AMERICAS OIL: Alberta to Propose New Pipeline to British Columbia

US Treasury Secretary Scott Bessent told the Washington Examiner that President Donald Trump may declare a ‘national housing emergency’ this fall to address rising house prices. The Washington Examiner notes that there hasn’t been a national housing emergency declared since the 2008 recession. 

• In recent weeks, Trump has repeatedly blamed Fed Chair Jerome Powell for stagnation in the housing market, arguing he’s harming American homeowners and buyers by keeping rates elevated, per Bloombe
• Griffin Funding notes in a post on Trump’s housing strategy: “The Trump housing market outlook in 2025 hinges on policies spanning immigration, tariffs, land use, mortgage finance, and tax incentives.
• “[Trump’s] approach centers on several key areas that could significantly influence housing dynamics: immigration reform, federal land use policies, international trade relationships, and potential changes to government-sponsored enterprises in the mortgage industry.”
• The Wall Street Journal reported on Saturday: “Homeowners with high-rate mortgages are starting to get excited about refinancing. The average 30-year fixed mortgage rate dropped to a 10-month low of 6.56%, mortgage giant Freddie Mac said Thursday. The rate has inched down for nine of the past 12 weeks, tracking expectations that the Federal Reserve will cut its own rates next month.”

Reuters reports that Slovakian Prime Minister Robert Fico will meet President Vladimir Putin and Chinese President Xi Jinping during a visit to China this week. Fico will then travel back to Slovakia, where he will meet Ukrainian President Volodymyr Zelenskyy.

• According to an official invite list, Fico is the only leader of an EU member state slated to attend China's V-Day commemorations in Beijing on Sept. 3.
• The Moscow Times reported ahead of Fico’s trip that talks with Putin, “will likely further strain tensions between Bratislava and Brussels,” as Fico is one of the few EU leaders to maintain regular contact with Putin.
• Politico reported on August 18: “Fico has suspended official military assistance to Ukraine, criticized EU sanctions against Russia, rejected NATO membership for Kyiv, and met Vladimir Putin.”
• French Foreign Minister Jean-Noël Barrot told reporters at an EU gathering in Copenhagen on Saturday that Europe will press ahead with initiatives to penalise Moscow for slow-walking the peace process with Zelenskyy.
• Barrot said: “...Putin continues to oppose a high-level meeting with the president of Ukraine, then we will need to force by hardening sanctions — sanctions from the United States, but also European sanctions.”
• In June, a new round of sanctions on Russia’s energy and financial sectors was only possible after Fico agreed to lift a veto threatened in objection to a proposed phase-out of all Russian fossil fuels by the end of 2027.

Gilts have taken cues from wider core global FI markets for much of the day.

• Slightly softer-than-flash final manufacturing PMI data did little for the market, but probably meant that early London lows were not re-tested. Futures last -19 at 90.33.
• The contract breached initial support (90.22), basing at 90.20, but leaving key support at late May lows (90.11) untested.
• Bears remain in technical control.
• Yields are 1.0-2.5bp higher. Curve bear steepens.
• 5s30s is on track for its first close above 150bp in the current cycle. Next upside level is the Feb ’17 high (152.63bp).
• Little change in the very front end of the GBP STIR strip on the day, with SONIA futures +0.5 to -3.5, twist steepening. August lows untested.
• BoE-dated OIS is steady, showing ~9bp of cuts through year-end. We think the November meeting is much more “live” than the 4bp currently discounted by markets.
• Fiscal risks remain front and centre in the UK. Today’s headlines have focused on operational adjustments within the government, with source reports playing down the likelihood of an impending cabinet reshuffle.
• A reminder that the DMO will introduce the new 4.75% Oct-35 gilt via syndication this week. That could come as soon as tomorrow.