After a solid 2Y auction and a subpar 5Y auction earlier this week, moments ago we got the week's final Treasury issuance when the US auctioned off $44BN in 7Y paper in a perfectly average sale.
Starting at the top, the bond priced at a high yield of 4.260%, down modestly from 4.290% last month and in the middle of a range established in late-2023 after which the 7Y has traded between 3.50% and 5%. The auction also priced on the screws with the When Issued which was also at 4.260.
The bid to cover was 2.498, just under last month's 2.516 and on top of the 6-auction average of 2.488%.
The internals were a bit weaker: after Indirect bidders took down a record 78.4% in May, today their demand crashed to earth and foreign buyers ended up taking down just 57.55%, the lowest since Sept 26. And with Directs taking down 29.7%, a big jump from 11.2% in May but in line with the recent average, Dealers were left holding 12.75%, up from 10.42% a month ago and the highest since November.
Overall, this was a average-to-weak auction, with sufficiently good metrics even if the internals were a bit on the weak side. Not that the market cared (about this, or anything else); with 10Y yields extending their drop all day today, the meh auction barely registered.
Tyler Durden Thu, 06/25/2026 - 13:24
A federal judge on Wednesday permanently blocked key portions of President Donald Trump’s executive order overhauling federal election procedures, ruling that the president exceeded his constitutional authority by attempting to impose new voting requirements without congressional approval.
U.S. District Judge Denise Casper, an appointee of former President Barack Obama, concluded that the Constitution gives primary authority over elections to the states and Congress, not the executive branch.
The ruling makes permanent a preliminary injunction Casper issued last year in a lawsuit filed by Democratic attorneys general from 19 states.
“While the Constitution vests the President with ‘executive Power’ and commands him to ‘take Care that the Laws be faithfully executed,’ it does not grant the President any specific powers over elections,” Casper wrote.
“As a result, the President ‘plays no direct role in the process of appointing electors,’ nor does he have authority to control the state officials who do,” she added.
Trump’s executive order sought to require documentary proof of U.S. citizenship to register to vote, prohibit states from counting mail ballots received after Election Day even if postmarked on time, and withhold certain federal funds from states that declined to comply.
Casper ruled that the administration lacked the authority to impose those changes through executive action.
In her 59-page opinion, the judge also rejected the administration’s justification for the order, writing that the Justice Department failed to establish the widespread election problems it cited in defending the policy.
“There is no evidence in this record of widespread ‘illegal voting, discrimination, fraud, and other forms of malfeasance and error’ within American elections, which the Executive Order purports to safeguard against,” Casper wrote.
The judge also concluded that the order would have disenfranchised thousands of voters.
The decision is another legal setback for the administration’s efforts to repair federal election procedures. Courts have repeatedly blocked or limited several election-related initiatives advanced during Trump’s second term.
Additional lawsuits are challenging a separate executive order aimed at creating a nationwide voter database and tightening mail voting requirements. Earlier this week, another federal judge blocked the administration’s attempt to use an immigration database to verify voter rolls, while courts have also rejected Justice Department efforts to obtain state voter registration records.
Despite the court rulings, Trump has continued urging Congress to enact proof-of-citizenship requirements through legislation.
The Republican-backed SAVE America Act passed the House but remains stalled in the Senate.
Trump renewed that effort Wednesday, saying he would withhold his signature from a bipartisan housing bill until Congress approves voter citizenship verification requirements.
Tyler Durden Thu, 06/25/2026 - 13:20By Molly Schwartz, cross-asset strategist at Rabobank
A river in EgyptScott Bessent took to CNBC’s Squawk Box yesterday to opine on the situation with Iran. Bessent echoed Trump’s comments that any released Iranian assets are to remain under US Treasury oversight and are restricted to use for food and medicine. However, money is fungible, and any released cash that is used to help civilians may mean more cash from other places that can be used to support the IRGC’s interests
Bessent’s comments also called attention to another philosophical outlook on the war and the Administration’s initially stated— though seemingly not truly intended—goal of regime change. This is where the waters gets murky, and where we can climb into our Felucca and begin our journey along a river in Egypt, drifting, perhaps, into a bit of strategic “denial” about what regime change actually means. If, hypothetically of course, Operation Epic Fury succeeded in asserting regime change in Iran, where does the US go from here? If the new Ayatollah says he is willing to table plans of further enriching uranium and wants to align itself with US interests, should the US just keep firing missiles? Do you keep Iranian assets under lock and key, even if the regime has shown you that it has changed?
.@SecScottBessent: "Dollar dominance is essential, and everything @POTUS is doing here — if you look, the new Venezuela... the dollar is going to be the centerpiece of their trade... We're seeing in the Iranian negotiations, the Iranians will be invoicing in dollars. Everything… pic.twitter.com/5IsPYo8aSh
— Rapid Response 47 (@RapidResponse47) June 24, 2026Bessent said himself, “we didn’t have a regime change, but we have changed the regime.” If that is the genuine perspective of the Trump Administration, then the deal may not be as bad for the US as many perceive it to be. As our Global Strategist, Michael Every, has noted on multiple occasions, show of strength means everything in the arena of Middle Eastern geopolitics. There is a possibility that the current hardliners in the IRGC aren’t actually so hardline anymore, but are only presenting as such. Note that this is not a new base case for our outlook by any means (you can read more about our Hormuz outlook here), but food for thought.
If the regime truly has changed, this also could have big implications for USD dominance. Bessent noted that a born-again Venezuela is shifting back towards USD invoicing, and that post-deal Iran is likely to do so as well.
Brent crude oil fell below $75/bbl for the first time since the war in Iran began, sending US Treasury markets into a tailspin. US 2-year yields dropped almost 6bp to 4.21, while the 10-year sunk almost 10bp—the largest one-day downward move since October 2025. With “peace in the Middle East,” the case for hikes is losing water by the day, with the market now pricing in 27bp worth of hikes by October, and only 40bp worth of hikes at the peak—a significant downgrade from Monday, when two full hikes had been priced in by the April 2027 FOMC decision.
Such a dramatic move in rates would normally suggest a weaker dollar, but USD was actually the best-performing G10 currency on a one-day view and the best month-to-date. The DXY index continued its climb from last week’s FOMC meeting to 101.6—the highest level since May 2025. Meanwhile, EUR/USD broke below crucial support at 1.14, fueling additional EUR selling, with the pair trading at 1.1356 at the time of writing. While the following appears to be more of an instance of correlation rather than causation, it is also important to note that yesterday’s move coincided with comments from Bessent—perhaps another slow turn of the Felucca—that USD can remain strong even when interest rates are being cut.
While USD is soaring, JPY is plummeting. USD/JPY spent the day yesterday approaching the July 3, 2024 high of 162, with the 14D RSI at 71.83 suggesting that USD/JPY is overbought. According to Bloomberg, Bessent and Japanese Finance Minister Katayama spoke over the phone, with Katayama telling reporters that “she and Bessent agreed to take ‘bold’ steps on currencies if needed,” and said the nations are increasingly “aligned” on foreign-exchange policy.
The Bank of Canada released its Summary of Deliberations from the June 10 decision, written on papyrus. Recent Canadian economic data suggest that the Canadian economy has slipped into a technical recession, with two consecutive quarters of negative quarterly growth. The Governing Council piled into a felucca of their own, racing up de Nile, justifying that higher-frequency data suggest a “resumption of growth in the second quarter,” and that while the Canadian economy is weak, it is “not clearly in a recession.”
Tyler Durden Thu, 06/25/2026 - 12:40