US 10YR FUTURE TECHS: (H5) Recovers Off Lows

The Wall Street Journal reports that President-elect Donald Trump is preparing a set of energy-related executive orders, to sign upon his inauguration on January 20, that would unwind Biden administration rules on offshore/onshore drilling on federal lands, tailpipe emissions, and LNG exports approval. 

• The Journal notes: “Trump’s transition team has discussed his second-term intentions with some in the oil industry, according to industry lobbyists. The plans are fluid and could change.”
• Trump spokeswoman Karoline Leavitt said: “The American people can bank on President Trump using his executive power on day one to deliver on the promises he made to them on the campaign trail. When he takes office, President Trump will make America energy dominant again.”
• According to the Journal, one of Trump’s first moves, “will be the creation of a national energy council overseeing U.S. oil, natural gas and electric power policy,” led by Interior Secretary nominee Doug Burgum and Energy Secretary nominee Chris Wright. 
• Trump is also “widely expected to withdraw the U.S. from the Paris climate accord, as he did in his first term, potentially through an executive order in his first days in office.”
• It is unclear if Trump has sufficient executive authority to reverse all Biden-era rules, particularly the ban on offshore oil and gas exploration. During his first term, Trump tried to reverse an Obama-era rule enacted via the same 1953 law. At that time, Trump’s bid was struck down by the courts, who determined that only Congress could unwind the rule. 

OI data suggests short setting dominated through the Euribor greens on Monday, with only limited pockets of net long cover seen in that area of the strip. Net long cover then dominated in the blues.

• Euribor futures largely tracked movements in USD counterparts yesterday, with the markets continuing to digest Friday’s NFP release.
• ECB speakers (Lane, Rehn and Vujcic) added little new to the policy debate.
• OI data indicates that net short setting dominated for three consecutive sessions in Z5, H6 and M6 contracts as of Monday. 

The Economic Secretary to the Treasury, also known as the City Minister, Tulip Siddiq has resigned amid increasing scrutiny regarding her political and financial relations with the ousted Bangladeshi PM Sheikh Hasina, Siddiq's aunt. The gov't has confirmed that Parliamentary Under-Secretary of State for Pensions Emma Reynolds will take over as Econ Sec to the Treasury. Meanwhile, Torsten Bell - former chief exec of the left-leaning Resolution Foundation think tank - becomes a Parliamentary Secretary in the Treasury and Parliamentary Under Secretary of State in the Department for Work and Pensions. 

• The resignation of Siddiq, who also served as anti-corruption minister, comes as Chancellor of the Exchequer Rachel Reeves faces significant pressure amid rising gov't borrowing costs, a weakening pound, and declining fiscal headroom. Reeves' statement to the Commons earlier today gave little sign of what the gov't intends to do to try an assure markets.
• The UK gov't is already facing a slump in opinion polling support. The latest YouGov poll has Starmer's Labour party on 26% compared to the right-wing populist Reform UK on 25%). While Siddiq was a relatively junior minister the nature of her resignation could both tarnish Starmer's attempts to portray his gov't as graft-free, and sustain the political narrative of a gov't being led by events rather than setting the agenda.