Key Takeaways
- The U.S. Treasury set its quarterly refunding at $125 billion, keeping coupon issuance stable for the next several quarters despite shifting economic conditions.
- Reports of a draft agreement between the U.S. and Iran emerged via Pakistani sources, aiming to end hostilities and reopen the Strait of Hormuz.
- U.S. ADP private employment rose by 109,000 in April, missing the 120,000 estimate but showing growth over the previous month.
- AMD (AMD) and Super Micro Computer (SMCI) shares surged in pre-market trading following robust earnings beats driven by AI demand.
- EU trade relations remain strained as U.S. officials claim the bloc has failed to meet its tariff and non-tariff commitments.
The U.S. Treasury Department announced its quarterly refunding plan on Wednesday, setting the total at $125 billion, a figure that aligns with market expectations. The refunding includes a $58 billion 3-year note auction on May 11, a $42 billion 10-year note auction on May 12, and a $25 billion 30-year bond auction on May 13. Treasury officials indicated that coupon issuance is expected to remain stable for at least the next few quarters, providing a sense of predictability for bond markets.
On the geopolitical front, Pakistani sources reported that the U.S. and Iran are closer to signing a preliminary agreement to end the current war. The draft agreement reportedly includes a timetable for ending all hostile actions and reopening the Strait of Hormuz to international navigation. However, President Trump tempered the optimism, stating it is "too soon" to begin preparations for a peace signing or face-to-face negotiations, while Iranian sources characterized recent media reports as an "American wish list."
Economic data released Wednesday morning showed the U.S. ADP Employment Change for April came in at 109,000, missing the consensus estimate of 120,000. While the figure was lower than expected, it marked an increase from the revised 61,000 jobs added in March. Market participants are closely watching these labor figures as a precursor to the official non-farm payrolls report due later this week.
In the corporate sector, AMD (AMD) shares skyrocketed 21% in pre-market trading after the company reported an earnings and revenue beat, fueled by accelerating data center growth and strong GPU shipments. Super Micro Computer (SMCI) followed suit, rising 15% on a significant profit beat and a stellar outlook for AI server demand. Meanwhile, pharmaceutical giant Eli Lilly (LLY) initiated a benchmark 8-tranche bond sale to capitalize on current market liquidity.
Trade tensions between the U.S. and the European Union have resurfaced, with trade official Greer stating that the EU's tariff and non-tariff commitments have not yet come to fruition. Greer noted that the EU has had "plenty of time" to meet these promises. Simultaneously, German Foreign Minister Wadephul warned that the EU's unanimity rule is a threat to the bloc’s existence, advocating for qualified majority voting to allow for faster decision-making in foreign policy.
Finally, Sweden's government revised its 2026 GDP growth forecast downward to +2.3%, from a previous estimate of +2.8%. In Germany, the Economy Ministry confirmed positive discussions with multiple nations, including Israel, regarding future energy supplies, even as the government maintains that vaccine supplies for the domestic population remain assured.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.