US: MNI POLITICAL RISK - Trump And Xi Hold First Call Since June
Sep-19 12:19
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- President Donald Trump is back in Washington following his two-day trip to the United Kingdom. At around 08:00 ET 13:00 BST, Trump began a first call with Chinese President Xi Jinping since June. At 15:00 ET 20:00 BST, Trump will sign executive orders in the Oval Office.
- The Trump administration asked the Supreme Court to pause a federal appeals court ruling that allowed Federal Reserve Governor Lisa Cook to continue to serve on the Fed Board, despite President Trump's attempt to fire her.
- The UK government released a 'Memorandum of Understanding' between the US and UK on a ‘Technology Prosperity Deal’ described by UK Prime Minister Keir Starmer as “groundbreaking”.
- Trump said Russian President Vladimir Putin “really let me down” but previewed no new action against Moscow, reiterating that Europe must stop buying Russian energy.
- India and the US have 'intensified' efforts to reach a trade deal following talks in New Delhi.
- The House of Representatives will vote today on a stopgap government funding bill, effectively challenging Senate Minority Leader Chuck Schumer (D-NY) to shut down the government.
- Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum agreed to boost trade and increase cooperation.
- The Trump administration is considering a plan to jump-start manufacturing.
- Republicans are showing little interest in a Democratic plan to scrutinise Trump's military action against alleged Venezuelan drug vessels.
- Poll of the Day: Republicans believe Trump is striking the right balance on Gaza.
Full Article: US DAILY BRIEF
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GILTS: 30-Year Yields Off Highs, Uptrend Intact
Aug-20 12:18
{GB} GILTS: While gilt bears managed to force the highest closing level for 30-Year yields seen in the current cycle on Monday (5.611%), they failed to challenge the intraday high registered in early April (5.659%), with the subsequent recovery leaving the benchmark at 5.55%.
- While demand for long end paper has been robust in instances of primary issuance, structural reduction in pension holdings reduce demand in the secondary market, while the UK’s ongoing fiscal fragility provides background pressure (at a minimum).
- As a result, the uptrend in play since the ’21 low remains intact, with that support line ~20bp below prevailing levels at typing.
Fig. 1: UK 30-Year Gilt Yield (%)
Source: MNI - Market News/Bloomberg Finance L.P.
STIR: SONIA/Euribor Dec '26 Spread Away From Multi-Week Highs
Aug-20 12:08
Dovish ’26 BoE pricing moves have pulled the SONIA/Euribor Dec ’26 (Z6) spread off yesterday’s multi-week closing highs.
- We suggested that the data wasn’t much of a gamechanger for near-term BoE meeting pricing in the immediate aftermath of the release and that seems to have played out, with the initial hawkish reaction in the front contracts countered.
- The recent run of UK data had resulted in ~18bp of spread widening since August 1, as of yesterday’s close.
- The spread is mainly being driven by the UK leg, with Euribor pricing more stagnant since the July ECB decision.
- The main development since the ECB's July decision has been the EU-U.S. trade agreement. While the agreement reduced near-term trade policy uncertainty, the level of tariffs is more onerous than assumed in the ECB's baseline scenario.
- That said, ECB President Lagarde noted this morning that the agreement is "well below" the June MPR projection severe scenario". How the agreement is incorporated into the September forecast round will be a key focus as we move forwards.
- A reminder that the ECB adopted a less dovish round of rhetoric after its most recent cut.
- Euribor futures start to price chances of a hiking cycle in H226, after leaning towards one further cut in the current cycle.
Fig. 1: SONIA/Euribor Dec’26 Spread (bp)
Source: MNI - Market News/Bloomberg Finance L.P.
STIR: Repo Reference Rates
Aug-20 12:03
- Secured Overnight Financing Rate (SOFR): 4.33% (-0.01), volume: $2.760T
- Broad General Collateral Rate (BGCR): 4.31% (-0.02), volume: $1.144T
- Tri-Party General Collateral Rate (TCR): 4.31% (-0.02), volume: $1.118T
- (rate, volume levels reflect prior session)
