IRAN: Foreign Min-US Not Ready For Nuclear Talks On An Equal Footing
Foreign Minister Abbas Araghchi has said in an interview that nuclear talks with the US are not likely in the near future. Araghchi: "We have not yet reached the point of maturity in negotiations, meaning effective negotiations with the US...the US is not ready for negotiations on equal footing. If they seek talks, it’s to win at the table what they failed to achieve militarily, and they will not succeed.”
- Despite the lack of nuclear talks and the looming prospect of snapback sanctions coming into force, Araghchi downplays the prospect of a resumption in hostilities with Israel and/or the US, saying, "We must be careful not to create an atmosphere for war. [...] Before the 12-day war, I myself had the feeling that war could be imminent due to regional and international conditions, but I do not have that feeling now."
- After cooperation with the International Atomic Energy Agency (IAEA) was cut off in the wake of the 12 Day War, there appears to be some movement towards rapprochement. Araghchi called the visit from IAEA Deputy Director General Massimo Aparo was "useful", and that a future round of talks may take place in Vienna.
- On snapback sanctions, Araghchi said "It is possible that snapback will ultimately be activated, I do not deny this...We have designed a set of measures jointly with China and Russia to implement in case the snapback is activated." The E3 (France, Germany, UK) have given Iran a deadline of end-August to resume nuclear talks or face reimposed sanctions from mid-October.
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GILTS: Rally Holds, Futures Still Below First Resistance
Bulls haven’t managed to test resistance at the 20-day EMA (91.99), despite the extension through Thursday’s highs, with global cues still dominating.
- Yields 3.5-6.5bp lower, curve flatter.
- 10s back into the range that has prevailed for much of July, after registering the highest close seen since May on Friday. Similar picture seen in 30s.
- The early rally in SONIA futures extends alongside the bid in the long end, contracts last flat to +7.0, retracing a little after some contracts registered fresh multi-week lows in recent sessions.
- Little net movement in BoE pricing on the day, ~48bp cuts priced through Dec.
- Public finance data and financial stability-centric comments from BoE Governor Bailey are due tomorrow.
EQUITY TECHS: E-MINI S&P: (U5) Trend Needle Points North
- RES 4: 6439.884 1.500 proj of the May 23 - Jun 11 - 23 price swing
- RES 3: 6402.44 1.382 proj of the May 23 - Jun 11 - 23 price swing
- RES 2: 6381.50 1.764 proj of the Apr 7 - 10 - 21 price swing
- RES 1: 6357.00 High Jul 18
- PRICE: 6343.00 @ 14:17 BST Jul 21
- SUP 1: 6288.25 Low Jul 17
- SUP 2: 6246.73/6101.83 20- and 50-day EMA values
- SUP 3: 5811.50 Low May 23
- SUP 4: 5645.75 Low May 7
S&P E-Minis traded high last week resulting in a fresh cycle high. The climb confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Note that moving average studies are in a bull-mode position highlighting a clear dominant uptrend. Sights are on 6381.50, a Fibonacci projection. Key support is at the 50-day EMA, at 6101.83. Support at the 20-day EMA is at 6246.73.
EQUITIES: Some Selling Creeping In
Downside In equites as Euro Stoxx 50 futures retest session lows and e-minis edge further away from session highs. No clear driver once again, maybe some looking more closely at the reports of increased hawkishness in EU-U.S. trade relations as we move towards the NY cash open, but the latest moves are modest in the grander scheme of things.
