US: MNI POLITICAL RISK - GOP Pivots On Reconcillation Tax Plans
May-09 12:25
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- President Donald Trump will sign executive orders in the Oval Office, then hold a key meeting with Ways and Means Committee Chair Jason Smith (R-MO) as the House struggles to strike a balance on Trump’s tax agenda.
- Trump and UK Prime Minister Keir Starmer announced the first trade deal since Trump imposed tariffs on US trading partners. Markets reacted positively, but Commerce Secretary Howard Lutnick acknowledged that other deals will be stickier.
- While Trump previewed the UK deal as ‘full and comprehensive,’ it is light on details, serving as a framework for broader negotiations. The primary takeaway: Trump’s 10% universal tariff is likely to remain a fixed revenue source.
- Trump said he expects trade talks with Chinese officials in Geneva to be “substantive”, indicating on Truth Social he is open to a tariff reduction for Beijing.
- The EU announced plans to hit back at America if trade negotiations fail.
- House Speaker Mike Johnson (R-LA) appears to be dialling down reconciliation targets, quietly conceding that hitting all of Trump’s tax and spending priorities is unlikely.
- Trump appeared to backtrack on a 'millionaire tax' and closing the carried interest loophole, a sign that the White House is looking for revenue.
- Senate Majority Leader Chuck Schumer (D-NY) orchestrated a party-line rejection of a landmark crypto regulation bill.
- Poll of the Day: Americans are more likely to disapprove than approve of Trump's handling of dozens of issues.”
Full Article: US DAILY BRIEF
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MNI EXCLUSIVE: MNI Speaks to Prominent Chinese Economist and Government Advisor
Apr-09 12:20
- MNI speaks to prominent Chinese economist and government advisor about the response to U.S. tariffs -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
GILTS: Futures Through Key Support; 30-year Sell-off Extends
Apr-09 12:20
Gilt futures have pierced key support at 90.55 (March 27 low), confirming a full reversal of the Mar 27 - Apr 7 rally. Futures are now -188 ticks at 90.24, with the psychological round-number 90.00 level providing the next downside target.
- UK PM Starmer’s attempts to reassure markets that the UK’s fiscal rules are “iron clad and here to stay” appear to have been unsuccessful, with a renewed downtick in US Treasury futures keeping the pressure on UK paper.
- The Gilt curve remains twist steeper, with 2-year benchmark yields down 1.5bps and 30-year yields up an impressive 28bps.
- 30-year benchmark yields are now at 5.63%, the highest since 1998. That sees 2s30s up ~30bps to 168.5bps, the steepest since 2017.
- A reminder that BOE Deputy Governor Breeden will speak on “UK Economic and Financial Stability Prospects” at an MNI webcast tomorrow at 1400BST. Register here.
JPY: USD/JPY Breaks to New Lows on Bessent Endorsement, Renewed Risk-Off
Apr-09 12:16
- Spot USD/JPY edges through the earlier lows of Y144.61, hitting the lowest level since early October last year in the process. A turn back toward low for the e-mini S&P and further weakness in US bonds are largely responsible.
- Given the broad spot volatility, no surprise to see very healthy G10 FX activity today, evident in volumes being well ahead of average for this time of day. Following the flurry of trade on the China counter-tariff headlines, CME JPY futures are posting total volumes near 40% ahead of average for this time of day. This activity will likely remain supported as markets are on watch for any comments from Trump on Beijing's actions today: Y144.13 marks next key support: the 76.4% retracement for the Sep 16 '24 - Jan 10 bull leg.
- Interestingly, Bessent highlighted that higher European and Japanese fiscal spending due to US-led measures are the reason for the dollar weakening bilaterally - and that a strong JPY is "natural".
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