UKRAINE: Macron-Ukraine Must Have 'Realistic Position' On Territorial Questions
Speaking at the annual meeting of ambassadors at the Elysee Palace, French President Emmanuel Macron says “We cannot let Russia win in Ukraine. For the international order and for our own security...[We] must organise ourselves so Ukraine [is] in [the] best position to negotiate." Says that there is "no quick and easy solution", and "no solution can be found without Ukraine and Europe being involved in the process."
- In comments that could gain attention, Macron says that "Ukraine has to have a realistic position on territorial questions", potentially indicating that France will push for a settlement that sees Kyiv recognise Russian control over the areas of Ukraine it currently holds and claims as part of the Russian Federation (Luhansk, Donetsk, Zaporizhzhia, and Kherson as well as Crimea).
- Macron says the "role of the United States must be to convince Russia to come to the table".
- In late 2024, President Volodymyr Zelenskyy admitted that Ukraine did not have the military might to retake the territories annexed by Russia, but this did not amount to an admission that Kyiv would recognise the land as Russian territory.
- There remain divisions both in Ukraine, but also between its allies on the 'maximalist' (i.e. all of Ukraine's territories must be returned under any agreement) and the 'realpolitik' (concessions of some territory will be essential for any peace agreement) views.
- Situation likely to remain in semi-stasis (politically if not on the frontline) until President-elect Donald Trump takes office in the US on 20 Jan.
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MNI UST Issuance Deep Dive: Dec 2024 (2/2)
Throughout November’s policy and market volatility, though, Treasury auctions largely impressed, with 5 of 7 nominal coupon sales trading through.
- Auction Results: November’s nominal coupon auctions were generally strong, with five out of seven auctions trading-through, of which four saw a positive reading on MNI’s Relative Strength Indicator (RSI). The remaining two auctions; 3 and 20-year auctions tailed. See page 2.
- Upcoming Supply: Issuance resumes next week with sales of $58B in 3Y Note, $39B in 10Y Note (reopen), and $22B in 30Y Bond (reopen). December is set to see $15B in nominal Treasury coupon sales, in addition to $22B in 5Y TIPS and $28B FRN for a total of $365B – slightly below the Oct and Nov totals of $369B which were joint-highest since Oct 2021.
- MNI's review includes a calendar of upcoming auctions and buyback operations.
US TSYS/SUPPLY: MNI UST Issuance Deep Dive: Dec 2024 (1/2)
MNI's latest US Treasury Issuance Deep Dive has just been published (PDF link here):
November proved a dramatic month for Treasuries. Yields were volatile before and after the Nov 5 election - after ending October at 4.28%, 10Y yields peaked at five-and-a-half-month high just above 4.50% mid-month before closing November just below 4.18%, as markets attempted to price in the implications of a Republican “sweep”.
- Also buffeting rates was speculation over the would-be successor to Treasury Secretary Yellen. President-elect Trump’s selection of hedge fund manager Scott Bessent was greeted with bull flattening in the curve, implying perhaps that he’s seen as more cautious on fiscal deficits than some of the alternatives (he has expressed support for halving the annual budget shortfall to 3% of GDP).
- The first quarterly Refunding process of Bessent’s Treasury is in early February, by which point we may start to have a better sense of the incoming administration’s approach to both fiscal policy and to more issuance-specific considerations such as duration management.
- Bessent for instance has argued that Yellen’s Treasury erred from a risk management perspective by boosting short-duration issuance, and there are suggestions he would be in favor of reversing course, telling Bloomberg in June “When rates are very low, you should extend duration…I think it’s very unfortunate what Secretary Yellen’s doing. She’s financing at the front end, and she’s making a bet on the carry trade, which is not good risk management.”
US LABOR MARKET: MNI US Employment Insight: Soft Enough To Keep Fed Cutting
Our latest Employment Insight has just been published and emailed to subscribers.
