US: MNI POLITICAL RISK - Pope's Funeral Offers Access To Trump
Apr-25 12:15
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- President Donald Trump departs Washington today for the funeral of Pope Francis, providing an opportunity for sideline meetings with world leaders looking for clarity on trade policy.
- Trump touted 200 yet-to-be-announced trade deals and said that Chinese President Xi Jinping called him, in a wide-ranging interview with Time Magazine that is likely to add to the uncertainty over the level of communication between Washington and Beijing.
- Treasury Secretary Scott Bessent told reporters that his team will be “talking technical terms” on a trade deal with South Korea as early as next week.
- Markets appear receptive to Trump's apparent softening on China but analysts warn that Beijing is in no rush to make a deal with Trump, and a partial reduction of China tariffs may offer little incentive for a deal.
- EU trade chief Valdis Dombrovskis is expected to meet Bessent today.
- The Ways and Means Committee is looking to mark up the tax portion of the Republican reconciliation bill on May 12 and 13, with tax writers considering a new cap on business SALT.
- Trump’s chief negotiator arrived in Moscow this morning for his fourth meeting with Russian President Vladimir Putin after Trump sharpened his tone towards Moscow.
- Trump indicated he would be open to meeting with Iranian leaders as he pushes for a new nuclear accord.
- Poll of the Day: Trump’s approval rating continues to decline “slightly quicker than his recent predecessors.”
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UK FISCAL: Spring Statement: Key Timings
Mar-26 12:14
- Chancellor Reeves will begin delivering the Spring Statement in the House of Commons immediately after Prime Ministers’ Questions concludes – so slightly after 12:30GMT / 13:30CET / 8:30ET.
- Given the limited content, the FT is reporting that the speech will only be 25 minutes long.
- The gilt remit and full OBR forecasts are normally published when the statement is finished – so around 13:00GMT (possibly slightly before or a little later). Note that in previous years with longer speeches, this has been more like 13:30.
- We would then expect the DMO to announce the consultation agenda for its FQ1 issuance (the remainder of April through to June) at 15:30GMT. This will likely include a more granular breakdown of which auctions in FQ1 are for each maturity bucket, with guidance on which gilts will be issued (see page 4 of the MNI Spring Statement Preview).
- The DMO is to hold consultations with investors and GEMMs on 31 March.
- The rest of the FQ1 (remainder of April through to June) gilt operations calendar will be published at 7:30BST on Friday 4 April.
OUTLOOK: Price Signal Summary - Key Support In Gilts Remains Exposed
Mar-26 12:10
- In the FI space, Bund futures are holding on to the bulk of their recent gains. Resistance remains intact and - for now - the latest move higher is considered corrective. The move higher has allowed an oversold trend condition to unwind. Initial firm resistance to watch is seen at 129.41, the Jan 14 low. A recent impulsive sell-off reinforced a bear theme and signals scope for an extension towards 126.28 next, a 2.618 projection of the Feb 5 - 19 - 28 price swing. Further out, 126.00 is also within range.
- The short-term trend outlook in Gilt futures remains bearish and recent gains appear to have been a correction. This week’s move lower reinforces a bear theme. Key short-term resistance has been defined at 93.01, the Mar 20 high. A break of this level is required to highlight a bullish condition. For now, attention is on support at 90.71, the Mar 6 low and bear trigger. A break of this level would resume the downtrend.
UK FISCAL: Remit expectations ahead of the Spring Statement (2/2)
Mar-26 12:05
- Medium-dated issuance is expected to see a larger increase, with the median estimate at GBP97bln. This would represent 32.4 % of issuance (30.9% last March, 31.3% outturn when including the upsized syndications). We would once again expect two 10-year syndications in the fiscal year.
- Long-dated issuance is expected to fall back by most with median estimates at GBP51bln which makes up 16.4% of total issuance (down from the 18.5% target a year ago and 20.7% outturn). This bucket has the potential to be upsized through syndications fairly substantially, however. We would pencil in at least 3, potentially 4 long-dated syndications, but see little issuance longer than 30-years.
- Linker issuance is also expected to reduce, to a median of GBO30.5bln (10.0% of total). This would be down from the originally planned 10.9% (11.5% outturn).
- A number of analysts are also arguing for a larger-than-usual unallocated bucket. Estimates here range from GBP10.5bln through to GBP28.0bln with the median expectation at GBP16.6bln. This would be considerably higher than the GBP10bln seen in the 2024/25 fiscal year.
- T-bill estimates range from an unchanged stock to the end 2024/25 level to a GBP11bln increase, with the median at GBP5bln. NS&I funding is expected to remain broadly consistent with 2024/25’s GBP9.5bln level.
