US: Americans Say Maintaining Alliances Most Important Foreign Policy Approach
Data from the 2025 Chicago Council Survey "show that while Trump administration officials have questioned the benefits of US alliances, the American public is much more convinced of their intrinsic value."
- Far more Americans think the United States should mainly make important foreign policy decisions with major allies (60%) versus on its own (21%).
- Large majorities consider maintaining US alliances (91%) and superior US military power (85%) to be effective ways to achieve US foreign policy goals, but this year, maintaining alliances edges out military power as a “very” effective tool (55% vs. 48% military).
- The survey notes, "the Trump administration has at times sidelined US allies in key negotiations while ignoring the conflict that may create for US partners. Most Americans, however, think the United States should mainly make important foreign policy decisions with major allies, the highest level recorded on this question in 50 years..."
Figure 1: "How effective do you think each of the following approaches is to achieving the foreign policy goals of the United States—very effective, somewhat effective, not very effective, or not effective at all? (% very and somewhat effective)"
Source: Global Affairs
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BONDS: EGBs-GILTS CASH CLOSE: UK Curve Belly Underperforms Pre-CPI
EGBs and Gilts traded mixed Tuesday amid key UK data releases and ahead of the Fed and BoE decisions.
- Yields picked up in morning European trade, with Gilts weighed down in particular by firmer-than-anticipated aspects of the latest UK labour market report.
- Yields would peak in early afternoon after US retail sales data printed much stronger than expected, but would subsequently subside over the rest of the European cash session, as a pullback in equities renewed a bid for core FI.
- DMO announced a reduction in the size of 30Y Gilt auctions, helping the UK curve flatten toward the end of the session.
- Elsewhere in data, Euro area industrial production increased in July in line with expectations, while the September German ZEW survey's expectations component was much stronger-than-expected.
- The German curve twist steepened, with the UK's twist flattening with underperformance in the belly. Periphery/semi-core EGB spreads were little changed on the day.
- Wednesday's European calendar highlight is the UK CPI release (MNI preview here) though there will be global interest in the Federal Reserve meeting after the close as well as multiple ECB speakers (including Lagarde), with the BoE decision looming Thursday.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 1.6bps at 2.002%, 5-Yr is down 1.1bps at 2.285%, 10-Yr is up 0.2bps at 2.693%, and 30-Yr is up 1.5bps at 3.275%.
- UK: The 2-Yr yield is up 1.1bps at 3.964%, 5-Yr is up 1.8bps at 4.079%, 10-Yr is up 0.6bps at 4.639%, and 30-Yr is down 0.9bps at 5.453%.
- Italian BTP spread up 0.1bps at 78.5bps / French OAT spread up 0.5bps at 79.6bps
US TSYS/OVERNIGHT REPO: ON RRP Takeup Ticks Up From Multi-Year Low
Overnight reverse repo facility takeup ticked up for the first session in the last four, but remained near post-2021 lows.
- A $1.9B rise Tuesday from Monday's post-April 2021 low brought takeup to $18.8B.
- That left takeup still flatlining vs the habitual $100B+ levels seen prior to August, and is likely to remain around low levels until month-end when the usual month-/quarter-end pressures tend to increase takeup.
US: Americans' View On Trump Tariffs Coloured By Partisan Affiliation
A new survey from I&I/TIPP shows a stark partisan divide on the benefit or harm of President Donald Trump’s tariffs. TIPP notes, “Overall, 23% said tariffs mostly help U.S. workers, but more than twice as many – 55% – said they mostly hurt consumers. Another 11% said it doesn't make a lot of difference, while 11% were not sure.
- “Democrats (11% "mostly helps workers," 76% "mostly hurts consumers") and independents (14% "mostly helps workers," 58% "mostly hurts consumers") overwhelmingly agreed that consumers were hurt by tariffs.
- “But among Republicans, 41% answered that the tariffs would help workers, compared to just 35% who said they would help consumers.”
Figure 1: Do Tariffs Mostly Help American Workers, Hurt American Consumers, or not make much Difference?
Source: Tipp Insights
