US: MNI POLITICAL RISK - Trump To Make Oval Office Announcement
Aug-22 12:26
Download Full Report Here
- At 12:00 ET 17:00 BST, President Donald Trump will make an announcement in the Oval Office. There have been no clues on the subject, but it comes shortly after Fed Chair Jerome Powell's speech at Jackson Hole.
- Trump joined federal law enforcement officials in DC to tout his crackdown on crime. The Trump administration is reviewing more than 55 million visa-holders for violations that could lead to deportation.
- A New York court tossed out a $500 million civil fraud judgment against Trump. A federal judge ordered 'Aligator Alcatraz' to be dismantled.
- Sales of existing homes rose unexpectedly in July.
- The White House expects a new 25% tariff on India to go into effect on August 27, as planned.
- South Korean President Lee Jae Myung will travel to Japan ahead of a first meeting with Trump next week.
- Trump issued a cryptic statement hinting at rolling back restrictions on Ukraine's use of long-range weapons, as Moscow obfuscates Trump's Ukraine peace process.
- Trump is considering using CHIPS Act funding for critical minerals. Trump’s trade war risks derailing a years-long effort to unlock Brazil’s critical mineral reserves.
- Israeli PM Benjamin Netanyahu said Israel will resume hostage-for-ceasefire negotiations with Hamas, after approving an IDF assault on Gaza City.
- The E3 and Iran are engaging in last-minute diplomacy aimed at avoiding 'snapback' UN sanctions.
- Poll of the Day: The foreign-born population of the US declined for the first time since the 1960s.
Full Article: US DAILY BRIEF
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: MNI Europe Pi: EGB Long-Setting Into ECB
Jul-23 12:16
Long-setting has been the theme going into Thursday's ECB decision, at least for EGBs over the past week (with Gilts bucking the trend), per our latest Europe Pi positioning update (Download Full Document Here)
- This leaves European bond futures positioning mixed, with three contracts structurally short, two flat, and two long/very long.
- These are mostly unchanged since our last update on July 7.
EGB OPTIONS: DUU5 107.00/107.20/107.40 Call Fly Lifted
Jul-23 12:09
DUU5 107.00/107.20/107.40 call fly paper paid 5.5 on 4K.
GBP: Contrasting Analyst Views on Trajectory for Sterling
Jul-23 12:07
In similar vein to yesterday’s session, GBP has relatively underperformed its g10 peers on Wednesday, as the higher beta AUD and NZD outperform amid the more optimistic outlook for trade discussions between the US & China. However, cable has still consolidated back above the 1.35 handle, further negating the bearish technical developments seen last week. Most recent analyst views point to contrasting sentiment on the short-term trajectory for sterling:
- *Bank of America: By far the most pervasive driver for GBP has been its failure to break above long-held ranges. Fiscal dominance has played its part, but this is not an issue specific to the UK. Rising global fiscal concerns and self-inflicted wounds have, however not helped the range-break cause particularly with outsized GBP long positioning. BofA feel the conditions are now in place for a bounce in GBP through the summer months.
- *Goldman Sachs have recently grown more negative on Sterling’s medium-term prospects versus European peers, underpinned by a challenging valuation picture and a lower-than-priced BoE terminal rate. But the finely balanced fiscal backdrop and large two-sided surprises in the incoming data continue to complicate the nearer-term outlook for the currency.
- GS think a rising fiscal risk premium is the main driver of the recent outperformance of EUR/GBP versus their GSBEER model-implied estimate, and continues to dampen Sterling’s beta to front-end rate differentials. GS expect it will pay to wait for some of the elevated fiscal premium in the currency to recede, before targeting Sterling downside on European crosses at better levels.
- *Danske: The pressure on GBP has mounted as the UK economy has showed more pronounced signs of weakness, in particular in the labour market. Danske increasingly see domestic factors and the relative growth outlook between the UK and the euro area as becoming GBP negatives. Additionally, they think a global investment environment characterised by elevated uncertainty, widening credit spreads and a positive correlation to a USD negative environment, in their view, favours a weaker GBP. Danske forecast EUR/GBP to move higher towards 0.89 on a 6–12-month horizon.
