EURUSD TECHS: Trend Structure Still Bullish

• Politico reports that the US is planning to send 9,000 migrants to Guantanamo Bay, starting next week.
• "That would be an exponential increase from the roughly 500 migrants who have been held for short periods at the base since February and a major step toward realizing a plan President Donald Trump announced in January to use the facility to hold as many as 30,000 migrants."
• It’s another reminder of the significant changes in labor force dynamics over the past year. Immigration inflows, at least judging by border encounters, had started to fall in Jun 2024 after a Biden executive order tightened the southern border but they have since tumbled under the second Trump administration.
• April saw nationwide encounters of 29k, a -88% Y/Y reduction. For context, they averaged a monthly 144k in 2H24, 240k in 1H24 and 277k in 2023 as a whole.
• Deportations are going a step further and reducing the labor force. It increasingly puts long-term breakeven estimates of payrolls in the ~100k region into focus, in terms of how to compare the relative strength of last week’s May payrolls report as well as upcoming ones. 

• WI holding retreats slightly ahead of the $58B 3Y note auction (91282CNH0) cut-off at 1300ET.
• 3Y WI is currently at 3.967%, 14.3bp cheap to last month's stop: 3.824% high yield vs. 3.826% WI

Tuesday's Europe rates/bond options flow included:

• DUQ5 107.2/107.1/106.9 put ladder paper paid 0 for the 1 on 5K.
• ERQ5 98.37c, bought for 1 in 6k
• ERU5 98.875 calls see 5K trading at 0.25, volume at that price up to 11.5K on the day
• ERU5 98.125^ trades 15 in 5K all day paper to paper
• ERZ5 97.81/97.93/98.50/98.62 call condor 3K given at 10.5
• ERH6 98.50/98.25/97.75p fly bought 2.75 in 5k
• SFIU5 95.90/95.75/95.60 put fly 12K given at 1.25
• SFIZ5 96.15/96.00 put spread 15K given at 4.25