RUSSIA: For Min-Sanctions "Counterproductive"; Medvedev Says Trump 'On Warpath'
The Russian Foreign Ministry have issued its first comments following the announcement of US sanctions on oil giants Rosneft and Lukoil. Ministry spox says the sanctions are "counterproductive from the perspective of finding peace in Ukraine...If the US follows the example of previous US administrations, then it will be a failure".
- Regarding the cancellation of the Trump-Putin summit in Budapest, ministry spox says that Moscow is "ready to continue contacts with the US State Department". A phone call between Foreign Minister Sergey Lavrov and US Secretary of State Marco Rubio earlier in the week was viewed as a major driver of the cancellation and sanctions, with Rubio believed to have informed Trump that Russia is showing no signs of making concessions.
- Indeed, Foreign Ministry spox repeats Kremlin spokesman Dmitri Peskov's line that "Russian goals in Ukraine remain unchanged", and that "this is the starting point of dialogue with the US."
- Former president and Deputy Chair of the National Security Council Dmitri Medvedev says that the US is Russia's "opponent" and "peacekeeper Trump is on the warpath with Russia." Says Trump's actions are "like an act of war against Russia", and Trump has aligned himself with "loony" Europe.
- During the course of the war, Medvedev has acted as the "attack dog" for the Kremlin, utilising much more aggressive rhetoric than other gov't officials, allowing President Vladimir Putin to present his stance as more "reasonable". As such, these comments from Medvedev should not be viewed as a significant escalation or threat.
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JAPAN: LDP Candidates Support New Parties In Coalition, No Signal Of Which Ones
Speaking at a joint press conference earlier today, all five candidates for the presidency of the governing Liberal Democratic Party (LDP) voiced their support for the prospect of expanding the governing coalition beyond the LDP and its long-term partner, the centrist social-conservative Komeito party. The two leading candidates, former Minister of State for Economic Security Sanae Takaichi and Minister for Agriculture, Forestry and Fisheries Shinjiro Koizumi, offered different views on the timeframe of expanding the governing coalition.
- Takaichi advocated a swift inclusion of new parties should she win the presidency, while Koizumi said it is "not about setting a deadline". The LDP is short of a majority in both chambers of the National Diet following lower house elections in Oct 2024 and the upper house in July.
- The decision on which party/parties to invite into gov't would inevitably cause intra-LDP tensions. Moderates would favour the centre-right Democratic Party for the People or libertarian regionalist Ishin, while those on the right may advocate brining the far-right nationalist Sanseito, one of the major winners of the July election, into gov't in order to try and halt its progress.
- Political bettors continue to view Koizumi as favourite to succeed PM Shigeru Ishiba, with data from Polymarket showing the 44-year-old with a 75% implied probability of winning, compared to 22% for Takaichi (64). The latest polling from Sankei/FNN, Asahi Shimbun, and Mainichi showed Takaichi favoured by all respondents, but Koizumi ahead among LDP supporters. In the first round of the contest (on 4 Oct), half of the overall votes go to grassroots party members and the other to LDP lawmakers.
Chart 1. Political Betting Market Implied Probability of becoming next Japanese PM, %
Source: Polymarket
EGB SYNDICATION: DDA: 30-year 3.50% Jan-56 DSL: Cut off spread
- Cut off spread 2.90% Aug-54 Bund + 20bps
- Prelim initial spread guidance yesterday was +18.5 to 22.5bps then revised to 19.5 to 22.5bps as books opened then 19.5 to 21.0bps. Final guidance was + 20 to 21bps
- Size: E4.0-5.0bln will be on offer (MNI assume takeup at the top of the target range)
- Final book: E32.739bln
- Maturity: 15 January 2056
- ISIN: NL0015002P70
- Books closed, pricing today
EUR: EURGBP is testing the August high Post UK Data
- Given the broader small pressure on the Pound since the UK PMIs, it is worth keeping an eye on the EURGBP which is now testing the August high at 0.87438.
- Market Participants will be keeping a close eye at the July spike up to 0.8769, which closely matched with the November 2023 high, and also some of the best level seen since May 2023.
(Chart Source: MNI/Bloomberg Finance LP).
