US TECHNOLOGY: Intel: US Government 10% Stake
Credit Positive
• Takeaways: 1) Incrementally positive especially after the administration clarified it will not seek equity stakes in other CHIPS grant recipients 2) Highlights Intel’s geopolitical importance, with the administration potentially nudging fabless designers to use Intel's foundry 3) Bolsters Intel's liquidity although execution story remains key.
• Per Bloomberg, President Trump says Intel has agreed to give the US a 10% stake
• Expect meaningful spread compression for both the Intel and FABJV curves
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TARIFFS: Navarro: Take EU-US Trade Deal Reports With "Grain Of Salt"
A brief risk-off move on a comment by White House adviser Peter Navarro on Bloomberg TV referring to earlier reports of a EU-US trade deal nearing completion that would include a 15% baseline tariff - Navarro says:
- "We don't negotiate in public. These other countries aspirationally negotiate in public to try to get us to where they want us to go. I would say even though it was reported on Bloomberg, I would take it with a grain of salt. Never assume anything is fixed until the boss says it is fixed... Let's see what happens."
- Navarro's comments weren't quite as concrete as initially feared from the headlines ("*NAVARRO ON US-EU DEAL REPORT: TAKE IT WITH A GRAIN OF SALT" -bbg) so the risk-off move (worth about 10 points in the S&P) quickly reversed.
- Immediate focus is on a reported EU member state vote on tariff countermeasures Thursday in case a deal can't be reached with the US by Aug 1.
EURGBP TECHS: Trend Needle Points North
- RES 4: 0.8800 Round number resistance
- RES 3: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing
- RES 2: 0.8738 High Apr 11 high and a key resistance
- RES 1: 0.8698 High Jul 16
- PRICE: 0.8653 @ 16:07 BST Jul 23
- SUP 1: 0.8626 20- day EMA
- SUP 2: 0.8597 Low Jul 7
- SUP 3: 0.8561 50-day EMA
- SUP 4: 0.8508 Low Jun 27
The trend condition in EURGBP remains bullish and the cross continues to trade closer to its recent highs. A bullish price sequence of higher highs and higher lows is intact and note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. A resumption of gains would open key resistance at 0.8738, the Apr 11 high. Support to watch is 0.8626, the 20-day EMA.
US: FED Reverse Repo Operation
RRP usage slips to $189.632B this afternoon from $196.374B yesterday, total number of counterparties at 30. Usage had fallen to $54.772B on Wednesday, April 16 -- lowest level since April 2021 - compares to July 1: $460.731B highest usage since December 31.
