OUTLOOK: Price Signal Summary - Gilts Trade Through The 20-Day EMA

• The Dollar continues to see some unwind from its earlier Overnight lows, and that's despites the Risk On Tone still on, and US Yields at the lower end of their ranges.
• As noted earlier, TYU5 printed a 112.03 high on Friday, which equated to a 4.2378% low in Yield, but Technically the next area of interest in the 10yr Yield will be at 4.1942%.
• This level equates to 112.11 today.
• The Nokkie and the Stokkie are leading the reversal and are now the worst performers within G10s.
• USDNOK targets 10.1137, Friday's high, this level is being tested now.

Goldman Sachs note that “the market-implied Fed path sits firmly on the dovish side of our economists’ baseline but is decidedly less offside on a probability-weighted basis given the context of risks that are firmly tilted to the downside”.

• They continue to think that “the path to substantially lower yields by and large rests on hard data deteriorating but acknowledge that yields could settle into a modestly richer range if inflation data provide additional evidence of mild passthrough from tariffs, which would likely support a friendlier demand backdrop”
• Ultimately, they believe that “it makes sense to navigate the data calendar tactically, recognizing that weakness in the hard data can open the left tail towards faster/larger cuts, while inflation news likely carries weight on the timing of moves in the absence of a growth signal”.
• As a result, they recommend adding 2s5s swap curve steepeners into the June payrolls print.

• Treasuries trade modestly firmer having rallied in European hours, helped by some softer regional German inflation but with Treasuries leading EGB gains on the day.
• The Senate has moved to open debate on Trump’s “One Big Beautiful Bill”, with a “vote-a-rama” expected to get underway today at 0900ET with scope to stretch into Tuesday.
• Senators Rand Paul (R-KY) and Thom Tillis (R-NC) have indicated they will vote 'no'. Trump on Truth Social on the weekend: “For all cost cutting Republicans, of which I am one, REMEMBER, you still have to get reelected. Don’t go too crazy! We will make it all up, times 10, with GROWTH, more than ever before”
• While the package is expected to clear the Senate, House Speaker Johnson's more challenging lift in the House was further complicated by a new CBO score estimating the package would add roughly USD$3.3T in budget deficits over a decade. That is USD$500B higher than the House package.
• Cash yields are circa 3bp lower from Friday’s close across the curve.
• TYU5 trades at 112-00+ (+06+) having lifted off lows of 111-22 on the open, with light cumulative volumes of 240k.
• It sits towards the high end of last week’s range, which saw 112-03 to stop just short of resistance at 112-04+ (May 2 high). After that lies a key 112-23 (May 1 high).
• Data: MNI Chicago PMI Jun (0945ET), Dallas Fed mfg Jun (1030ET)
• Fedspeak: Bostic MNI Connect Event (1000ET), Goolsbee moderate discussion (1300ET) – see STIR bullet
• Bill issuance: US Tsy $79B 13W & $71B 26W bill auctions (1130ET)