US TSYS: Sentiment Sours on Middle East Tensions, Cease Fire Tested
May-04 19:33
Treasuries look to finish weaker Monday, early headlines reporting UAE intercepted missiles saw Treasuries extending session lows with equities and gold while crude and the US$ gained (BBDXY +1.70 at 1195.08). WTI crude, June contract trades around $105.22/bbl; stocks decline: DJIA -1.05%, SPX & Nasdaq -.%-.4%.
BBC reported an unnamed Iranian military source has warned that all United Arab Emirates interests could become legitimate targets if Abu Dhabi takes action against Iran, the IRGC‑linked Tasnim News Agency reported on 4 May.
TYM6 currently -13 at 110-07.5 vs. 110-00.5 low, continued weakness would expose the bear trigger at 109-24, the Mar 27 low. Clearance of this support would confirm a resumption of the downtrend.
Robust volumes (TYM6 over 1.7M) given Japan out for national holiday, much of Europe too for spring holiday. Projected rate pricing inches hawkish vs. late Friday lvls (*): Jun'26 at -0.7bp (-1.9bp), Jul'26 at -1.6bp (-2.9bp), Sep'26 at -0.5bp (-2.9bp), Oct'26 at +3.4bp (-3.4bp), Dec'26 +8.1bp (-1.3bp). April 2027 rises to near +20bp late Monday.
U.S. monetary policy is "well positioned" to balance rising risks to the Federal Reserve's maximum employment and price stability goals from tariffs, supply chain disruptions and heightened uncertainty from the Iran war, New York Fed President John Williams said Monday.
The U.S. Treasury Department on Monday announced it expects to borrow USD189 billion in privately held net marketable debt in the second quarter, USD79 billion more than previously announced in February due to lower projected cash flows. Officials expect to borrow USD671 billion in the third quarter.
US TSY FUTURES: BLOCK: Large Jun'26 2Y Buyer
May-04 19:31
+12,000 TUM6 103-14, buy through 103-13.75 post time offer at 1512:18ET, DV01 $453,000.
The 2Y contract trades 103-13.88 last (-4)
BOC’S MACKLEM HOUSE TESTIMONY ECHOES LAST WEEK’S RATE DECISION
May-04 19:30
BOC’S MACKLEM HOUSE TESTIMONY ECHOES LAST WEEK’S RATE DECISION
MACKLEM SAYS BOC CAN HOLD RATE, AND HIKE IF CPI PERSISTS