IRAN: E3-Iran Call Signals Little Shift In Positions Ahead Of Snapback Sanctions

European Council President Antonio Costa has confirmed an extraordinary video conference of European Union member state leaders to take place tomorrow (19 August) at around 13:00CET (07:00ET, 12:00BST). The topic of the video call will be to discuss the White House meetings taking place later today between US President Donald Trump, Ukraine's Volodymyr Zelenskyy, and a number of European leaders. Costa posted on X, "Together with the US, the EU will continue working towards a lasting peace that safeguards Ukraine’s and Europe’s vital security interests”. 

• Earlier today, Politico reported that a Coreper II meeting of permanent representatives (i.e. member state ambassadors to the EU) would be called over the coming days to assess the 18 August talks. However, it would seem that the importance of the White House meetings has necessitated an upgrade to the national leader level.
• While all EU leaders attending the White House talks (Germany's Friedrich Merz, France's Emmanuel Macron, Italy's Giorgia Meloni, Finland's Alexander Stubb, and Commission President Ursula von der Leyen) are strongly pro-Kyiv, bringing in all EU leaders will likely see more discord.
• This is particularly the case with regard to Slovakia and Hungary. A Ukrainian attack on Russian O&G infrastructure is alleged to have halted Russian crude oil shipments to Hungary and Slovakia on 18 Aug, resulting in a furious tirade from Hungarian Foreign Minister Peter Szijjarto who called the attack "outrageous and unacceptable", and threatened Ukrainian electricity supplies. The EU's efforts to push for a 19th round of sanctions on Russia may be stymied by such discord. 

• Despite an intra-day reversal lower owing to weaker risk sentiment, early price action on Monday saw EURCHF briefly rise above 0.9447, the April highs and a key resistance point for the pair. Spot continues to consolidate above the 0.9400 level which had contained the price action in July, keeping short-term trend indicators pointing to the upside. Also, as opposed to the EUR, CFTC data shows CHF non-commercial positioning in short territory as of August 12.
• Additionally, markets assign an unusually low premium to hedging against CHF strength, with the 25 delta 1m risk reversal in EURCHF currently reaching a significant chart level just below neutral. The last non-marginal positive print in the measure was seen in February 2022, right before the Russia - Ukraine conflict started. The fact that a ceasefire agreement with favourable conditions for Ukraine would likely see this move above zero again underscores that financial markets do view the conflict as decisive for the fate of the bloc.
• Indeed, MUFG write today that "a further reduction in geopolitical risk should a ceasefire be agreed would favour lower volatility alongside recent decisions from major central banks to leave rates on hold [which would be] at the expense of the safe haven currencies of the Swiss franc and yen"
• A sustained break of 0.9447 would bolster the likelihood of a stronger recovery for EURCHF, initially targeting pivotal resistance at the 0.9500 handle. In terms of support, the 20-day EMA coincides closely with the July 28 high around 0.9385.

• Date $MM Issuer (Priced *, Launch #)
  • 08/18 $500M Ecolab WNG 10Y +95a
  • 08/18 $Benchmark DBJ 3Y SOFR+52
  • 08/18 $Benchmark RGA Global 3Y +90a, 7Y +120a
  • 08/18 $Benchmark McDonald's +5Y +80a, +10Y +100a
  • 08/18 $Benchmark Corebridge Global 3Y +85a, 7Y +115a
  • 08/18 $Benchmark Northwestern Mutual 3Y +62.5a, 3Y SOFR
  • 08/18 $Benchmark Charter Communications 10Y +185a, 30Y +215a
  • 08/18 $Benchmark Eli Lilly 3Y +55a, 3Y SOFR, +5Y +65a, 7Y +75a, 10Y +85a, 30Y +95a, 40Y +105a
  • 08/18 $Benchmark Marriott Intl, 2Y +70a, 6Y +105a, 10Y +125a
• Expected Tuesday:
  • 08/19 $4B EIB 5Y SOFR+42a
  • 08/19 $Benchmark IBRD (World Bank) 10Y SOFR+62a
• 08/14-15 No new US$ debt issuance Thursday-Friday, $39.45B priced on week