US-RUSSIA: Kremlin: Trump-Putin Meeting Needs Prep But Could Happen By Month End
Feb-19 08:55
Russian state media reporting comments from Kremlin spox Dmitry Peskov. Says the prospective meeting between Presidents Vladimir Putin and Donald Trump "will take time to prepare", but that they could meet before the end of the month. Says "We will first need the reanimation of Russia-US relations, then the restoration."
- Claims that the talks in Riyadh on 18 Feb were "an important step towards the settlement of the Ukraine crisis", but that the two sides "mainly discussed their own relations yesterday."
- Speaking to reporters on 18 Feb, President Trump appeared to blame Ukraine for the outbreak of the war, saying [about Ukrainian leaders] “You should have never started it...You could have made a deal.”
- The comments from Trump - upbraiding Ukraine for not ending the war sooner while failing to criticise Russia for its aggression, and demanding immediate elections - are likely to raise concerns both in Kyiv and European capitals that any deal eventually agreed upon between Russia and the US will not take into account Ukrainian or European views. This increases the risk that Ukraine will reject such a deal, which could result in the US withdrawing all support leaving Ukraine on the brink of defeat and Europe with an emboldened and belligerent neighbour on its eastern border.
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FOREX: FX OPTION EXPIRY
Jan-20 08:50
Of note:
EURUSD 1.4bn at 1.0300/1.0325.
EURUSD 2.5bn at 1.0300/1.0325 (tue).
USDJPY 1.3bn at 156.00 (tue).
AUDUSD 1.69bn at 0.6210 (wed).
EURUSD 3.24bn at 1.0295/1.0320 (thu).
- EURUSD: 1.0300 (1.02bn), 1.0325 (475mln).
- AUDUSD: 0.6185 (550mln).
- NZDUSD: 0.5660 (329mln).
- USDZAR: 18.7000 (300mln).
GERMAN DATA: German PPI Rises in December, ex-Energy Broadly Unchanged
Jan-20 08:31
German PPI rose to 0.8%% Y/Y in December, up from November's +0.1% Y/Y, but remains lower than consensus expectations of +1.1% Y/Y. Sequentially, PPI fell -0.1% M/M (vs +0.3% cons; +0.5% prior).
- Consistent with German CPI in December, energy deflation was less prominent than before, at -0.2% Y/Y (vs -2.4% November). This is the highest Y/Y rate since May 2023.
- That leaves ex-energy PPI broadly unchanged vs November, at 1.2% Y/Y - the rate has been hovering around that level for five months now.
- Looking at the non-energy categories, a deceleration in intermediate goods inflation stands out the most, at +0.1% Y/Y vs +0.4% in November. This comes as the trend of an acceleration in the category started to stall in September, and should, on the margin, be a positive sign regarding contained mid-term core goods CPI inflation in Germany.
- For further details see table.
GILTS: Flat Start, Syndication & Domestic Data Eyed This Week
Jan-20 08:24
Gilts little changed early today.
- Futures -12 at 91.55, trading in a 91.45-66 range.
- The structural trend condition in futures remains bearish, although the recent break above the 20-day EMA increases the threat to the overarching technical theme.
- Initial support and resistance at 90.68/91.96.
- Yields little changed to 1.5bp lower, front end outperforms.
- GBP STIRs still roughly in line with pre-gilt open levels, ~64bp of cuts priced through year-end.
- On the lookout for the syndicated tap of the 4.375% Jan-40 gilt. Bookrunners have indicated this will likely be tomorrow’s business, in line with our own expectation.
- Much of the weekend domestic headline flow centred on political posturing ahead of U.S. President Trump’s inauguration.
- That event dominates the macro calendar today.
- UK labour market data is due tomorrow, our full preview will be out later today, greater colour available in the pre-gilt open STIR bullet.
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