RUSSIA: Lavrov-Putin 'Ready To Meet Zelenskyy When Summit Agenda Ready'
Aug-22 11:46
Russia's RIA reports that Foreign Minister Sergey Lavrov has stated that no meeting between President Vladimir Putin and Ukraine's Volodymyr Zelenskyy is planned, 'but Putin is ready to meet him when a summit agenda is ready. Claims that "Russia has agreed to be flexible on a number of points raised by Trump in Alaska."
- Lavrov claims that Zelenskyy, when presented with several principles that Russia claims are necessary for a peace, said "no to everything".
- The comments would appear to continue the Kremlin's strategy of appearing to be open to direct talks with Ukraine, called for by US President Donald Trump, while obfuscating around the actual details of when a meeting could take place.
- Reuters reported on 21 Aug that as part of any peace deal with Ukraine, Russian President Vladimir Putin has four key demands of Kyiv: a full ceding of the Donbas, a formal renunciation of ambitions to join NATO, a commitment to neutrality, and no Western peacekeepers on Ukrainian soil. (see 'RUSSIA: RTRS-Putin's Demands For Peace-All Of Donbas, No NATO, No Western Troops').
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OUTLOOK: Price Signal Summary - Gilts Remain Above recent Lows
Jul-23 11:45
- In the FI space, Bund futures traded higher again, on Tuesday. This week’s gains have resulted in a move through resistance around the 50-day EMA, at 130.24. The clear break of the EMA undermines a recent bear theme and highlights a possible reversal. Sights are on 130.85 61.8% of the Jun 13 - Jul 14 bear leg. A break of this level would open 131.33, the Jun 20 high. Key support and the bear trigger has been defined at 129.08, the Jul 14 low.
- Gilt futures traded sharply higher on Tuesday, extending the recovery from the Jul 18 low. The contract has breached the 20-day EMA, strengthening a bullish theme and this undermines the recent bearish condition. A continuation higher would signal scope for a climb towards 92.42 next, a 50.0% retracement of the Jul 1 - 18 bear leg. On the downside, key support and the bear trigger has been defined at 91.08, the Jul 18 low.
EGBS: Growth Concerns Modestly Outweigh Inflation Aspects Of Tariff Retaliation
Jul-23 11:42
- EGBs see the growth negative angle outweighing higher near-term inflation risks on the potential US-EU trade escalation as Bloomberg reports the EU plans to react with 30% tariffs of its own if no deal.
- German 2Y yields are almost 1bp lower post headlines but still +0.4bp on the day. The curve holds its modest steepening with 2s10s at 79.7bp (+1.1bp on the day).
- EUR 1Y CPI ex-tobacco inflation swaps are also holding lower, at 1.63% (-1bp on the day), although the 1Y1Y at 1.82% is at its highest since late June and having last been more clearly higher prior to early April US reciprocal tariff announcements.
TARIFFS: Highlights Of Bessent's Bloomberg TV Interview
Jul-23 11:25
Tariff-related excerpts from Bessent's Bloomberg interview.
On Japan
- Bessent: Japan got the 15% [tariff] rate because they were willing to provide this innovative financing mechanism.
- This is all new capital. It's going to be targeted at strategic industries.
On EU
- Bloomberg TV: Can anyone get below 15%? Is this the new floor? Is the EU still trying for a 10% baseline?
- Bessent: Repeats result of innovative package. Brussel’s hasn’t come up with anything innovate yet. Talks are going better than they had been. I think we are making good progress. Repeats previous line about collective action problem in EU.
On China
- Bessent: We are in a good place with China now. There is the potential for a big beautiful rebalancing between the US and China. […] We believe they should become more of a consumption economy. If they are willing to do down that route we could do it together.
- Bloomberg TV: You told me last week the market does not need to worry about Aug 12. That’s the deadline for this current detente between Washington and Beijing. What’s the new deal?
- Bessent: Again, I think we could roll it forward, maybe on a 90 day increment. The goods news here is that we are back on track with negotiations. I think we can get into a very good cadence of regular meetings.
- A Trump-Xi meeting wouldn't be before Labor Day.
