US: MNI POLITICAL RISK - Second Federal Court Weighs In On Trump Tariffs
May-30 12:28
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- President Trump's trade agenda got respite from an appeals court but a second rebuke from a federal district court. NEC director Kevin Hassett said the administration has alternative routes to keeping tariffs in place but is "not planning to pursue those right now".
- Trump’s plan to overhaul the federal bureaucracy falls to OMB Director Vought, with Elon Musk's departure from the administration.
- Trump will deliver remarks in Pennsylvania today, endorsing the Nippon Steel takeover of US Steel.
- Trump could send Congress a fleshed-out budget request for FY26 as soon as today.
- Fed Chair Powell told Trump the FOMC sets monetary policy based solely on "careful, objective, and non-political analysis".
- Treasury Secretary Bessent suggested a call between Trump and President Xi might be needed to kickstart "stalled" trade talks. Beijing has nixed one pathway to dialling down tensions, with Defence Minister Dong to skip the Shangri-La Dialogue.
- The US and EU will hold trade talks in Paris next week.
- Japanese Prime Minister Shigeru Ishiba said after a call with Trump that the two leaders now have a "deeper understanding about each other”.
- Wall Street is alarmed about a "revenge" clause in the ‘One Big Beautiful Bill’; Senator Johnson (R-WI) is leading a charge for more deficit reduction; Democrats are using the repeal of IRA credits as a wedge.
- Poll of the Day: Q2 saw one of the biggest drops in CEO confidence on record.
Full Article: US DAILY BRIEF
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US DATA: Tepid ADP Employment, Hard To Pin Directly On Tariff Disruption
Apr-30 12:27
- ADP employment was softer than expected in April at 62k (sa, cons 115k) after a downward revised 147k (initial 155k) in March.
- It’s the fourth weakest seasonally adjusted monthly increase since Jul 2020 and sees a continuation of a trend softening seen since late 2024 - see chart.
- Consensus currently stands at 122k for private payrolls in the April report released Friday. In the previous three months, ADP undershot private payrolls by 62k in Mar and 32k in Feb but overshot by 107k in Jan (prior to two-month revisions in Friday’s release).
- From the ADP press release: "Education and health services, information, and professional and business services lost jobs, while hiring in other sectors was moderate."
- "Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data. It can be difficult to make hiring decisions in such an environment.”
- Interestingly, there don’t look to be clear cut signs of a tariff-related slowdown. Smallest businesses of 1-19 employees still saw a 20k increase in headcount (with the theory that smallest companies will be most vulnerable to the need for cash to meet sudden cost increases) although those with 20-49 employees did see a second monthly decline with -9k.
- Further, trade, transport & utilities saw the second strongest sector for hiring (+21k).
- Pay details were mixed. Job stayers saw 4.5% Y/Y median pay growth after 4.6% in March but job changer pay growth accelerated two tenths to 6.9% Y/Y for the highest since Dec.
US TSY FUTURES: Post-ADP React
Apr-30 12:20
- Treasury futures gain, extend top end of range after much lower than expected April ADP jobs data and down-revision to prior
- Jun'25 10Y currently +7.5 at 112-12.5 high (10Y yld slips to 4.1351% low), just round major resistance at 112-12 (61.8% retracement of the Apr 7 - 11 bear leg), next level at 113-04 (76.4% retracement of the Apr 7 - 11 bear leg).
- Cross asset: BBG US$ index dips to 1221.80 (-0.39); stocks retreat: S&P eminis -31 at 5552.75.
BUNDS: No Lasting Reaction To CPI
Apr-30 12:13
The initial downtick in Bunds, driven by the 0.1ppt upside “surprise” in the German CPI data, quickly fades, with the national readings in line with indications provided by the regional releases seen earlier in the day.
- Contract back to pre-release levels of ~131.65 after basing at 131.58, yields 2-3bp lower on the day, light flattening bias on the curve.
