DATA

MNI US DATA: Durable Orders Suggest Less Negative Momentum In Investment Than Feared

Durable goods orders were much stronger than expected in May across the board. The headline reading soared 16.4% M/M (SA), more than reversing April's 6.6% drop (rev from -6.6%) for the biggest monthly rise since July 2014 to a record-high seasonally-adjusted level, and well above the 8.5% increase expected. 

MNI US DATA: GDP Revision Shows Domestic Demand On Weaker Footing Than Seen Earlier

The main takeaway from the final revision to Q1 GDP is that not only was growth overall weaker than previously estimated, but that it was domestic demand rather than idiosyncratic factors in the quarter that largely drove the lower revision. Overall the data shows consumer demand on a weaker footing than previously seen going into a volatile Q2.

• Real GDP growth is now estimated at -0.50% Q/Q SAAR, down from the prior -0.24% estimate. Net exports dragged on headline GDP less than expected too: -4.6pp (previously est -4.9pp), due largely to less of a subtraction from the inventories column. Investment, government spending, and inventories were all relatively steady vs the previous estimates.

MNI US DATA: Continuing Claims At Fresh Post-2021 High Suggests Continued Cooling

Initial jobless claims fell more than expected in the week of June 21, to 236k (243k survey) in what was the 2nd consecutive weekly fall (prior 246k rev up 1k) to a 5-week low. Once again though, continuing claims set a fresh post-Nov 2021 high, up to 1,974k (1,937k prior ref down 8k), much higher than the 1,950k expected in the Jun 14 week. The claims rate ticked up 0.02pp to 1.29%, a post-Dec 2021 high.

• The data are very much consistent with Fed Chair Powell's largest concern about an otherwise solid labor market, as he put it last week: "The thing is, there's -- a more concerning thing is there's not a lot of layoffs, but there's not a lot of job creation...if you're out of work, it's hard to find a job. But very few people are being laid off at this point."

MNI US DATA: Trade Deficit Re-Widens In May As Exports See Historic Pullback

The advance goods trade deficit was bigger than anticipated in May, with the $96.6B shortfall comfortably exceeding the $86.1B survey. This is likely to weigh slightly on Q2 GDP estimates, with weakness in exports particularly concerning.

• This was the 2nd smallest deficit in the last 14 months (April's $87.0B was the other) though, and brings the 3-month moving average of the deficit down to roughly 4.6% of GDP vs the 6.2% peak in March which represented a significant pre-tariff front-loading of imports, including gold.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 371.8 points (0.87%) at 43355.5
S&P E-Mini Future up 43.75 points (0.71%) at 6190.75
Nasdaq up 190 points (1%) at 20162.56
US 10-Yr yield is down 4.1 bps at 4.2495%
US Sep 10-Yr futures are up 10.5/32 at 112-0.5
EURUSD up 0.0052 (0.45%) at 1.1711
USDJPY down 0.93 (-0.64%) at 144.32
WTI Crude Oil (front-month) up $0.48 (0.74%) at $65.40
Gold is down $1.1 (-0.03%) at $3331.13

European bourses closing levels:
EuroStoxx 50 down 7.98 points (-0.15%) at 5244.03
FTSE 100 up 16.85 points (0.19%) at 8735.6
German DAX up 150.97 points (0.64%) at 23649.3
French CAC 40 down 0.85 points (-0.01%) at 7557.31

US TREASURY FUTURES CLOSE

3M10Y -5.61, -6.955 (L: -6.955 / H: -0.517)
2Y10Y +2.643, 53.222 (L: 49.663 / H: 54.545)
2Y30Y +4.749, 109.484 (L: 103.868 / H: 111.568)
5Y30Y +3.142, 101.154 (L: 96.778 / H: 102.877)
Current futures levels:
Sep 2-Yr futures up 4/32 at 104-1.125 (L: 103-28.875 / H: 104-01.75)
Sep 5-Yr futures up 8/32 at 109-0 (L: 108-23.5 / H: 109-00.75)
Sep 10-Yr futures up 10.5/32 at 112-0.5 (L: 111-21 / H: 112-01.5) 
Sep 30-Yr futures up 12/32 at 114-30 (L: 114-14 / H: 115-01)
Sep Ultra futures up 17/32 at 118-12 (L: 117-19 / H: 118-17)

