US: MNI POLITICAL RISK - Trump Punts Tariffs And Pivots On Ukraine

Jul-09 12:23

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Executive summary:

President Donald Trump will hold a White House lunch today with the leaders of Gabon, Guinea-Bissau, Liberia, Mauritania, and Senegal to discuss “commercial opportunities”.
Markets have largely shrugged off Trump’s latest tariff ultimatum, likely assessing that major trade partners will strike preliminary agreements before the new August 1 deadline or receive another extension.
Markets have been less sanguine about the prospect of a punitive new tariff on copper imports, designed to reshore copper production in the United States.
South Korea is eyeing an in-person meeting between Trump and President Lee Jae-myung. Japanese Prime Minister Shigeru Ishiba said Tokyo and Washington will "swiftly proceed with negotiations towards the newly set August 1 deadline".
Trump told reporters yesterday he would "probably" tell the European Union within two days what tariff rate it can expect.
Trump's economic advisor, Kevin Hassett, has emerged as the slight favourite to be nominated as the next Fed chair.
Senate leaders are expected to meet with Israeli Prime Minister Benjamin Netanyahu this afternoon as negotiators in Qatar struggle to make a breakthrough on a Gaza ceasefire.
Trump is leaning closer to endorsing a new Russia sanctions package. The primary concern for the White House is how to calibrate secondary sanctions without dramatically increasing tensions with China and India.
Poll of the Day: Very few Americans support reducing or eliminating funding for social services.

Please find the full article attached below: US DAILY BRIEF

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Jun-09 12:18

USDJPY was well supported Friday as markets focussed on the above-estimate headline change in NFP and the sizeable beat for average hourly earnings growth in the US. The Fed’s Harker subsequently said he sees steadiness in 'solid' latest job data.
Fresh weekly highs for USDJPY ensued, with the pair rallying as high as 145.09 and essentially matching the initial target of the 50-day EMA. Broader dollar weakness to start this week briefly tipped the pair back below 144.00, however, the ongoing cautious optimism surrounding potential progress for US/China trade talks have seen the pair edge higher to 144.50 in most recent trade. 142.12, the May 27 low, remains the important support.
Notably, MUFG see the current USDJPY levels post-NFP data as close to peaking with scope building for another sustained move back toward the 140.00-level. They see the BoJ as likely turning more hawkish if global financial market conditions remain more favourable after the notable improvement following the de-escalation of trade tensions.
MUFG highlight the inflation backdrop is increasingly likely to prompt a hawkish shift in BOJ policy. They add the BoJ will also not want to see JPY depreciation given the risks of an FX move feeding further super-long JGB instability that in turn would lead to possible complaints by the US.

Jun-09 12:15

Late on Friday J.P.Morgan recommended initiating maturity-matched 3.875% Feb 2043/3% Feb 2049 swap spread curve flatteners (0.8/1 weighted)

This is a micro RV play, as they noted that “the maturity-matched swap spreads between the 3.875% Feb 2043 and the 3% Feb 2049 issues are well (and positively) correlated but currently appear mispriced by about 2bp”.

Jun-09 12:10

Parker-Hannifin (PH A3[P]/BBB+/A-): New Issue FV

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