SECURITY: Estonia Claims Russian Jets Violated Airspace In Latest Escalation
Sep-19 15:18
The Estonian Foreign Ministry has claimed that three Russian MiG-31 fighter jets violated the country's airspace for a total of 12 minutes while traversing the Gulf of Finland earlier today. Foreign minister Margus Tsahkna claimed that the violation was the fourth in 2025 to date, "which is unacceptable in itself, but today's violation, during which three fighter jets entered our airspace, is unprecedentedly brazen...Russia's ever-increasing testing of borders and aggressiveness must be responded to by rapidly strengthening political and economic pressure."
- The heavy interceptor MiG-31s are capable of carrying hypersonic Kinzhal missiles, and after heading towards the capital, Tallinn, scrambled its own Italian-made F-35s to deter the Russian jets. A NATO spox said the Russian jets were swiftly intercepted, 'highlighting Russian reckless behaviour and NATO's rapid response.'
- Estonia becomes the third NATO member in a short period of time to announce Russian aerial incursions after Romania claimed a Russian drone entered its airspace during an attack on neighbouring Ukraine, while Poland was forced to scramble its own air defences in response to 'dozens' of Russian drones crossing the border from Belarus.
- While such border penetrations have become increasingly frequent, each additional violation elevates the risk of miscalculation or accident that could set off an escalatory chain reaction involving NATO and Russian forces.
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FED: US TSY 17W AUCTION: NON-COMP BIDS $455 MLN FROM $65.000 BLN TOTAL
Aug-20 15:15
- US TSY 17W AUCTION: NON-COMP BIDS $455 MLN FROM $65.000 BLN TOTAL
STIR: 2025 Rate Cut Prospects Build But Only Back To Pre-CPI Levels
Aug-20 15:13
- Rate cut prospects have increased on the two-prong nature of tech-led equity weakness and the WSJ reporting that Trump is considering firing Fed Governor Cook (a step up from his earlier Truth Social post urging her to resign).
- Fed Funds implied cumulative cuts from 4.33% effective: 22bp Sep, 36.5bp Oct, 57bp Dec, 69bp Jan and 82bp Dec.
- For context though, the 57bp of cuts to year-end is only back to levels seen shortly after Thursday’s strong PPI report and as such continues to have at least fully reversed the dovish impact from CPI earlier last week.
- Dovish implications are clearer to see further out the curve, with the SOFR implied terminal yield of 3.055% (SFRH7) now 4.5bp lower on the day (7.5bp lower than pre-CPI levels) after some narrow ranges in recent days.
- Terminal pricing does however keep to the 125bp +/-5bp of cuts from current levels range broadly seen since the Aug 1 payrolls report.
US TSY FUTURES: Extending Highs
Aug-20 15:10
- Mirroring late support in German Bund, Treasury futures continue to extend highs in late morning trade, weaker stocks (SPX eminis at 6377.5 -55.0) contributing to the move.
- Tsy Sep 10Y contract +7 at 111-31.5 session high, initial technical resistance at 112-15.5 (High Aug 5 and the bull trigger).
- Curves have reversed early flattening to steeper: 2s10s +.237 at 55.847, 5s30s +1.491 at 109.733.
- Focus on this afternoon's July FOMC minutes release at 1400ET.
