Last Week on the Tape
Jobs cooled. Soft June print, rotation out of growth; front end bid, bull-steepener. Labor softening, not cracking.
Crude got crushed. WTI $68.5 / Brent $71.6, ~−28% MoM as the Iran-war premium unwound — real headline disinflation, core still 2.9%.
Rates: 2Y 4.18, 5Y 4.25, 10Y 4.49, 30Y 4.98. 2s10s +31bp, 2s30s +80bp. 1Y 3.94 (−5bp). Policy 3.75%.
Credit shrugged: IG 5.20% / 75bp OAS, HY 6.98% / 275bp — firm. LQD +0.4%, HYG +0.5%.
Cross-asset: Gold $4,185, dollar soft (EUR 1.144, JPY 161.4), commodities lower. Dovish tone, contained risk.
Rate, spread, and cross-asset data via Koyfin (as of Fri Jul 3, 2026 close). Trade data via MSRB EMMA. Charts: The Bond Bro.
The Pressure Gauge — Composite: MODERATE
Front-End / Policy — easing bias building — 4/10 ↓
Term Premium / Long End — sticky, 30Y won't rally — 7/10 ↑
Credit — IG 75 / HY 275, firm — 2/10 →
Inflation — core 2.9 sticky, crude −28% — 5/10 ↓
Growth / Labor — softening, not cracking — 5/10 ↓
Cross-Asset / Risk — contained — 3/10 →
Pressure isolated at the long end against a low-stress backdrop. Expression unchanged: paid the front rally, respect the term-premium bid, own the steepener.
This Week — The Setup Does crude + soft labor finally drag the long end, or does term premium keep the 30Y cheap? Watch: long end vs. crude (the term-premium tell), post-jobs Fed-speak on the 2% timeline, long-end supply concession (swing for 2s30s past +85bp), CPI/PCE against a crude-softened headline / hot core.
The Desk Scan
Corps: IG 5.20% / 75bp (A 63, BBB 94), HY 6.98% / 275bp (BB 164, B 296). Carry-friendly, no widening.
Munis: MUB firm/richening; ratios tighter on front. Structured/prepay = value.
Agencies: AGZ bid, spreads stable; MBB/GNMA firm on duration demand.
Securitized: IG structured firm; BKLN soft as floating carry compresses.
Rate, spread, and cross-asset data via Koyfin (as of Fri Jul 3, 2026 close). Trade data via MSRB EMMA. Charts: The Bond Bro.
Sector in Focus: Munis — Energy Prepay Black Belt 2024A (5.25% '55, tender 9/1/32) trading low-103s on real size ($12mm/$5mm blocks, no distribution) → ~4.55% YTW to tender. Credit is Athene (funding recipient; claim senior to holdco, A1 IFS). ~4.55% tax-free ≈ 7.6% TEY @40% — inside Athene's own ~6y taxable funding-agreement paper. ~200bp+ TEY pickup, structurally more senior, cheaper in muni form. Widens with financial stress (retail dumps "gas bonds"), insurance tier widens most — the beta entry and the richest RV at once.
Full PDF https://tinyurl.com/Dispatch070526