RUSSIA: Kremlin-'Budapest Summit Needs More Prep', Despite Trump Cancellation
State-run Tass reporting comments from Kremlin spox Dmitry Peskov regarding the apparent cancellation of the Budapest summit between President Vladimir Putin and his US counterpart Donald Trump (see 'RUSSIA: Budapest Conference Off, But Background Work Continues', 08:53BST). Peskov claims there is no news yet regarding the summit; "rumours and speculation" about the situation surrounding its preparations are largely inaccurate. Peskov claims that "The dates [for the summit] haven't been set; that's still to come. Thorough preparation is needed before then, and that takes time". Peskov repeats Trump's comments, saying that neither side wants to "waste time".
- Peskov takes the same line on the 'non-paper' supposedly passed to the US regarding Russia's stance on the conflict as Deputy Foreign Minister Sergei Ryabkov. Peskov says, "Russia has repeatedly stated its clearly formulated position on Ukraine."
- The 'non-paper', alleged to have reiterated Russia's maximalist demands for Ukraine to cede the entirety of the Donbas, is seen as one of the major factors behind the US' apparent cancellation of the summit and Trump's dismissal of the potential event as a "wasted meeting".
- Peskov claims that the idea of the Budapest summit came about due to “a mutual desire”. Says "the current pause [in the peace process] requires intervention at the highest level. But this intervention must be well-prepared."
- Separately, Peskov confirms that Putin will not attend the G20 summit in Johannesburg, South Africa, but that Russia will be represented at a 'decent' level.
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GERMAN T-BILL AUCTION RESULTS: 3/9-month Bubills
| Type | 3-month Bubill | 9-month Bubill |
| Maturity | Dec 10, 2025 | Jun 17, 2026 |
| Allotted | E2.3bln | E2.03bln |
| Previous | E1.595bln | E2.187bln |
| Total sold | E2.5bln | E2.5bln |
| Target | E2bln | E3bln |
| Avg yield | 1.791% | 1.954% |
| Previous | 1.839% | 1.913% |
| Bid-to-cover | 2.57x | 1.23x |
| Previous | 2.16x | 2.22x |
| Bid-to-offer | 2.36x | 1x |
| Previous | 1.72x | 1.62x |
| Previous date | Aug 25, 2025 | Aug 25, 2025 |
FOREX: USD Index Eases Off Recovery Highs, Fed Speakers Awaited
- The USD index tracks moderately lower on Monday, easing around 30 pips from the overnight peak that saw the index print a fresh recovery high at 97.82. Markets are trading with a subdued tone amid a lighter economic calendar to start the week, with central bank speakers dominating the schedule later today.
- The likes of EUR and GBP trade on a surer footing, rising around 0.15%. Large option expiries for EURUSD between the 1.17/18 mark might define the short-term range, following the post-Fed volatility last week that saw the pair reverse from 1.1919 cycle highs. Support to watch is 1.1667. the 50-day EMA.
- GBPUSD is broadly consolidating its solid bump lower last week, struggling to get back above the 1.35 mark. Fiscal concerns continue to be front and centre following last Friday’s borrowing data. The next support to watch lies at 1.3441, a trendline support drawn from the Aug 1 low.
- For NZDUSD, the sharp reversal from 0.6000 to current spot levels renews the focus on a significant pivot point at 0.5800, which coincides with the 50% retracement of the year’s range. Furthermore, the pair is currently trying to break a trendline drawn from the year’s lows, which may bolster the bearish momentum in coming sessions. Below 0.5800, 0.5728 and 0.5636 would be the most obvious targets for a deeper selloff.
- There are five Fed speakers in the calendar on Monday, with markets most likely to focus on further comments from Fed’s Miran, who is speaking at the Economic Club of New York. We may also have comments from Bank of England’s Bailey and Pill. Governor Bailey has a fireside chat on supervision culture.
GILTS: Recovery From Lows Holds
Downticks in the major global equity benchmarks and a move away from session highs in crude oil allow wider core global FI markets to move away from session lows.
- Little of note on the local news front over the weekend, after Friday’s PSNB data revealed the latest instance of fiscal deterioration.
- Gilt futures traded through Friday’s lows & first support (90.65), before basing at 90.60 and recovering back to ~90.80.
- Initial support and resistance comes in at 90.31 & 91.14, risks to the recent bullish phase have increased despite the recovery from lows.
- Yields 1-2bp lower across the curve.
- GBP STIRs little changed, trading towards the hawkish end of their recent range.
- SONIA futures flat to +1.0.
- BoE-dated OIS shows just ~1.5bp of easing for November & ~6bp through year-end.
- We think that markets underprice the prospect of both a November and a December cut.
- We also look into the BoE’s APF decision in our BoE review.
- Comments from BoE chief economist Pill are due this afternoon (13:30 London), followed by comments from Governor Bailey (19:00 London). Expect Pill’s comments to be of greater interest for markets, as he speaks on monetary policy frameworks, while Bailey speaks on supervisory matters.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Nov-25 | 3.950 | -1.7 |
Dec-25 | 3.905 | -6.2 |
Feb-26 | 3.799 | -16.9 |
Mar-26 | 3.766 | -20.2 |
Apr-26 | 3.693 | -27.4 |
Jun-26 | 3.667 | -30.0 |
