Fixed Income Morning Economic Report, 7-9-26

A firmer start to the day for fixed income, after a relatively rangebound APAC session on account of the lack of energy follow-through to the tit-for-tat strikes by the US and Iran overnight, with the narrative potentially being that the strikes are no more of an escalation than what we saw on Tuesday night.

Overnight, USTs trade around 108-29 down 3 ticks with a 109-03+ to 108-27 range while the SFRZ6 is at 95.95 UP 1 basis point to imply an 82% chance of 2 hikes by year end. In the early European morning, US President Trump said Iran “called a while ago” and they “want to make a deal”, however, the indication that contacts, likely via mediators but unconfirmed, have occurred allowed energy to pull back and with the first of the World Cup Quarter finals on the card I expect the focus to be on that for the rest of the day.

On the docket today (CT); 7:30 am Initial jobless claims July 8:00 am New York Fed President John Williams speaks 9:00 am Existing home sales June 12:30 pm Dallas Fed President Lorie Logan speaks 3:00 pm France Vs Morrocco WCQF