US Treasury Sees Borrowing Needs Fall

April 28th MTR Subscriber Data Tracker

The US Treasury released its borrowing estimates and the headline numbers seem worse than what they really are. The US Treasury expects to borrow $514Bn for Q2. This is about $391Bn higher than the treasury’s estimate a few months ago, which seems like a big borrowing need.

However when you dig deeper this amount is much higher but because of the drawdown in the TGA primarily, the general account. In its endnotes, the US Treasury actually stated that the quarterly borrowing estimate is $53Bn lower than what was announced in February. So the US govt has done somewhat of a good job here thus far in 2025 in regards to overall spending it seems.

Maybe the US bond market took this as a decent sign of fiscal responsibility (cough) as yields fell once again yesterday. Here is the US yield curve on its settles from yesterday as the front end of the curve led the way with 2s dropping 7.7bp:

When we take a peek at the current US Govt 10Y chart, you can see yields are once again falling today and breaking back down into the down trend channel:

Let’s take a quick look at the Nasdaq and SP Futures, the Nasdaq has resistance at the 50sma at 19735 and weekly resistance at 19932 with initial support 19400. The tone is consolidative right now and 19000 magnet and pivot this week:

The SP500 futures are bullish above 5525 area which was our first initial resistance point off the bull/bear pivot and acting. 5525 is now initial daily support, with 5639 the 50sma resistance level and 5721 above there, this also looks a bit consolidative as opposed to a sustained push higher for now:

We talked about SoFi earnings yesterday and a potential for a push above the $13.50 area. SoFi saw better than expected earnings especially their financial services sector which grew 101% to $303m in the quarter, we like the prospects for this stock going forward and today, saw a trade as high as $14.51 before sellers came in:

After the close today we have Visa, Snap and Starbucks, so make sure you guys if your playing take a look at the breakevens to determine what the options markets are saying about the potential moves. For today let’s break down Starbucks (SBUX), we will use the at the money (ATM) $84 strikes to price the straddle (buying both the Put and the Call) it is trading $6.30 indicating a 7.5% move. We are kinda leaning toward the call structures, we like what Brian Niccols has done with the company and but like any new change, things take time to turn around. This will be a good test for the company and if we are bullish, we can take a look at the call spreads and the 285/290 call spread is trading $1.73. So this represents a 1.9x payoff at full value. This is for the Friday expiration.

Ok good luck today out there, the markets seem to be consolidating off the lows equity wise, the bond markets have also stabilized and have seemingly reasserted their downward trajectory. All in all seems pretty quiet out there until the next Tariff news drops, but that’s what we all have come to expect now, so its this adjustment period we suppose.

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