July 1 (Reuters) - The opinions expressed here are those

of Dhara Ranasinghe, Editor, Financial Markets, EMEA.

All eyes remain focused on Washington, with Senate

Republicans still locked in a marathon session, known as

"vote-a-rama", as they try to pass a contentious tax cut and

spending bill that could add trillions of dollars to the

country's already high debt load.

This hasn't helped the dollar, which is languishing at its

lowest levels against the euro in almost four years, as the

fiscal bill keeps debt worries front and center for global

investors.

Mike Dolan is enjoying some well-deserved time off over the

next two weeks, but the Reuters markets team is here to provide

you with all the information you need to start your day.

Today's Market Minute

* U.S. Senate Republicans were still trying to pass

President Donald Trump's sweeping tax-cut and spending

bill early on Tuesday morning, despite divisions within the

party about its expected $3.3 trillion hit to the nation's debt

pile.

* President Trump suggested on Tuesday that the government

efficiency department should take a look at the subsidies that

Tesla (TSLA.O), opens new tab CEO Elon Musk's companies have

received in order to save money.

* President Trump expressed frustration with U.S.-Japan trade

negotiations on Monday as Treasury Secretary Scott Bessent

warned that countries could be notified of sharply higher

tariffs as a July 9 deadline approaches despite good-faith

negotiations.

* There has been much discussion of the so-called "Trump put"

for equities, but perhaps more attention should be paid to the

administration's effective "Treasury Put", claims Stephen Jen,

CEO and co-CIO of Eurizon SLJ asset management.

* U.S. power sector emissions are already at their highest

levels in three years, writes ROI columnist Gavin Maguire, but

they are likely to climb even higher in the coming months.

Vote-a-rama is still going on

Senators are voting in a marathon session featuring a series

of amendments by Republicans and the minority Democrats, part of

the arcane process Republicans are using to bypass Senate rules

that normally require 60 of the chamber's 100 members to agree

on legislation.

It is unclear how long the voting, which started on Monday,

will last.

What's interesting is how financial markets are reacting to

developments on the Hill.

As mentioned above, the latest signs of U.S. policy

uncertainty and concern about ever-rising deficits are weighing

on the dollar.

Now look at bond markets, which have been notably quiet in

the face of fiscal worries.

The nonpartisan Congressional Budget Office released its

assessment on Sunday of the bill's hit to the $36.2 trillion

U.S. debt pile. The Senate version is estimated to cost $3.3

trillion, $800 billion more than the version passed last month

in the House of Representatives.

So, where have the so-called bond vigilantes gone?

One explanation is that attention, for now, has returned to

inflation and growing expectations that Federal Reserve interest

rate cuts will come sooner rather than later.

And on that point, U.S. President Donald Trump on Monday

continued to pressure Fed chief Jerome Powell to cut rates.

Goldman Sachs reckons the Fed will deliver three rate cuts this

year.

With markets pricing in roughly two quarter-point rate cuts

by year-end, bond investors, it appears, are happy with U.S.

10-year yields at around 4.2% - the lowest in around

two months.

The other point for bond markets, with regards to the bill,

is that even if it is passed by Trump's July 4 deadline, a debt

ceiling increase in the bill does not become an issue until

later in the summer.

Generally upbeat sentiment in stock markets meanwhile - note the

S&P 500 and Nasdaq hit record closing highs on Monday - could be

put to the test by signs that efforts to secure trade deals may

be stalling.

Trump expressed frustration with U.S.-Japan trade negotiations

on Monday, as Treasury Secretary Scott Bessent warned that

countries could be notified of sharply higher tariffs as a July

9 deadline approaches despite good-faith negotiations.

Chart of the Day

The U.S. dollar index, which measures its value against a

basket of other major currencies, is down almost 11% so far this

year.

In fact, the dollar has suffered its biggest first-half dive

since the early 1970s.

While the currency is expected to remain the world's No.1.

reserve currency for some time to come given the size of the

U.S. economy and the unrivalled depth of its capital markets,

sentiment towards the dollar has taken a hit this year against a

backdrop of concern about erratic U.S. policy making, trade

tensions and worries about Fed independence.

Today's events to watch

* ISM June data

* JOLTS May job openings

* Federal Reserve Chair Jerome Powell speaks at ECB forum

* Constellation Brands earnings results