IRAN: President Trump Says He Is Not Yet "Satisfied" With Iran Deal

Tsy futures hold weaker ahead of the $70B 5Y note auction (91282CQK0) at 1300ET, WI is currently running at 4.131%, 15.1bp cheaper vs. last month's tail.

• March auction recap: Tsy futures pared gains after $70B 5Y note auction (91282CQG9) tailed yet again: drawing 3.980% high yield vs. 3.967% WI; 2.29x bid-to-cover vs. 2.32x prior.
• Peripheral stats: Indirect take-up slipped to 61.90% from 62.49% prior, direct take up to 22.48% vs. 24.70% prior, while primary dealer take-up rose to 15.61% vs. 12.81% prior.

From 09:00CET (03:00ET, 08:00BST) on Tuesday 28 April, MEPs meeting in Strasbourg will debate the budget committee’s proposal for the next Multiannual Financial Framework (the EU’s long-term budget running 2028-34). This will be followed by a vote at ~12:00CET (06:00ET, 11:00BST). The committee’s proposal is for the MFF to be set at 1.27% of member states’ GNI, with interest payments on the COVID-related Recovery and Resilience Fund (an additional 0.11% of GNI) treated as a non-associated expense rather than coming from the main budget. 

• The European Commission's original proposal from July 2025 had the level of expenditure set at 1.15% of GNI. Vice Chair of the Budget Committee, Italian MEP Giuseppe Lupo  said the result of approval of the 1.27% level would mean “the total budget will be increased to €2,014 billion and spending capacity will rise by 10 per cent.”
• There remain major divisions at the Council level, which could hinder the ability of negotiations to be concluded by year-end. The Commission is seeking a new structure for the distribution of funds, whereas those in receipt of significant sums via the Common Agricultural Policy and cohesion funding are reluctant.  
• Bloomberg News: "Another sore point is a proposal to generate cash through EU levies, known as “own resources,” to help fund the repayment of covid-era recovery bonds that are coming due. But speaking over the weekend, French President Emmanuel Macron said that the EU’s covid-era debt should be rolled over and the bloc should issue new bonds – a no-no for countries like Germany."

• Tsy futures hold near recent lows after the $69B 2Y note auction (91282CQL8) came out near in-line: high yield of 3.812% vs. 3.810% WI; 2.65x bid-to-cover vs. 2.44x prior.
• Peripheral stats: Indirect take-up retreats to 56.48% from 59.38% prior, directs take-up jumps back to 31.65% vs. 16.5% prior, primary dealer take-up retreats to 11.87% vs. 24.12% prior.
• The next 2Y auction is tentatively scheduled for May 26.