POLAND: Belarus Border To Be Sealed Until Further Notice Due To Zapad-2025
Sep-10 10:44
- The focus overnight was on a flare-up in geopolitical tensions in the east after Poland downed several Russian drones that violated its airspace. As a reminder, the incident comes after PM Tusk announced that Poland would shut its border with Belarus on Thursday in response to Zapad-2025, Minsk's joint military drill with Russia to be held from Sep 12-16. Pointing to the 'growing number of various provocations from Russia and Belarus', Tusk said that the war games simulate aggression towards the so-called Suwałki Gap, a key chokepoint connecting Poland and Lithuania. He reiterated this assessment in his remarks in parliament today when he updated lawmakers on the night-time drone incursion.
- The Centre for Eastern Studies (OSW) notes that the exercise has been significantly downscaled relative to its 2021 and 2017 editions and the bulk of it will take place at training grounds in north-eastern Belarus, which Minsk has tried to portray as a de-escalatory gesture towards its neighbours. It further notes that unlike in previous editions, this iteration of Zapad is not synchronised with Russian military exercises in the Kaliningrad region, while much of the accompanying propaganda activity has been deferred to Belarus, which has been portraying Zapad-2025 as a defensive drill.
- Money.pl has now reported that a draft administrative decision envisages closing border crossings with Belarus from midnight on September 12 until further notice. The decision has been protested by businesspeople from the eastern Podlasie region, who have called for greater stability and more government support. In addition, the measure may have some short-term impact on the flow of foreign trade - the terminal in Małaszewicze is an important gateway for Chinese rail-borne exports into Europe.
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US TSYS: Summer Overnight Volumes, Trump Press Conference Headlines Docket
Aug-11 10:41
- Treasuries are mildly firmer after a late open with a Japan holiday, with benchmark tenors within Friday’s range.
- They see mixed European spillover, with Gilts outperforming as they retrace losses last week whilst EGBs underperform.
- With such a quiet docket, expect headlines/flow to dominate proceedings with tomorrow’s CPI report looming large.
- Today’s main scheduled event is President Trump’s press conference at 1000ET, with the focus set to be on law enforcement in the District of Columbia but always with scope for discussions on wide-ranging topics.
- Some areas worth watching: White House administration to issue an executive order clarifying gold tariffs in “the near future”, announcement of the new BLS commissioner due after Trump fired McEntarfer after the weak July payrolls report, and geopol-related headlines ahead of Friday’s Trump-Putin meeting in Alaska.
- Cash yields are 1-5-2bp lower from Friday’s close.
- TYU5 trades at 11-29+ (+03) on extremely thin cumulative volumes of 145k. It holds its ground, with resistance seen at 112-15+ (Aug 5 high) and support at 110-19+ (Jul 24 low).
- Data: None scheduled
- Fedspeak: None scheduled
- Bill issuance: US Tsy to sell $82B 13-W, $73B 26-W bills (1130ET)
- Politics: Trump press conference on law enforcement (1000ET)
BONDS: EGBs Underperform Peers
Aug-11 10:36
EGBs lead the pullback from session highs seen over the past couple of hours, with both Tsys & gilts outperforming Bunds on the day.
- This is presumably owing to Europe’s sensitivity to inflation linked to the Russia-Ukraine conflict, as the market takes a more sanguine outlook on the prospect for a breakthrough re: a Russia-Ukraine ceasefire.
- A related uptick from session lows in crude oil weighs on wider core global FI.
SONIA OPTIONS: SFIH6 96.70 Calls Sold
Aug-11 10:35
SFIH6 96.70 calls 3.5K given at 5
