US: Trump Says Reconcillation Bill "Coming Along Well" Ahead Of 2nd Budget Vote
Apr-10 13:04
President Donald Trump said in a statement on Truth Social the, "Big, Beautiful Bill" is "coming along really well" ahead of House Speaker Mike Johnson's (R-LA) second attempt at passing a Senate-approved budget blueprint to underpin Trump's tax and spending agenda.
- Trump added: "Republicans are working together nicely" downplaying a rebellion by conservative Republicans that forced Johnson to abandon a budget vote yesterday.
- Johnson is expected to sweeten the deal for conservatives today by delivering assurances from the Senate that they will pursue ~USD$1.5 trillion in spending cuts once the compromise budget framework is passed.
- Reminder: The House budget blueprint calls for USD$1.5 trillion in spending cuts across a range of government agencies. The Senate blueprint calls for just USD$4 billion in cuts. Senate Republican leadership argue the low spending reduction target is primarily to conform with the rules of budget reconciliation; they will synchronise with the House in the final text of the legislative package.
- House conservatives don’t buy it. They believe, not without some justification, that Senate Republicans have less appetite for spending cuts that could slash popular safety net programmes like Medicaid and SNAP.
- To compound House Republican concern, Senate Republicans have endorsed using a ‘current policy baseline’ to score renewing the 2017 Tax Cuts and Jobs Act at $0. House conservatives have panned this move as an accounting trick that will balloon the deficit.
- The baseline expectation is that Trump and Johnson will ultimately strongarm House conservatives into line, but it will be close.
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NOK: USDNOK Eyeing Trendline Support, Norges Bank March Decision Uncertain
Mar-11 13:03
USDNOK has pierced support at 10.6605, the 76.4% retracement of the September 2024 – January 2025 rally. Clearance of this level would expose trendline support drawn from the December 2022 low at 10.5454, which shields 10.3916 (the Sep 25, 2024 low). The pair is on track for a seventh consecutive session of lower lows, underscoring recent bearish momentum. This is the longest such streak since June 2023.
- The pullback in USDNOK from the Feb 28 high of 11.2885 had mostly been a function of USD weakness on heightened US growth concerns, until yesterday’s stronger-than-expected Norwegian February inflation report added pressure via the NOK leg.
- Today’s NOK strength could reflect some carry-over from yesterday’s data, which has reduced the market implied probability of a 25bp Norges Bank rate cut on March 27 to around 50% (from essentially 100% a few weeks ago).
- However, 2-year NOK swap rates are little changed today, suggesting the 1.2% recovery in brent crude futures is also supporting the krone.
- With the March Norges Bank decision now uncertain, focus for markets turns to the outcome of the 2025 wage bargaining rounds (the Technical Calculation Committee for Income Settlements is set to release a revised inflation estimate today, which will form a basis for negotiations) and the Q1 Regional Network Survey on March 20.
Figure 1: USDNOK
GILT SYNDICATION: 1.875% Sep-49 I/L gilt: Priced (additional details)
Mar-11 12:55
- Reoffer: 97.142 to yield 2.0234% (real)
- Spread set earlier at 0.125% Aug-48 linker (GB00BZ13DV40) + 1.0bp (Guidance was +1.0/1.5bps)
- Size: GBP5.0bln (larger than the GBP4.0-4.5bln MNI expected) - MNI note: This is the largest ever gilt linker syndication
- Books in excess of GBP67.5bln (inc JLM interest of GBP4bln) - MNI note: That is the largest ever book for a gilt linker syndication
- HR : 90% vs 0.125% Aug-48 linker (spot ref 64.880)
- Maturity: 22 September 2049
- ISIN: GB00BT7J0134
- Coupon: 1.875%, long first
- Settlement: 12 March 2025 (T+1)
- JLMs: BofA Securities, J.P. Morgan, Lloyds Bank Corporate Markets (B&D/DM), and UBS Investment Bank
- Timing: TOE 12:47GMT, FTT immediately
From DMO / market source / MNI colour
MNI: US REDBOOK: MAR STORE SALES +5.7% V YR AGO MO
Mar-11 12:55
- MNI: US REDBOOK: MAR STORE SALES +5.7% V YR AGO MO
- US REDBOOK: STORE SALES +5.7% WK ENDED MAR 08 V YR AGO WK
