EUROZONE ISSUANCE: EGB Supply (2/2)

• EUR/USD: $1.1500(E2.4bln), $1.1570(E2.3bln), $1.1600(E1.8bln), $1.1630-50(E3.7bln), $1.1700-15(E5.9bln), $1.1750(E1.0bln)
• USD/JPY: Y158.00($2.8bln), Y158.50($1.9bln), Y159.00($4.9bln), Y159.50-70($2.1bln), Y160.00($2.6bln)
• GBP/USD: $1.3360-80(Gbp1.1bln), $1.3425-30(Gbp725mln), $1.3545-50(Gbp1.1bln)
• EUR/GBP: Gbp0.8640-45(E1.0bln)
• AUD/USD: $0.7050-55(A$1.4bln), $0.7120(A$531mln), $0.7155(A$625mln), $0.7200(A$622mln), $0.7225-35(A$1.7bln)
• USD/CNY: Cny6.8140($1.2bln)

NY Fed’s Williams (voter) maintained his position as one of the more dovish FOMC members by saying he doesn’t see an obvious direction for future rates in an interview with Yahoo Finance. These are very similar to Thursday’s Q&A when he was typically noncommittal to a question on where he sees rates over the coming months, didn’t bring up the potential for tightening and noted that his base case is that tariffs and energy prices will have only "one off effects".

• “Monetary policy is exactly in the right place. I don’t see any need to raise or lower interest rates right now. I also don’t see an obvious kind of direction where we would go in the future”.
• Asked if the Fed statement should drop its easing bias, he said, "I don't think forward guidance is particularly helpful right now."
• Upside risks to inflation have increased, but the economy is resilient and the labor market is in a good place, he said. Assuming the Strait of Hormuz opens in the next few months, he said inflation should peak in the next couple of months then stay elevated through the rest of 2026 – a broad repeat from comments seen late last week.
• "I'm not that worried about dramatic second-round effects of persistent inflation … Inflation expectations remain well anchored. We're also seeing costs from the labor side very contained and consistent with low and stable inflation."
• In a new comment compared to last week’s appearance, he doesn’t see new tariffs as being a large impulse on inflation. 

Canada-US Trade Minister Dominic LeBlanc has confirmed in a statement on X that Canada is subject to a CUSMA (USMCA) exemption for new 10% Section 301 US tariffs proposed by the Trump administration yesterday. Despite the carveout, LeBlanc noted that Ottawa will take steps to address any issues related to the use of forced labour in supply chains. 

• LeBlanc, "We have taken note of the consultation process launched by the United States on Section 301 tariffs regarding a wide range of countries. This does not come as a surprise, as the United States has stated its intention to replace existing baseline global tariffs imposed under Section 122 when they expire in July.
• "Notably, the new Section 301 tariffs include a CUSMA carve-out and other existing product exemptions. Canada has a robust regime to protect against forced labour practices, and we will soon be taking action to make it even stronger, including through the introduction of new legislation this month, while continuing to work closely with our trading partners..."
• A slate of separate US Section 301 investigations are underway, including one addressing “excess capacity” in manufacturing, which is expected to be released in the coming days. Bloomberg noted earlier that, “Trade analysts are speculating whether any future duties from that probe would be stackable on top of those proposed under the forced labor investigation.”