SECURITY: E3 Leaders 'Urge De-Escalation' & 'Back Israel Self-Defence'
Speaking to Bloomberg News, British Prime Minister Sir Keir Starmer says that his gov't has "grave concerns" about Iran's nuclear programme, and that it backs Israel's right to self-defence. He goes on to call for de-escalation in the situation. These comments mirror almost exactly those from French President Emmanuel Macron and German Chancellor Friedrich Merz, with the 'E3' (the three European signatories to the 2015 Joint Comprehensive Plan of Action, the Iran nuclear deal) acting in concert following a joint call between the three leaders earlier today.
- Bloomberg News: "Starmer said the UK did not participate in Israel’s attacks and declined to comment on whether Britain would help defend Israel from Iranian attack, as it has done previously." The PM confirmed in the interview that he intends to speak with Israeli PM Benjamin Netanyahu later today. Merz and Macron have already held talks with Netanyahu.
- As Euractiv notes, "With little leverage in the region left, European leaders are now looking to Washington." EU leaders have called for 'diplomatic solutions' to the crisis, but it is the actions of the US rather than EU or E3 that will carry the most weight.
- The US has already shown signs of becoming more militarily active, given the situation, moving two naval destroyers towards the eastern Mediterranean according to reports. These could provide further security for Israel if Iran launches retaliatory missile strikes.
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TARIFFS: Fox-US Nears Trade Deals w/ Japan & South Korea
Charles Gaspariino at Fox Business posts on X: "Trade-tariff deals with Japan and South Korea said to be “close,” according to me Wall Street sources close to the White House. Timing unclear. India deal as well though it has been throttled by the tensions with Pakistan."
- US Trade Representative Jamieson Greer arrived in South Korea earlier today to attend a trade ministers' meeting of the Asia-Pacific Economic Cooperation (APEC) group. Greer is set to hold talks with Ahn Duk-geun, Seoul's minister of trade, industry and energy on the sidelines of the APEC meeting on Friday, 16 May. Korea Times reports "The two sides are expected to discuss follow-up measures to the high-level trade consultations between Korea and the United States, which were held last month in Washington." It remains to be seen how much progress can be made in the short term, given the high likelihood that liberal Democratic Party of Korea candidate Lee Jae-myung wins the South Korean presidency in the 3 June election, resulting in a change in administration from the current caretaker gov't.
- Japan has said that it will evaluate the agreement reached between the US and China before any future trade talks between Washington, D.C., and Tokyo.
- As noted on 13 May, Indian Minister of Industry Piyush Goyal visits D.C. from 17-20 May for talks with Greer and Commerce Sec Howard Lutnick in an effort to press towards a deal.
EGB SYNDICATION: Latvia 5-year benchmark: Priced
- EU1b 5Y Fixed (May 21, 2030) at MS+65
- Revised guidance MS+70a (+/-5) will price in range, guidance MS+80 area
- Reoffer price 99.56 to yield 2.971%
- Benchmark: OBL 2.4% 04/18/30 +72.6
- Books above EU3b (including JLM interest): Leads
- Coupon: 2.875%, annual, act/act ICMA
- (MNI saw a good chance for a E1.0-1.5bln transaction size)
- Format: Reg S CAT1, registered, senior unsecured
- Settlement: May 21, 2025
- ISIN: XS3075496896
- Bookrunners: BNPP (B&D), GS, JPM
- FTT: 3:35pm London
Details as per Bloomberg
GILT AUCTION PREVIEW: On offer next week
The DMO has announced it will be looking to sell GBP4.25bln of the 4.00% Oct-31 Gilt (ISIN: GB00BPSNBF73) at its auction next Wednesday, May 21.
