BRAZIL: Bolsonaro Coup Trial To Start 2 September
Folha de Sao Paulo reports that, according to a court document, the trial of former President Jair Bolsonaro on charges of attempting to orchestrate a coup d'etat following the 2022 presidential election will get underway on 2 September. Bolsonaro, under house arrest since 5 Aug, is set to be tried by the Supreme Court alongside former Navy commander Almir Garnier, former Justice Minister Anderson Torres, former Institutional Security Bureau head Augusto Heleno, Lieutenant Colonel Mauro Cid, former Defence Minister Paulo Sergio Nogueira, and former Chief of Staff Walter Braga Netto.
- In a document submitted to the court on 13 August, Bolsonaro's legal representatives called for the former president's acquittal, writing “There is no way to convict Jair Bolsonaro based on the evidence presented in the case, which largely demonstrated that he ordered the transition … and assured his voters that the world would not end on December 31st".
- The case will be heard by a five-member panel of the Supreme Court. If convicted, Bolsonaro faces up to 12 years in prison, although he would be permitted to launch an appeal before the entire Supreme Court.
- Bolsonaro is legally barred from running in the 2030 presidential election, but he maintains a sizeable support base and there is the prospect of social unrest during and after the trial, whether he is convicted or acquitted. Bolsonaro's ties to US President Donald Trump have been viewed by some as a factor in the 50% tariffs imposed on Brazilian exports as part of Trump's 'reciprocal' tariff programme.
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EU-RUSSIA: EU Diplos Fail Once Again To Approve 18th Sanctions Package
Reuters reports that, according to EU diplomats, the Union has once again failed to approve the 18th package of sanctions on Russia. EU ambassadors met for a Coreper II meeting in Brussels today after EU foreign ministers failed to reach a unanimous consensus yesterday, with Slovakia again the obstacle. The gov't of PM Robert Fico has held up the sanctions over another issue, the EU's planned phase-out of Russian fossil fuels.
- On 15 July, Fico stated that EU assurances on ensuring a sufficient supply of hydrocarbons despite the phase out were "insufficient", risking a major escalation in tensions between Brussels and Bratislava. The phase out only needs a qualified majority, meaning Slovakia cannot block it. However, sanctions need unanimous approval, resulting in Slovakia holding up the package until its demands on the phase out are met.
US TSYS: Fresh Steepening In UST Curve On Trump vs Powell Headlines
Fresh steepening in the US 2s10s curve on the latest headline, now at 61bps for the steepest since May 22. 10s30s also 4bps steeper today at 57.5bps, a fresh multi-year high.
- 2-year yields now down 8bps at 3.86%, but 10-year yields are down 1bp and 30-year yields up 3bps.
- A less politically independent Fed requires a higher risk premium for holding US Treasuries, and is driving the twist steepening of the curve here.
