FOREX: USDCAD Completes Round Trip Following Stellar Employment Report

• Treasury futures are holding near this morning's post-CPI data highs (TYU5 +11.5 at 110-18) ahead of the $39B 10Y Note auction re-open (91282CNC1) at the top of the hour, WI currently 4.430%, 8.8bp cheap to last month's stop.
• May auction recap: Treasury futures gained (TYM5 +6 at 111-08, 4.3257% yld) after the $42B 10Y note auction (91282CNC1) stopped 1.3bp through: drawing 4.342% high yield vs. 4.355% WI; 2.60x bid-to-cover vs. 2.67x prior.
• Peripheral stats: indirect take-up retreats to 71.19% vs. 87.90% prior; direct bidder take-up rises from last month's record low of 1.4% to 19.88%; primary dealer take-up 8.93% vs. 10.7% prior.
• The next 10Y auction (re-open) is tentatively scheduled for July 9.

The Financial Times reporting that the US Department of Defense, led by Under Secretary of Defence for Policy Elbridge Colby, "has launched a review of the 2021 Aukus submarine deal with the UK and Australia to determine if the US should scrap the project."

• FT notes: "Ending the submarine and advanced technology development pact would destroy a crucial pillar of security co-operation between the allies, at a time of heightened tension with China. The review has triggered anxiety in London and Canberra."
• Colby told the Sydney Morning Herald in August last year: “Even in the last couple of months, I would say that my views on AUKUS have become a bit more receptive. I would describe myself as maybe an AUKUS agnostic. I’m not an atheist, which is to say I’m prepared to be convinced in the existence of the pot of gold at the end of the rainbow, but I have not seen the weight of compelling evidence thus far.”
• Breaking Defence reported yesterday that the UK government announced on Tuesday, "a more than $8 billion investment for two major production sites set to build and deliver “up to” 12 nuclear-powered attack submarines (SSNs) under the trilateral AUKUS program."
• The Guardian notes that UK Prime Minister Keir Starmer said, following the release of a Strategic Defence Review last week, that the Aukus submarines are critical for the UK’s defence, and declaring "a landmark shift in Britain’s deterrence and defence..."

• Date $MM Issuer (Priced *, Launch #)
• 06/11 $4.2B #Brown & Brown 6pt: $400M 1.5Y +65, $500M 3Y +80, $800M 5Y +92, $500M 7Y +107, $1B 10Y +117, $1B 30Y +135
• 06/11 $Benchmark Citadel Securities 5Y +180a, 10Y +200a
• 06/11 $Benchmark Export Development Canada (EDC) 5Y SOFR+45a
• 06/11 $700M Unisys 5.5NC2.5