US TSYS: Rallying On Claims/PCE/Consumption Combo

• Reoffer: 99.87 to yield 3.016%
• Spread set earlier at MS+52bps (guidance was MS +54bps area)
• Size: E4bln (in line with MNI expectation)
• Books closed in excess of E23.5bln (inc E750mln JLM interest)
• Coupon: 3.0%, annual, act/act ICMA, short first
• Settlement: 7 May 2025 (T+5)
• Maturity: 15 September 2035
• ISIN: FI4000587415
• Bookrunners: BNPP (DM/B&D) / Citi / CACIB / GSBE SE / Nordea
• Timing: Books to close at 10:15BST / 11:15CET

Treasury Secretary Scott Bessent told reporters yesterday that the White House is targeting July 4 as an “aspirational” deadline to get the ‘big beautiful bill’ that covers the bulk of Trump’s tax, spending, energy, and border security agenda through Congress and to Trump’s desk. 

• Bessent said: “We’ve got three legs to the President’s economic agenda, trade, tax and deregulation, and we hope that we can have this tax portion done by Fourth of July,”
• The final deadline is likely to be informed by the Treasury Department’s projection for the X-date. As the reconciliation package is expected to include a USD$4+ trillion debt limit hike, the X-date will set a hard backstop for the package. Bessent told reporters yesterday he will have more information about the X-date, “before the end of the week or next week.”
• First up, House committees must mark up their individual bills. Armed Services, Homeland Security, and Education and Workforce get underway today. Energy and Commerce, the most closely followed markup, is likely to come next week, with any cuts to Medicaid to be closely scrutinised.
• White House NEC Director Kevin Hassett yesterday appeared lukewarm on the prospect of a ‘millionaire tax’ - a potential offset that could be used to retain safety net spending - but said the decision would ultimately fall to Trump, who has expressed openness to the idea but is cautious of the political fallout.

• ING’s view has been that the CNY depreciation pressure will be highest in the second quarter this year. It looks for now that the worst of the depreciation pressure may have passed for now, ING say, as tariffs have already quickly hit the endgame.
• With that said, the outlook remains highly uncertain given how fast things can change, and it’s still possible that the Trump administration could choose further non-trade escalations. There’s certainly no guarantee that the Chinese currency is out of the woods just yet, ING note.
• They hold their forecast USD/CNY fluctuation band of 7.00-7.40. ING say risks to their year-end forecast of 7.30 look tilted to the downside, especially if we see some de-escalation of US-China tensions in the coming months, and if both the PBOC and Fed rate moves progress in line with forecasts.