Daily Flows

• Yesterday, 4.85% was the standout rate for 6-month term deposits.
• Fixed income trading remained volatile, with bid-offer spreads widening as margins blew out and senior 5-year paper trading margins hit triple digits.
• Some calm has returned to markets today, following Trump’s announcement to pause parts of his tariff plans.

U.S. Treasury Bonds Sell Off – The Final Straw?

• It appeared Trump was unbothered by the sea of red in equities, spending the weekend on the golf course and standing firm all week.
• However, the sell-off in U.S. Treasuries may have been the final straw, prompting the White House to act.
• U.S. Treasuries are a global benchmark safe haven asset, critical to the functioning of both the U.S. and global financial systems.
• A 50 basis point spike in U.S. 10-year yields over just a few days is deeply concerning, particularly for the U.S. debt issuance program.
• While it’s difficult to confirm causality, this pressure may have been a key factor behind Trump’s decision to announce a 90-day pause on reciprocal tariffs, helping to ease global growth concerns—at least for now.