No Debt Deal Yet

Treasury futures remain weaker but off midday lows (10Y at 114-30.5 -9, yield 5.5376 +.0358), curves flatter (2s10s -2.560 at -53.833) after maintaining steeper profile in the first half.

• Weaker stocks contributing (SPX Eminis 4128.0 low) to the general risk-off tone as markets fret over debt ceiling, Jake Sherman, Punchbowl News tweeting: "Speaker McCarthy says the debt limit deal MUST include something on work requirements. He said it’s a red line for him."
• President Biden meeting with congressional leaders (McCarthy, Schumer, McConnell and Jeffries) to discus the debt limit at this moment. Biden still expected to leave for G7 summit in Japan tomorrow.
• Additional factors weighing on rates: nominal retail sales levels remain well above early 2021 levels, but that appears to be largely the effect of inflation - and April's Y/Y nominal growth was also the slowest since the contractions of 2Q 2020.
• Corporate bond issuance, rate lock sales: $31B Pfizer 8pt jumbo (helping finance $43B Seagen deal) is the fourth largest on record.
• Fed-speak all generally in-line with recent comments, latest from Atlanta's Barkin: support for holding rates but remains open to hikes if data warrants.