US: MNI POLITICAL RISK - House Takes Up Big Beautiful Bill
Jul-02 12:20
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- President Donald Trump has no public events on his schedule, indicating he will spend the day on the phone with wavering House Republicans to coax the ‘Big Beautiful Bill’ over the finish line.
- After a 26-hour vote-a-rama the Senate passed the OBBB in a 51-50 vote, with VP JD Vance casting the tie-breaking vote.
- Early this morning, the House Rules Committee voted 7-6 to advance the package to the House floor. Conservative hardliners on the panel - Chip Roy (R-TX) and Ralph Norman (R-SC) - voted with Democrats, signalling House Speaker Mike Johnson (R-LA) will face stiff opposition from his conservative flank.
- Johnson is likely to follow the playbook he has used in previous House votes, including leveraging Trump’s range of coercive tools. Our baseline scenario is that this strategy will succeed again, but opposition may be more entrenched this time.
- Trump renewed threats to unilaterally impose tariff rates on trading partners, including suggesting a tariff rate upwards of 30% on Japan. Trump was more positive about a trade deal with India.
- The Pentagon has halted the delivery of Patriot air-defence missiles and other key munitions to Ukraine, raising concerns that Trump is winding down support for Kyiv.
- Trump said Israel has accepted the terms of a Gaza ceasefire.
- Iran says US airstrikes caused "serious and heavy damage" to its Fordow nuclear facility.
- Poll of the Day: Most investors foresee volatility persisting through 2025.
Full Article: US DAILY BRIEF
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GILTS: Citi Still Look For Further Curve Steepening
Jun-02 12:19
Citi note that “the 5s30s curve has become range-bound, with a propensity to ‘twist’. It has been resistant to flattening in the May sell-off, despite the DMO’s cut to 15-Year+ issuance”.
- Theu go on to suggest that the “supply reduction may yet be undone by QT. Meanwhile, the upcoming Spending Review will likely reiterate the fiscal challenge”.
- Ultimately, they suggest that “with little left to take out of MPC cut pricing, in our view, bear-flattening pressure may fade. All in, our bias remains for further steepening well beyond the forwards”.
SOFR OPTIONS: Morning Option Trades
Jun-02 12:17
- SFRM5 95.81/95.75ps, traded for 6 in 10k total (8k was done on Block).
- SFRZ5 95.75/95.62ps 1x2, traded flat in 2k.
- 0QM5/2QM5 96.87c spread, traded for -1 in 1.5k.
SONIA: Put Ladder
Jun-02 12:09
SFIU5 96.00/95.90/95.60p ladder, bought for 3.5 in 4k.
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