FRANCE: Macron Hosts Scholz In Meeting To Discuss Trump Impact
Jan-22 13:28
Speaking in Paris, where he is hosting German Chancellor Olaf Scholz, French President Emmanuel Macron speaks on EU and national responses to the second Trump presidency in the US. Says "More than ever [it is] up to Europeans, and France and Germany to protect our sovereignty in light of the arrival of Trump."
- Macron: "Europe must not only spend more on defence, but also have its own defence strategy." Scholz: "Germany and France could do more together on defence". Says he has reassured Ukrainian President Volodymyr Zelenskyy that "German support for Ukraine will remain."
- Scholz "Europe must be strong in a world in flux...Trump will be a challenge...We will analyse in Europe the measures Trump has announced."
- While both sides have backed increased action on defence, deep divisions remain. Macron has talked up significant spending on militaries and developing 'strategic autonomy' in case of Trump drawing down US support. Scholz on the other hand has dismissed the idea of spending 5% of GDP on defence, as mooted by Trump, as unaffordable.
- As Politico notes, "The two sides are pulling in the same direction on competitiveness and cutting red tape. [...] An EU bureaucracy reduction plan is due to be launched at the beginning of February. The Clean Industrial Deal, which Brussels intends to present on Feb. 26 [...] contains ideas that have the blessing of Paris and Berlin."
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US TSYS: JPM Recommend Longs 2s
Dec-23 13:11
Late on Friday J.P.Morgan recommended adding longs in 2s.
- They reasoned that “despite the hawkish Fed outcome, it’s clear the reaction function skews dovishly, as the two choices in front of the central bank are either to continue to lower rates, albeit at a slower pace, or hold”
- “Accordingly, we think markets will continue to price in easing, and this should act as an anchor for the front end. Against this backdrop, valuations appear attractive: front-end yields have retraced to their highest levels since midyear and are pricing in a minimal amount of easing over the next 1- to 2 years”
US: MNI POLITICAL RISK - Trump Names Key Defense And Econ Nominees
Dec-23 13:04
- US President-elect Donald Trump delivered a wide-ranging 90-minute speech in Phoenix, Arizona on Sunday, doubling down on a new threat to bring the Panama Canal back under US control.
- Trump suggested he could meet with Russian President Vladimir Putin shortly after assuming office on January 20, repeating that resolving the war in Ukraine is “one of the things I want to do quickly.”
- Trump announced another round of executive branch nominations, including Stephen Miran to chair the Council of Economic Advisers – a three-member panel that advises the president on economic policy.
- Trump nominated Stephen Feinberg as Deputy Secretary of Defense and Elbridge Colby to serve as Under Secretary of Defense for Policy. Colby, a prominent China hawk, is likely to advocate Trump dedicate more military resources to the Indo-Pacific and lean on European powers to step up defence commitments.
- Rep. French Hill (R-AK), the incoming Chair of the House Financial Services Committee has been, “pushing for innovation in the banking sector for nearly half a century.”
- The Biden administration has scrapped plans for a mass cancellation of student debt, with Education Secretary Miguel Cardona acknowledging, “uncertainty around the implementation” of the proposals.
- The Biden administration has launched an investigation into Chinese-made "legacy" semiconductors that could result in additional tariffs on mature-technology chips.
- Poll of the Day: Swing-state voters have positive expectations about how a Trump presidency could affect their personal finances.
Full article: US Daily Brief
STIR: Repo Reference Rates
Dec-23 13:00
- Secured Overnight Financing Rate (SOFR): 4.30% (+0.00), volume: $2.330T
- Broad General Collateral Rate (BGCR): 4.28% (+0.02), volume: $849B
- Tri-Party General Collateral Rate (TGCR): 4.28% (+0.02), volume: $817B
- (rate, volume levels reflect prior session)