MNI US 10YR FUTURE TECHS: (U5) Bull Cycle Extends

• RES 4: 114-14   High Apr 7 and key resistance 
• RES 3: 113-07   76.4% retracement of the Apr 7 - 11 bear leg
• RES 2: 112-23   High May 1 and key resistance
• RES 1: 12-04+ High May 2
• PRICE:‌‌ 111-30+ @ 14;49 BST Jun 27
• SUP 1: 110-24   50-day EMA        
• SUP 2: 110-10+/109-28 Low Jun 16 / Low Jun 6 / 11
• SUP 3: 109-12+ Low May 22 and the bear trigger
• SUP 4: 109-09+ Low Apr 11 and key support

Treasury futures are trading higher again, today. Price has cleared resistance at 111-14+, the Jun 5 high and 61.8% of the May 1 - 22 downleg. The clear break of this hurdle strengthens a bullish cycle. Note too that today’s gains have delivered a print above 111-30, 76.4% of May 1-22 downleg. A clear break of this level would strengthen current conditions. Initial pivot support to watch lies at 110-24, the 50-day EMA.

SOFR FUTURES CLOSE

Sep 25 +0.025 at 960
Dec 25 +0.050 at 96.320
Mar 26 +0.070 at 96.580
Jun 26 +0.075 at 96.80
Red Pack (Sep 26-Jun 27) +0.060 to +0.075
Green Pack (Sep 27-Jun 28) +0.055 to +0.055
Blue Pack (Sep 28-Jun 29) +0.050 to +0.050
Gold Pack (Sep 29-Jun 30) +0.045 to +0.050

REFERENCE RATES (PRIOR SESSION)
​​​​​​​
US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.36% (+0.06), volume: $2.772T
• Broad General Collateral Rate (BGCR): 4.33% (+0.05), volume: $1.077T
• Tri-Party General Collateral Rate (TCR): 4.33% (+0.05), volume: $1.062T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $128B
• Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $281B

FED Reverse Repo Operation

RRP usage rises to $252.242B this afternoon from $210.879B yesterday, total number of counterparties at 38. Usage had fallen to $54.772B on Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B.

MNI PIPELINE: Corporate Bonds Update: $3B Mizuho 3Pt Debt Launched

• Date $MM Issuer (Priced *, Launch #)
• 06/26 $3B #Mizuho $1.25B 6NC5 +92, $750M 6NC5 SOFR+125, $1B 11NC10 +107
• 06/26 $2.4B #Takeda $1.65B 10Y +100, $750M 30Y +110
• 06/26 $1.5B #Williams Cos $750M 5Y +85, $750M 10Y +110
• 06/26 $875M #Public Storage $475M 5Y +65, $400M 10Y +80
  06/26 $750M #Raizen Fuels Finance 7Y +245
• 06/26 $Benchmark Softbank 5Y/10Y investor calls

MNI BONDS: EGBs-GILTS CASH CLOSE: Twist Steepening Ahead Of Euro Inflation Round

European short-end instruments outperformed on respective curves Thursday, with long ends lagging in a twist steepening move.

• Core FI was on the front foot in early trade, largely following Treasuries' cue on reports (later disputed) that the White House could soon name the intended replacement for Federal Reserve Chair Powell.
• Whlie the short-end rally persisted, the long-end was under pressure through much of the rest of the session. Factors included a soft 20Y Gilt tender, and an intraday rebound in equities.
• There were multiple central bank speakers but they didn't deliver meaningful market impact, with BOE's Bailey hewing to the script of the June Minutes and not giving more away on his views on the labour market, while ECB's Schnabel noted that the monetary policy cycle is "coming to an end".
• Gilts outperformed Bunds across most of the curve. Periphery/semi-core EGB spreads tightened, with BTPs outperforming.
• Friday's calendar includes the beginning of the June flash Eurozone inflation round, with France and Spain (MNI preview here).

