POLAND: President Uses Veto Powers to Block Green Energy Bill

Bund futures continue to consolidate above the 50-day EMA at 130.22, which was pierced yesterday. A clear break of this EMA would undermine the recent bear theme and highlight a possible reversal, exposing the July 4 high at 130.76.

• Bunds have moved away from session lows over the last ~60 mins, now unch on the session at 130.45.
• No clear headline driver for the reversal higher, but weaker Brent crude and European equity futures may be lending some support intraday.

• RES 4: 112-15   61.8% retracement of the Apr 7 - 11 sell-off
• RES 3: 112-12+ High Jul 1 and a bull trigger
• RES 2: 111-13+/111-28 High Jul 10 / High Jul 3 
• RES 1: 111-09+   High Jul 21  
• PRICE:‌‌ 111-05 @ 11:05 BST Jul 22
• SUP 1: 110-08+ Low Jul 14 & 16        
• SUP 2: 110-03   76.4% retracement of the May 22 - Jul 1 bull leg
• SUP 3: 109-28   Low Jun 6 and 11
• SUP 4: 109.25   Low May 27

Treasury futures traded higher Monday, starting the week on a firm note. The move higher has resulted in a break of the 20-day EMA, strengthening the recovery, and this has exposed resistance at 111-13+, the Jul 10 high. A clear break of this hurdle would highlight a stronger reversal. Key support lies at 110-08+, the low on Jul 14 and 16. A move through this support would reinstate the recent bearish theme.

Historically, Democrats have never willingly allowed the government to shut down. However, a lack of leverage elsewhere and President Trump’s perceived executive overreach – most recently with his rescissions package – means that Democrats may assess that triggering a shutdown is politically expedient.  

• Senate Democrat Appropriator, Tammy Baldwin (D-WI), said: “I want to pass strong bipartisan bills to provide the basis for negotiations with the House. But a lot of trust has been lost through the rescissions process.”
• Senator Mike Rounds (R-SD), a Republican appropriator who acknowledged Democrats’ concerns with Trump’s rescissions package, warned that allowing the government to shut down would likely provide the White House with greater authority over spending. (Schumer noted this dilemma when he agreed to approve the CR in March.)
• Rounds said: “Are [Democrats] willing to give up an appropriations process as a protest knowing full well that a continuing resolution works to the advantage of an administration because there’s less congressional input available?”
• The Hill reports: 'One senior Republican on the Senate Appropriations Committee put the chances of a shutdown in the fall at “a real square 50-50.”'
• The implied probability of a shutdown has ticked up to 43%, per Polymarket, but remains below the roughly 65% probability in March before Schumer acquiesced to a stopgap measure.

Figure 1: Government Shutdown in 2025

Source: Polymarket