RUSSIA: Lavrov Continues Claims That Ukraine Is Holding Up Peace Process
Aug-21 10:34
Speaking at a press conference alongside India's Minister of External Affairs S. Jaishankar, Russian Foreign Minister Sergey Lavrov claims that Ukraine "clearly shows it is not interested in a sustainable and long-standing peace settlement", adding that "Ukraine's position indicates that Kyiv wants to undermine [US President Donald] Trump's efforts to resolve the conflict."
- Lavrov says "Russia was always ready for an honest talk about security guarantees for Ukraine", and reiterates his comments from 20 Aug, suggesting that the Istanbul draft agreement proposed by Moscow in the early days of the war in 2022 (dismissed by Kyiv and its allies as a capitulation) is a basis for such guarantees.
- Says that, "unlike the 2022 discussions", some ongoing discussions about security guarantees for Ukraine are "hopeless". Says the "so-called coalition of the willing is trying to undermine the progress made at the Alaska summit [and] trying to shift the focus away from resolving the root causes of the conflict."
- On the prospect of direct talks between President Vladimir Putin and Ukraine's Volodymyr Zelenskyy, Lavrov says, "I remind you of the Zelenskyy decree on no talks with Putin". Claims that "Putin has repeatedly said he is ready to meet", but that "all issues will need to be worked out properly."
- Lavrov's comments are part of a sustained effort by Kremlin officials to turn the Trump administration against Kyiv in the ongoing battle for the US president's favour. Latest reports suggest that Trump is keen to step back from a frontline role until a Putin-Zelenskyy meeting has taken place.
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LOOK AHEAD: Tuesday Data Calendar: Regional Fed Mfg/Non-Mfg, Non-Pol Fed Speak
Jul-22 10:34
- US Data/Speaker Calendar (prior, estimate)
- 07/22 0730 Fed VC Bowman on CNBC
- 07/22 0830 Fed Chair Powell opening remarks regulatory conf
- 07/22 0830 Philadelphia Fed Non-Mfg Activity (-25.0, --)
- 07/22 1000 Richmond Fed Mfg Index (-7, -2)
- 07/22 1000 Richmond Fed Business Conditions (-16, --)
- 07/22 1130 US Tsy $80B 6W bill auction
- 07/22 1300 Fed VC Bowman fireside chat large bank conf (no text, Q&A)
- Source: Bloomberg Finance L.P. / MNI
OUTLOOK: Price Signal Summary - USDJPY Bull Cycle Remains In Play
Jul-22 10:33
- In FX, EURUSD has recovered from last week’s 1.1557 low, on Jul 17. Recent weakness is considered corrective. Support to watch lies at the 50day EMA , at 1.1525. A clear break of this average is required to signal a stronger reversal. For now, trend indicators continue to highlight a dominant uptrend. A stronger resumption of gains would open 1.1829, the Jul 1 high and the bull trigger.
- GBPUSD continues to trade above its recent lows. For now, short-term gains appear corrective and a bear threat remains present. Recent weakness resulted in a break of trendline support currently at 1.3480 - drawn from the Jan 13 low. The breach strengthens a bear theme, exposing 1.3335 next, the May 20 low. Initial firm resistance to watch is 1.3517, the 20-day EMA. A clear break of this average is required to highlight a potential base.
- A bull cycle in USDJPY remains in place despite the latest pullback and the pair is holding on to the bulk of its latest gains. Recent strength has resulted in a breach of resistance at 148.03, the Jun 23 high, and a move through key resistance at 148.65, the May 12 high. The break strengthens the bullish theme and opens 149.38, 50.0% of the Jan 10 - Apr 22 bear leg. On the downside, key short-term support to monitor is 145.85, the 50-day EMA.
FED: Slightly More Hawkish US Rate Path, Fed Regulation Conference In Blackout
Jul-22 10:25
- Fed Funds implied rates are little changed for 2025 meetings, up to 0.5bp higher, after yesterday’s modest range.
- Cumulative cuts from 4.33% effective: 0.5bp Jul, 15.5bp Sep, 28bp Oct, 44.5bp Dec, 55.5bp Jan and 70.5bp Mar.
- The SOFR implied terminal yield of 3.155% (SFRZ6) sees a slightly larger 2bp uptick but remains within recent ranges.
- Today sees unusually heavy Fedspeak considering its inside the FOMC media blackout period for the Jul 29-30 meeting. As such, it can’t touch upon monetary policy and is instead geared around Fed regulation (conference link here).
- Powell gives welcoming remarks at 0830ET before VC for Supervision Bowman speaks in a fireside chat on innovation with Sam Altman at 1300ET (Q&A only).
- Fed regulation is becoming an increasingly political topic amidst White House administration criticism. Not directly linked but a latest example was US Tsy Sec Bessent on X yesterday: "Today in a CNBC interview, I called for a review of the Federal Reserve. It is my belief that the central bank should conduct an exhaustive internal review of its non-monetary policy operations. Significant mission creep and institutional growth have taken the Fed into areas that potentially jeopardize the independence of its core monetary policy mission. While I have no knowledge or opinion on the legal basis for the massive building renovations being undertaken on Constitution Avenue, a review of the decision to undertake such a project by an institution reporting operating losses of more than $100 billion per year should be conducted.”
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