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 1.8bps at 1.825%, 5-Yr is down 0.8bps at 2.134%, 10-Yr is up 0.4bps at 2.569%, and 30-Yr is up 1.8bps at 3.07%.
• UK: The 2-Yr yield is down 2.9bps at 3.827%, 5-Yr is down 3bps at 3.949%, 10-Yr is down 0.9bps at 4.472%, and 30-Yr is up 2.2bps at 5.253%.
• Italian BTP spread down 2.9bps at 88.4bps / Spanish down 2.1bps at 64.4bps

MNI FOREX: USD Index Set to Post Lowest Close Since February 2022

• The dollar index sunk to fresh cycle lows on Thursday amid President Trump’s most recent rhetoric regarding the Federal reserve remaining a key driver of the moves in G10. Downward momentum for the DXY gathered pace on a break of the June lows, with the index on track to post its lowest daily close since February 2022. A mixed set of US data on Thursday prompted a more consolidatory US session in comparison to the more directional European morning.
• The broad based greenback weakness prompted several G10 currencies to rise through significant levels, with EUR, GBP and CHF standing out.
• EURUSD pushed through the overnight highs to trade at the highest level since September 2021. 1.1744 highs fell just shy of the next resistance point of 1.1755, while 1.1783 and 1.1821 the next technical targets for the move.
• Dips for EURUSD have remained shallow, and short-term moving averages have underpinned the move well, best evidence being Monday’s test and subsequent surge off the 20-day EMA. Furthermore, analysts have continued to upgrade their forecasts for the pair, most notably Goldman Sachs who now expect it to rise to 1.25 over the next 12 months.
• Latest USDCHF weakness has extended on a break of key support at 0.8040, the Apr 21 low, confirming a resumption of the medium-term technical downtrend. Furthermore, the pair has breached the psychological 0.8000 mark, representing the lowest recorded level since the removal of the EURCHF floor in 2015. Below here, targets include 0.7927 and 0.7827, the 1.50 & 1.618 projections of the May 1 - Sep 6 2024 - Jan 13 price swing.
• While not at cycle extremes, JPY volatility continues to standout this week. USDJPY reached a low of 143.75 before stabilising today, around 425 pips below the Monday peak. The pullback will likely have been exacerbated by much cleaner short-term positioning following the pair’s short squeeze.
• Tokyo CPI kicks off the Friday data calendar before French and Spanish inflation prints. After this, May PCE highlights the US schedule alongside Canada GDP. 

FRIDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
27/06/2025	0600/0800	**	SE	PPI
27/06/2025	0645/0845	***	FR	HICP (p)
27/06/2025	0645/0845	**	FR	PPI
27/06/2025	0645/0845	**	FR	Consumer Spending
27/06/2025	0700/0900	***	ES	HICP (p)
27/06/2025	0800/1000	**	IT	ISTAT Consumer Confidence
27/06/2025	0800/1000	**	IT	ISTAT Business Confidence
27/06/2025	0900/1100	*	EU	Consumer Confidence, Industrial Sentiment
27/06/2025	1000/1200	**	IT	PPI
27/06/2025	1130/0730		US	New York Fed's John Williams
27/06/2025	1230/0830	***	CA	Gross Domestic Product by Industry
27/06/2025	1230/0830	***	US	Personal Income and Consumption
27/06/2025	1230/0830	***	CA	Gross Domestic Product by Industry
27/06/2025	1315/0915		US	Cleveland Fed's Beth Hammack
27/06/2025	1400/1000	***	US	U. Mich. Survey of Consumers
27/06/2025	1400/1000	**	US	University of Michigan Surveys of Consumers Inflation Expectation
27/06/2025	1500/1100		CA	Finance Dept monthly Fiscal Monitor (expected)
27/06/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
27/06/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly