LATAM FX: USD Index Extends Recovery, Local Currencies Suffer

• Stocks are mixed late Monday, off second half lows as markets trade in a quiet narrow session range. Currently, the DJIA trades up up 69.08 points (0.17%) at 40181.55, S&P E-Minis down 7.25 points (-0.13%) at 5542.75, Nasdaq down 66 points (-0.4%) at 17316.22.
• On the positive side, Energy and Utility sector shares led gainers in late trade: Eversource Energy +2.11%, EQT Corp +1.90%, Vistra Corp +1.60%, AES Corp +1.49% and Evergy +1.40%.
• Separately, pharmaceutical and health care stocks traded firm with Centene Corp +3.00%, AbbVie +2.92% and Gilead Sciences +2.65%.
• Paring last week's gains, Information Technology and Consumer Discretionary sectors continued to underperform in the second half, semiconductor makers weighing on the IT sector: NVIDIA -3.17%, Micron Technology -2.18%, Zebra Technologies -1.85%, First Solar -1.74% and QUALCOMM -1.42%.
• E-commerce and autos weighed on the Discretionary sector with Tractor Supply -2.70%, eBay Inc -1.85%, Chipotle Mexican Grill -1.44%, Amazon.com -1.36% and Tesla -1.24%.
• Expected earnings announcements after today's close: Alexandria Real Estate, Cadence Design, SBA Comm, Crown Holdings, Welltower, Solaris Energy, Noble Corp, Brown & Brown, Nucor Corp, Teradyne Inc, Universal Health Services, EZCORP and Waste Management Inc.

• Treasury futures extend gains after Tsy financing estimate released (raising current quarter by $391B to $514B), final recommended financing levels release this Wednesday at 0830ET.
• Jun'25 10Y currently +13 at 111-29.5, through resistance of 111-25 (50.0% retracement of the Apr 7 - 11 bear leg) -- focus on next level at 112-12, the 61.8% retracement point.
• Cross asset: BBG US$ index drifting lower to 1220.19 (-5.86); stocks bouncing off second half lows: S&P eminis -8.0 at 5541.75.

Treasury's latest borrowing / financing requirements estimates were slightly higher - but broadly in line with - MNI's estimates: $514B for the Apr-Jun quarter, and $554B for the Jul-Sep quarter (MNI had pencilled in $500B for each quarter).

• Financing needs are -$17B for Apr-Jun (MNI estimated -$14B) with $480B in Jul-Sep (MNI: $430B).
• The assumption that Treasury would maintain its end-quarter cash balance target of $850B proved correct.
• The Apr-Jun borrowing estimate was indeed raised significantly (by $391B) but this was entirely a function of the required cash raise as we discussed earlier today. As Treasury points out, "excluding the lower than assumed beginning-of-quarter cash balance, the current quarter borrowing estimate is $53 billion lower than announced in February.