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Commerzbank Says Treasuries Lose Momentum, Oil Prices Higher

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Treasuries lost momentum late in New York on Monday and in Asia early Tuesday due to a lack of details on the US debt management strategy, according to Commerzbank Research in a note.

Treasury Secretary Scott Bessent said the US will maintain its quarterly refinancing schedule, adding that "you will be hearing from us again at the beginning of next quarter." Bessent provided no further details on fiscal policy, the bank said.

Bessent launched "Operation Economic Outcast," aimed at the "total isolation of the Iranian regime". International entities facilitating transactions involving Iranian oil could be cut off from the US financial system, as both primary and secondary sanctions are set to expand.

Iran, meanwhile, says it has a two-year plan and is fully prepared to withstand the pressure, added Commerzbank.

President Donald Trump said Canada must "fall in line" or risk facing economic consequences after trade talks between the two countries collapsed. Canada is reported to announce retaliatory measures on Tuesday, said the bank.

Equities are little changed, while oil has recovered from Monday's lows, according to Commerzbank. The US dollar remains well supported.

In Europe, Germany's center-left SPD, which is part of the ruling coalition, is opposing austerity measures ahead of Tuesday's cabinet retreat. France and Saudi Arabia are set to make an "unprecedented announcement" on a six billion euros investment in theme parks near Paris.

EU foreign policy chief Kaja Kallas said the bloc plans to propose tougher sanctions on Russia this fall. British Prime Minister Andy Burnham is also due to visit President Trump next month to lobby for access to Patriot air-defense systems for Ukraine.

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