OIL PRODUCTS: Mid-Day Oil Products Summary: Cracks Diverge On Day    

• USDJPY breaks through its intraday high, as just pointed taking its cue from the push lower in US Treasuries, US 10yr Yield is close to test the 4.80% level that held Yesterday.
• There isn't much in terms of resistance in the USDJPY at current prices, and we are seeing instead 158.87 High Jan 10  next.
• GBP, CAD, NOK, AUD are all testing their session lows, with broader offers also emerging against the NOK, CNH, NZD, CZK, and CHF.

Defense Secretary nominee, Pete Hegseth, will become the first of US President-elect Donald Trump’s Cabinet nominations to face Senate scrutiny when he appears before the Senate Armed Services Committee at 09:30 ET 14:30 GMT. LIVESTREAM

• Hegseth will receive a grilling from Democrats over personal misconduct allegations and a lack of managerial experience. Today's hearing will set the tone for upcoming hearings with other embattled nominees - Robert F. Kennedy Jr. (Health Secretary), Kash Patel (FBI Director), and Tulsi Gabbard (Director of National Intelligence) -  who are yet to have hearings scheduled.
• Key panel Democrat Senator Mark Kelly (D-AZ) said: “I'm interested in hearing about how [Hegseth's] experience has prepared him for the job of managing 3 million people and an $850 billion a year budget,”
• According to prepared remarks, Hegseth will argue that US national security will be bolstered by “someone with dust on his boots [at] the helm” of the Department of Defense, pledging to give "new defense companies" a better chance to win contracts, and rapidly deploy emerging technologies.
• If the Armed Services Committee votes to discharge Hegseth’s nomination to the full Senate, he can drop three Republican votes and remain on track for confirmation without requiring Democrat support.
• Data from Polymarket shows Hegseth has weathered an initial wave of opposition, with an implied probability of 85% of Senate confirmation.

Figure 1: Trump’s Defense Secretary, % Implied Probability of Confirmation 

Source: Polymarket

• US Tnotes found some support at the 4.80% Mark Yesterday, and while the street wait on the US CPI Tomorrow, PPI Today, some desks will again be watching the 4.80% level, tested a 4.8026% high and a 107.06 low in TYH5.

Looking further out and in case of upside traction in Yield, most Investors will be eyeing the big 5% level:

• 4.8500% = 106.30.
• 4.9000% = 106.20.
• 4.9500% = 106.10.
• 5.0000% = 106.00+.
• 5.0187% = 105.28+ (2023 high and highest since July 07).

(Chart source: MNI/Bloomberg):