Expect Volatility with a Negative Skew: 3-Minutes MLIV

Summary

Mark Cudmore tells the panel that Treasury Secretary Bessent's fiscal remarks will be scrutinized after last week's bond-market intervention and deficit-peak comments. He does not expect Fed Chair Warsh to deliver market-moving yield commentary, saying any yield mention would signal panic. He expects a more volatile week, driven by the US-Canada trade war, Iran, airspace issues and possible Treasury-yield breakout, with volatility carrying a slight negative tone for risk appetite.

• Bessent's fiscal comments expected under scrutiny after bond market intervention and deficit-peak statements.
• Warsh unlikely to comment on yields; a mention would be a big market impact.
• Multiple brewing themes have potential tipping points this week.
• US-Canada trade war, Iran, and airspace issues are cited as volatility catalysts.
• Treasury yields flagged as possible breakout risk.
• Underlying macro backdrop remains supportive, but volatility may weigh on risk appetite.