FED: US TSY 29Y-11M BOND AUCTION: NON-COMP BIDS $41 MLN FROM $22.000 BLN TOTAL

• The Senate has confirmed Kevin Warsh to the Fed’s Board of Governors as widely expected, in a 51-45 vote.
• He is also expected to pass a separate and final vote to confirm him as the next Fed Chair tomorrow (per previous Politico reporting), having cut it fine before Jerome Powell’s tenure ended May 15.
• With Powell having indicated he will stay on the Board of Governors until the DoJ investigation "is well and truly over, with transparency and finality" (his Board position runs until Jan 31, 2028), leading dove Stephen Miran’s short stint as Fed Governor looks to have concluded for now.

Treasury futures remain weaker, near recent session lows (TYM6 110-02  -11,  yld 4.4539%) ahead of the $42B 10Y Note auction (91282CQQ7) at the top of the hour. WI is currently 4.456%, 17.4bp cheap to last month's (small) tail: 

• April auction recap: Treasury futures retreated (TYH6 -5.5 at 112-11) after the $42B 10Y note auction (91282CPZ8) tailed: drawing 4.282% high yield vs. 4.280% WI; 2.43x bid-to-cover vs. 2.45x prior - just off the 5-auction average of 2.47x.
• Peripheral stats: indirect take-up retreated to 65.32% vs. 74.45% prior; direct bidder take-up 23.88% from 12.83% prior; primary dealer take-up to 10.80% vs. 12.72% prior.

Continued uncertainty over the US-Iran endgame and lingering UK political risk drove European yields higher Tuesday for the second session this week.

• Continuing reports of a groundswell of support among Labour MPs for UK PM Starmer to resign weighed on Gilts again. Starmer himself helped steady yields briefly by stating his intention to remain in the position, while 100 MPs signed a letter backing the PM.
• But Gilts and EGBs continued to be weighed down by global dynamics, with US Treasuries continuing to sell off following firm US CPI and private payrolls data (and higher energy prices amid the US-Iran impasse).
• In European data, German's May ZEW survey was less bad than expected, while Italian IP was stronger than expected.
• On the day, Gilts underperformed Bunds, with the UK curve bear steepening and Germany's bear flattening.
• Periphery/semi-core EGB spreads continued to widen, with BTPs underperforming.
• Wednesday's schedule includes Eurozone GDP data and final April inflation reports (France, Portugal), with appearances by ECB's Lane and Lagarde, and BOE's Mann.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 6.7bps at 2.713%, 5-Yr is up 6.7bps at 2.815%, 10-Yr is up 6.1bps at 3.101%, and 30-Yr is up 4.8bps at 3.623%.
• UK: The 2-Yr yield is up 7.4bps at 4.538%, 5-Yr is up 9.6bps at 4.644%, 10-Yr is up 10.3bps at 5.101%, and 30-Yr is up 9.4bps at 5.767%.
• Italian BTP spread up 3.2bps at 76.7bps / Greek up 2.5bps at 72.3bps