EM FX: EM Currencies Pare Losses On Reports US-Iran Talks Will Resume Next Week

Reuters reports that approval of President Donald Trump's immigration policy has fallen to its lowest level since his return to the White House, with a majority of Americans saying his crackdown on immigration has gone too far.

• Reuters notes, “Just 39% of Americans approve of the job Trump is doing on immigration, down from 41% earlier this month, while 53% disapprove, the poll found. Immigration was a brighter spot for Trump's popularity in the weeks following his January inauguration. In February, 50% approved and 41% disapproved.”
• The survey is the latest to suggest that heavy-handed immigration enforcement operations by ICE are contributing to a major collapse in support for Trump's immigration agenda, traditionally his strongest policy issue. Silver Bulletin notes that Trump's approval on immigration has slipped from +7.0 —> -11.7 over the year he has been in office.
• SB notes, "That -11.7 net approval rating on immigration — a second term low — comes after the killings of Renee Good and Alex Pretti by ICE and U.S. Border Patrol agents in Minneapolis. (Although note that there aren’t yet many polls in the average fielded after Pretti’s killing.)"

Figure 1: What Americans think about Trump's handling of immigration

Source: Reuters

EGBs and Gilts saw mild weakness Tuesday.

• Yields were pressured to the upside in early trade amid a heavy supply session, including a German 20Y syndication.
• However global yields would pull back along with the US dollar's pronounced weakness through most of the day until about 2 hours before the European cash close at which point yields suddenly reversed off session lows with no particular macro/newsflow trigger evident.
• In a limited data slate, BRC shop price inflation came in notably strong in January (1.5% Y/Y vs 0.7% prior), while Spanish Q4 unemployment printed a fresh multi-year low of 9.9%.
• On the day, the German curve bear flattened with the UK's bear steepening.
• Periphery/semi-core EGB spreads closed little changed; OAT/Bund spreads were a little wide after reversing earlier tightening.
• Wednesday's schedule includes Italian and German confidence surveys with some appearances by ECB's Elderson and Schnabel, though most attention will be on the Federal Reserve decision.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 2.5bps at 2.128%, 5-Yr is up 0.2bps at 2.467%, 10-Yr is up 0.7bps at 2.874%, and 30-Yr is up 1.5bps at 3.494%.
• UK: The 2-Yr yield is up 0.1bps at 3.741%, 5-Yr is up 1.9bps at 3.985%, 10-Yr is up 2.6bps at 4.523%, and 30-Yr is up 3.2bps at 5.268%.
• Italian BTP spread down 0.4bps at 59.5bps / French OAT up 0.3bps at 56.7bps  

• +20,000 0QJ6 96.25 puts, 1.0 ref 96.72
• -4,000 SFRU6 96.50 pus, 6.0 vs. 96.70/0.25%