FOREX: Risk Sensitive Currencies Plummet Amid Tariff Turmoil, AUD Falls 4.7%

Axios reporting that the Trump administration is holding direct talks with Hamas on the release of US hostages and a "broader end to the war" in Gaza - understood to include "a deal to release all remaining hostages and reach a long-term truce".

• Axios notes: "The talks — held by U.S. presidential envoy for hostage affairs Adam Boehler — are unprecedented. The U.S. had never before engaged directly with Hamas, which it designated a terrorist organization in 1997."
• The talks come after the first phase of the Gaza ceasefire deal expired on Saturday without an agreement on transitioning to the second phase - withdrawal of Israeli troops and transfer of remaining hostages - or extending the first phase.
• The Jerusalem Post report: "On Tuesday, [Israeli] officials estimated that if no agreement is reached between Israel and Hamas, Israel would return to fighting in Gaza in about a week and a half."
• The Axios report has since been supported by additional reporting from the Jerusalem Post and Kan. Amichai Stein at Kan notes that, "Israel has been updated on the discussions."
• According to JPost: "The talks focused on releasing American hostages - but also all hostages. The message to Hamas: Show goodwill - to enable discussions about the second phase as well."

• appr -30,000 (pit/Block) SFRM5 95.50/96.00/96.50 put flys, 26.0 vs. 96.005/0.10%
• -10,000 0QH5 96.06/96.31 1x2 call spds, 1.0 to 0.5 ref 96.62

• US TSY 17W BILL AUCTION: HIGH 4.180%(ALLOT 83.95%)
• US TSY 17W BILL AUCTION: DEALERS TAKE 26.04% OF COMPETITIVES
• US TSY 17W BILL AUCTION: DIRECTS TAKE 2.82% OF COMPETITIVES
• US TSY 17W BILL AUCTION: INDIRECTS TAKE 71.14% OF COMPETITIVES
• US TSY 17W BILL AUCTION: BID/CVR 3.42