HUNGARY: EU to Unlock EU550m in Funds for Hungary to Drop Sanctions Veto: FT

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• At 16:00 ET 21:00 BST, President Donald Trump will hold a swearing-in ceremony for his EU ambassador. As with all Oval Office events, Trump is likely to deliver remarks to the press on a range of topics.
• The dust settled on Monday’s White House summit without substantive details on the contours of a peace deal. The two most intractable obstacles – territorial concessions and security guarantees for Ukraine - remain without an obvious solution.
• Secretary of State Marco Rubio will lead negotiations with European and Ukrainian counterparts on a detailed proposal on security guarantees. Joint Chiefs Chair Dan Caine will host military counterparts from Europe today to begin discussions on security guarantees. The 32 NATO defence chiefs will also meet virtually.
• Companies are signalling price rises to guard against the cost of tariffs. Treasury Secretary Bessent said the US is satisfied with the tariff status quo with China.
• Trump renewed his criticism of Fed Chair Powell ahead of the Jackson Hole symposium.
• The White House intends to fast-track Stephen Miran to the Fed board in time for the Fed's September meeting.
• Republicans could suffer political pain from rising electricity prices.
• The Treasury Department hopes that stablecoins will shore up demand for government debt.
• The Israeli government is reviewing a Gaza ceasefire deal.
• Poll of the Day: Approval of Trump's handling of the economy is worse than at any point during his first term.

Full Article: US DAILY BRIEF

{GB} GILTS: While gilt bears managed to force the highest closing level for 30-Year yields seen in the current cycle on Monday (5.611%), they failed to challenge the intraday high registered in early April (5.659%), with the subsequent recovery leaving the benchmark at 5.55%.

• While demand for long end paper has been robust in instances of primary issuance, structural reduction in pension holdings reduce demand in the secondary market, while the UK’s ongoing fiscal fragility provides background pressure (at a minimum).
• As a result, the uptrend in play since the ’21 low remains intact, with that support line ~20bp below prevailing levels at typing.

Fig. 1: UK 30-Year Gilt Yield (%)

Source: MNI - Market News/Bloomberg Finance L.P.

Dovish ’26 BoE pricing moves have pulled the SONIA/Euribor Dec ’26 (Z6) spread off yesterday’s multi-week closing highs.

• We suggested that the data wasn’t much of a gamechanger for near-term BoE meeting pricing in the immediate aftermath of the release and that seems to have played out, with the initial hawkish reaction in the front contracts countered.
• The recent run of UK data had resulted in ~18bp of spread widening since August 1, as of yesterday’s close.
• The spread is mainly being driven by the UK leg, with Euribor pricing more stagnant since the July ECB decision.
• The main development since the ECB's July decision has been the EU-U.S. trade agreement. While the agreement reduced near-term trade policy uncertainty, the level of tariffs is more onerous than assumed in the ECB's baseline scenario.
• That said, ECB President Lagarde noted this morning that the agreement is "well below" the June MPR projection severe scenario". How the agreement is incorporated into the September forecast round will be a key focus as we move forwards.
• A reminder that the ECB adopted a less dovish round of rhetoric after its most recent cut.
• Euribor futures start to price chances of a hiking cycle in H226, after leaning towards one further cut in the current cycle.

Fig. 1: SONIA/Euribor Dec’26 Spread (bp) 

Source: MNI - Market News/Bloomberg Finance L.P.