US: US House Passes Budget Resolution, Tsy Yields Firm
The US House, controlled by the Republicans, narrowly passed a budget blueprint, which could help Trump's tax cut and other spending related agenda. Other parts of government spending are expected to be cut, while the debt ceiling would also be raised.
BBG noted: "The House budget would pave the way for $4.5 trillion in tax cuts — about enough to pay for extending the expiring cuts but not enough to also cover Trump’s campaign promises for additional tax relief. The measure would add to the budget deficit despite calling for $2 trillion in overall spending cuts over ten years. The blueprint would raise the US debt limit by $4 trillion, avoiding a potential payment default this summer."
They added: "The vote doesn’t guarantee an extension of the expiring 2017 Trump tax cuts. The Senate plans to make changes to the House blueprint before passing it and that could raise new objections among House Republicans."
- There is still some way for this to all become law, but it is seen as a positive step for Trump's agenda. US yields have ticked up from earlier lows, last around +2bps (versus end Tuesday levels) across some of the key benchmarks. The 10yr is back near 4.32%, after earlier being at 4.28%. the USD has recovered some ground as well, last up a touch, to 1285.35 for the BBDXY, USD/JPY has risen back towards 149.25/30.
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