UK: Gov't Recalls Parliament To Vote On Emergency Bill To Protect Steelworks
A Downing St. spox has confirmed that parliament will be recalled to sit on Saturday, 12 April, to pass the Steel Industry (Special Measures) Bill that seeks to ensure the UK's last remaining operational blast furnace in Scunthorpe, Lincolnshire, is not shut off by its Chinese owners. With the passage of the bill, the gov't will be given powers to "direct" English steel companies to "protect" the blast furnace, while falling short of all-out nationalisation. A gov't spox said "All options remain on the table."
- While the UK steel industry has been in long-term decline for a number of decades, the geopolitical and economic situation has led to renewed focus on whether the maintenance of a domestic steelmaking industry is a national security necessity.
- On coming to office, PM Sir Keir Starmer has refused so far to nationalise any previously privatised assets, despite some speculation around the water and railway industries. Tomorrow's legislation could to indicate a continued reluctance on behalf of the gov't to fully commit to bringing privatised firms back under state ownership.
- This will mark the first Saturday sitting of the Commons since 19 Oct 2019, at the height of the Brexit parliamentary battles, and the first recall from recess for a Saturday sitting since the Argentine invasion of the Falkland Islands in 1982. The bill is expected to pass all requisite stages in the Commons and Lords in a single day.
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US: USTR Greer Says EU Retaliatory Tariffs Are "Out Of Step With Reality"
United States Trade Representative Jamieson Greer has issued a statement on the European Union's retaliatory tariffs on the United States, describing the bloc's trade and economic policies as "out of step with reality".
- Greer: "For years, the European Union has opposed the United States’ efforts to reindustrialize. The EU has rejected attempts under successive U.S. administrations to cooperate effectively on dealing with global excess capacity on steel, aluminum, and other sectors, employing measures that are too little and too late."
- Greer: "If the EU acted as quickly to address global excess capacity as it does to punish the United States, we likely would be in a different situation today. The EU’s punitive action completely disregards the national security imperatives of the United States – and indeed international security – and is yet another indicator that the EU’s trade and economic policies are out of step with reality."
- The statement comes ahead of a meeting with Canadian ministers at the White House this week reported to include discussions on re-negotiating the US-Mexico-Canada trade agreement (USMCA).
- Canadian Finance Minister Dominic LeBlanc told reporters a few moments ago that Canada will "aim to get relief from tariffs" at the meeting but an early review of USMCA is "not on Canada's agenda", per Reuters. LeBlanc added that it is important to identify "offramps" for tariff threats.
- The first such opportunity for negotiations may come this evening when US Secretary of State Marco Rubio arrives in Charlevoix, Canada for a G7 foreign ministers meeting.
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STIR: Midmorning SOFR Option Update
Two-way SOFR option flow leaning towards low delta put structures since the open. Underlying futures weaker, near morning lows while projected rate cuts through mid-2025 continue to recede vs. early morning levels (*) as follows: Mar'25 at -0.2bp (-1bp), May'25 at -8bp (-9.4bp), Jun'25 at -24.2bp (-26bp), Jul'25 at -35.7bp (-37.5bp).
- +8,000 SFRU5/SFRZ5 95.37/95.62/95.87 put fly spread, 0.5 net, Sep over
- +7,000 0QU5 97.00/97.50 call spds vs 95.75 puts, 0.25 net call spd over ref 96.465
- +2,000 0QM5 96.93/97.43 4x5 call spds vs 95.81 puts, 7.5 net/call spd over ref 96.45
- +2,000 SFRM5 95.93 straddles 27.0 ref 95.95
- +7,000 SFRM5 95.75/95.87/95.93 put trees, 1.0 ref 95.945
- +4,000 SFRZ6 95.00/95.50/96.00 put trees, 1.5 ref 96.42
- -5,000 2QM5 96.12/96.37 call spds vs.3QJ5 96.12/96.37 call spd flattener 2.0 net
- -5,000 SFRJ5/SFRK5 95.87/95.93 1x2 put spd strip 5.0-4.25 ref 95.94
- +10,000 SFRJ5 95.68 puts, 0.25 ref 95.94
- -2,500 0QZ5 96.50/97.00 call spds vs 95.25 puts, 10.5 net/c spd, 96.43
- -4,000 SFRZ5 95.75/96.25 put spds, 21.0 ref 96.325
- +5,000 SFRM5 95.62/95.81/96.00 put tree vs. 96.06/96.31 call spd, 1 net ref 95.95
