US: MNI POLITICAL RISK - Trump's FY2026 Budget Expected Today
May-02 12:08
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- President Donald Trump will attend the RNC Spring Gala at Mar-a-Lago this evening as Congressional Republicans start to tentatively push back against his legislative priorities.
- Trump removed National Security Advisor Mike Waltz, the first significant shakeup of a more stable second administration. Waltz struggled to ride out the controversy of the Signal chat story, but the move may also reflect an ideological pivot within Trump’s national security team, away from Waltz’s traditional conservative foreign policy position.
- Potential replacements include Trump's frontline negotiator, Steve Witkoff, and State Department official Michael Anton - a ‘MAGA’ favourite.
- Markets have been receptive to reports that the US and China are sounding out trade discussions.
- The EU’s trade commissioner said Brussels would offer to increase purchases of US goods by €50bn to address the “problem” in the trade relationship.
- Japanese Finance Minister Katsunobu Kato warned Tokyo could use its US Treasuries as leverage in trade talks with Washington.
- Trump is expected to release a “skinny” version of his Fiscal Year 2026 presidential budget today, providing the first look at his priorities for funding the government.
- House Republicans are off to an inauspicious start to their reconciliation markups, delaying three crucial committee sessions.
- The final US-Ukraine reconstruction agreement takes a harder line on Russia than early drafts, appearing to open the door for future US security assistance.
- Poll of the Day: Trump’s approval rating has stabilised slightly.
Full Article: US DAILY BRIEF
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US TSYS: Early SOFR/Treasury Option Roundup: Put Volume Rises
Apr-02 12:06
SOFR option volumes picking up ahead of the NY open, chunky put spds and condors joining midcurve call spds. Implied vol rising ahead of this morning's ADP employ data and this afternoon's reciprocal tariff announcement. Projected rate cuts through mid-2025 have receded vs. late Tuesday levels (*) as follows: May'25 at -4.7bp (-5.3bp), Jun'25 at -21.2bp (-22.1bp), Jul'25 at -37.1bp (-39.1bp), Sep'25 -53.9bp (-56.6bp).
- SOFR Options:
- Block/screen, 33,000 SFRU5 95.25/95.75 put spds, 2.5 ref 96.22
- Block/screen, 29,000 0QM5 96.81/97.00 call spds, 5.0 ref 96.615
- 26,000 0QU5 95.50 puts ref 96.635
- 3,500 0QM5 97.50 calls ref 96.62
- 2,000 SFRK5 95.62/95.75/95.81/95.87 broken put condors ref 95.93
- 8,000 SFRM5 95.62/95.68/95.87/95.93 put condors ref 95.92
- 13,700 SFRM5 95.68/95.75/95.81/95.87 put condors ref 95.92
- 1,500 SFRM5 96.00/96.25/96.37 broken call flys ref 95.92
- 2,000 SFRN5 96.12/96.25/96.37 call flys ref 96.205
- 2,100 2QM5 96.56/96.81 call spds vs. 95.68/95.81 put spds ref 96.555
- 6,000 0QM5 96.75/97.00 call spds ref 96.595 to -.59
- +8,000 SFRM5 95.62/95.68/95.87/95.93 put condors, 3.5 vs. 95.895/0.05%
- Block/screen +13,000 SFRM5 96.12/96.50 call spds 3.75 ref 95.92
- Treasury Options:
- 1,600 TYM5 112/113 call spds ref 111-26.5
- 1,100 FVK5 108.5/109/109.25/109.5 broken call condors
- over 6,000 TYK5 111.5 calls, 55 ref 111-22.5
- 1,350 TYM5 112/114 call spds vs. 110 puts ref 111-21.5
- -10,000 TYK5 113.25 calls, 17 ref 111-25
- over 3,300 TYK5 114.5 calls ref 111-21.5
- -5,000 Wed wkly 10Y 111.75/112 put spds, 13 ref 111-16.5
BUNDS: March 5 Low Intact In 10-Year Yields
Apr-02 12:06
Incremental breaks above recent daily highs in Bund futures don’t gather more momentum as 10-Year yields continue to respect the March 5 (post-“whatever it takes”) low at 2.654%.
GILT PAOF RESULTS: GBP344.6mln of the 1.125% Sep-35 Linker sold.
Apr-02 12:03
- GBP400.0mln had been on offer.
- This leaves GBP5.352bln of the linker in issue.
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