LNG: LNG Cargoes Could Divert from Atlantic as WAF Arb Opens to Asia

The House Energy and Commerce Committee is scheduled to meet shortly for the first of three critical markups today on President Donald Trump's ‘One Big Beautiful’ reconciliation bill. A livestream of the debate and markup, and the bill text can be found here. 

•  The OMB yesterday affirmed that E&C Committee Chair Brett Guthrie’s (R-KY) bill hit the target of $880 billion in cuts dictated by the Republican budget resolution. The CBO warned that the roughly $700 billion in health care cuts, including to Medicaid, would lead to an additional 13.7 million Americans going uninsured.
• If Guthrie’s final text fails to balance his conservative flank (calling for deeper cuts) and moderates (who want to preserve as much of Medicaid as possible), it could have consequences for the prospects of the package reaching Trump’s desk. And in the longer term, at the 2026 midterm elections.
• The markup could last more than 24 hours, with Democrats preparing a flurry of messaging amendments highlighting cuts to Medicaid. Politico notes: “Committee Democrats say it could run longer than the marathon 27-hour markup during Republicans’ unsuccessful attempt to repeal the Affordable Care Act in 2017.”
• For a full roundup of what to expect today, see the MNI US Daily Brief. 

• Goldman Sachs see "long cable positions as a viable risk-on expression for the coming few weeks [... but] continue to think the case for longs is less compelling over longer horizons [...] material risks of more BoE easing than is priced over the next 4-10 months, Sterling is significantly overvalued [on a longer-term] and the fiscal backdrop remains challenging."
• ING expect "Sterling to stay bid" ahead of the UK-EU summit on 19 May "potentially even seeing EUR/GBP break below 0.84".
• JP Morgan thinks that "over the medium term, sterling will be challenged via the monetary and fiscal channels, so short-term strength on potential UK trade deals should be faded. We see the dollar as the weakest G10 currency, so we do forecast GBP/USD strength, but focus our attention on GBP weakness vs currencies with fiscal space, relative growth advantages and carry-to-value rotation properties (EUR, NOK, SEK, CHF, JPY, AUD)."
• MUFG think the "pound [is well] placed to respond to changing developments in the global trade outlook".

• Taking account of price action since the US/China trade tensions easing, GBP stands around the middle of the G10 leaderboard, underperforming against the USD and higher-beta antipodean currencies amid firmer risk sentiment. However, sterling is advancing against the likes of the Euro as well as the low-yielders.
• Yesterday's BoE watchers conference confirmed the hawkish turn markets took away from last week's MPC meeting. This has weighed on EURGBP, which appears vulnerable to a continuation of the risk-on theme amid (i) Sterling's higher beta and (ii) the fact that a further hawkish repricing potentially has more room to run for Sterling- than Euro-denominated markets - through April 2026, GBP OIS prices 63bp of easing, and EUR OIS only 46bp from current levels.
• From a technical perspective, EURGBP trading to a fresh pullback low Monday is strengthening its current bearish theme. The cross has cleared support at 0.8468, the 50-day EMA, signalling scope for a continuation lower. Clearance of round number support at 0.8400 would open up 0.8359, a Fibonacci projection. On the upside, initial resistance is seen at 0.8541, the May 2 high.