ECB: Schnabel Mirrors "Monetary Cycle Coming To An End"

King Charles III will deliver the Speech from the Throne, officially opening parliament and outlining the gov'ts legislative programme for the upcoming session, at 11:00ET (16:00BST, 17:00CET). While setting out the policy priorities for Prime Minister Mark Carney's minority Liberal party administration, the tone and text of the speech will also be closely scrutinised amid the sharp deterioration in US-Canadian relations in recent months. 

• The King, in Canada for a short visit, will be the first reigning monarch to deliver the Speech from the Throne in person since his mother, the late Queen Elizabeth II, did so in 1977. The fact that the King accepted Carney's invitation to read the speech has been viewed as an implicit rebuke to US President Donald Trump regarding his inflammatory comments regarding Canadian sovereignty.
• In terms of policy impact, Politico notes that observers will "parse every pledge, comparing phrasing and level of urgency to the Liberal campaign platform and last week's mandate letter."
• The mandate letter offered a brief list of seven priorities: establishing a new economic and security relationship with the US while diversifying trade; removing barriers to interprovincial trade; tackling inflation, making housing more affordable; strengthening the armed forces and law enforcement; attracting talent while restoring 'sustainable' immigration; and spending less on gov't operations.
• In an interview with MNI former deputy leader of the opposition Conservatives, Lisa Raitt, highlighted that Carney's perceived 'pragmatism' on policy could see his minority administration last longer than most others (see 'MNI INTERVIEW: Carney Minority Govt To Last On Economy'). 

• Treasuries sit bull flatter from Friday’s close after yesterday’s cash closure and thin futures trading for US Memorial Day.
• The flattening impetus is aided by Reuters reporting the Japan MoF may shift the composition of its bond issuance plan for the current fiscal year.
• Cash yields are 1.5-7bp lower from Friday after yesterday’s cash closure, with declines led by 30s (at 4.968% for a further shift away from last week’s 5.15%).
• It sees a pullback from last week’s multi-year steeps for 5s30s, currently at 91.8bp after fleetingly clearing 100bps on both Thu and Fri with a high of 101bp (highest since Oct 2021).
• TYM5 trades at 110-09+, +07 from Friday’s settle after an early close yesterday, off an earlier high of 110-13. The lift off the May 22 low of 109-13 is deemed corrective and could next see resistance at 110-21+ (May 16 high), a key near-term level.
• The June expiry is still the front month but the quarterly roll should now dominate, with first notice on May 30th.
• Data: Durable goods Apr prelim (0830ET) – FHFA and S&P CoreLogic house prices Mar (0900ET), Conference Board consumer survey May (1000ET), Dallas Fed mfg May (1030ET)
• Fedspeak: Barkin on BBG TV (0930ET), Williams in moderated discussion (2000ET) – see STIR bullet.
• Coupon issuance: US Tsy to sell 2Y $69B 2Y Note 91282CNE7 (1300ET)
• Bill issuance: $76B 13W and $68B 26W (1130ET) before $70B 6W (1300ET)

• On the commodity front, Gold has recently recovered from its lows. The climb signals the end of the corrective phase between Apr 22 - May 15. Medium-term trend signals are unchanged and remain bullish. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend. A continuation higher would open $3435.6 next, the May 7 high. Key support and the bear trigger has been defined at $3121.0, the May 15 low.First support is $3282.8, the 20-day EMA. Today’s pullback is considered corrective.
• In the oil space, WTI futures traded to a fresh S/T cycle high last Wednesday before finding resistance. The recovery since Apr 9, appears corrective. Key resistance to watch is $62.71, the 50-day EMA. It has been pierced, a clear break of it would highlight a stronger reversal and open $65.82, Apr 4 high. For bears a reversal lower would refocus attention on $54.33, the Apr 9 low and bear trigger. The price pattern on May 21 is a shooting star - a reversal signal.