MNI US OPEN - Trump Hosts Zelenskyy & European Leaders

Aug-18 09:42By: Hiren Ravji

EXECUTIVE SUMMARY

TRUMP HOSTS ZELENSKYY & EUROPEAN LEADERS FROM 13:00ET
AMID PRESSURE ON ZELENSKY TO MAKE DEAL, US TO OFFER SOME SECURITY GUARANTEES
TRUMP TRADE ADVISER SAYS INDIA OIL LOBBY IS FUNDING PUTIN'S WAR MACHINE
CHINA’S RARE-EARTH PRODUCT EXPORTS HIT SIX-MONTH HIGH

Figure 1: Ukraine front line as of August 12

Source: BBC, ISW

NEWS

GLOBAL POLITICAL RISK (MNI): Trump Hosts Zelenskyy & European Leaders From 13:00ET

US President Donald Trump hosts Ukrainian President Volodymyr Zelenskyy at the White House following the former’s meeting with Russian President Vladimir Putin on 15 August. Tho Oval Office meeting in February made headlines around the world after Zelenskyy was ambushed by Trump and Vice President JD Vance. This time around, Zelenskyy will have in-person support. German Chancellor Friedrich Merz, UK PM Sir Keir Starmer, French President Emmanuel Macron, Italian PM Giorgia Meloni, Finnish President Alexander Stubb and European Commission President Ursula von der Leyen will all be in attendance. Trump will meet with Zelenskyy first at 13:00ET/18:00BST/19:00CET, with a bilateral meeting a quarter of an hour later. Trump then greets European leaders at 14:15ET/19:15BST/20:15CET, followed by a multilateral meeting at 15:00ET/20:00BST/21:00CET.

RUSSIA/UKRAINE (WaPo): Amid Pressure on Zelensky to Make Deal, U.S. to Offer Some Security Guarantees

U.S. special envoy Steve Witkoff said Sunday ahead of a planned meeting at the White House with Ukrainian President Volodymyr Zelensky and European leaders that President Donald Trump and Russian President Vladimir Putin agreed to "robust security guarantees" during their summit in Alaska last week. "The United States is potentially prepared to be able to give Article 5 security guarantees, but not from NATO — directly from the United States and other European countries," Witkoff said in a "Fox News Sunday" interview.

US (BBG): Hurricane Erin Back to Category 4, on Track to Miss US Coast

Hurricane Erin has re-intensified after moving past Puerto Rico, with the dangerous storm expected to increase in size and remain over the ocean as it churns off the US East Coast later this week. Erin’s top winds strengthened to 130 miles (209 kilometers) per hour, bumping it back up to a Category 4 storm on the five-step, Saffir-Simpson scale, the US National Hurricane Center said in an advisory. Some additional intensification is forecast over the next 12 hours, the agency added.

US/INDIA (FT): Navarro: India’s Oil Lobby is Funding Putin’s War Machine — That Has to Stop

Here’s how the India-Russia oil mathematics works. American consumers buy Indian goods. India uses those dollars to buy discounted Russian crude. That Russian crude is refined and resold around the world by Indian profiteers in league with silent Russian partners — while Russia pockets hard currency to fund its war machine in Ukraine. As Russia continues to hammer Ukraine, helped by India’s financial support, American (and European) taxpayers are then forced to spend tens of billions more to help Ukraine’s defence.

GERMANY (MNI): IFO Economic Experts See Above Target Inflation for 2026

Economist expectations for inflation in Germany "over the next few years are stable at 2.4percent for 2025 and 2.3 percent for 2026 and 2028" according to an e-mailed press release with the global IFO Economic Experts Survey. This is noticeably above the Bundesbank expectations for these years, which are standing 2.2% for 2025, 1.5% for 2026 and 1.9% for 2027, respectively. IFO could not comment in detail on the discrepancy to us as they just collate the experts' numerical responses.

CHINA/EU (BBG): China Extends Probe Into EU Dairy Imports For Another Six Months

China will extend its probe into dairy imports from the European Union for another six months, delaying a decision as tensions linger between the two trade partners. The investigation, launched in August last year, has now been extended till Feb. 21 next year, due to the “complexity of the case,” the commerce ministry said in a statement released on its website.

CHINA (BBG): China’s Rare-Earth Product Exports Hit Six-Month High

China’s exports of rare earth products — including magnets — extended their recovery in July, months after Beijing threatened a disruptive global shortage by crimping supplies to fight a trade clash with US President Donald Trump. Volumes shipped overseas rose 69% to 6,422 tons in July for the highest tally since January this year, according to Bloomberg News calculations. The “products” category is typically dominated by magnets, tiny but critical manufacturing components that became central to US-China trade talks earlier this year.

CHINA (BBG): China’s Capital Outflows Hit Record Amid Liberalization Push

China’s capital outflows rose to a record in July, driven by mainland investors’ aggressive buying of Hong Kong assets following new market liberalization measures. Domestic banks wired a net $58.3 billion of funds overseas on behalf of their clients for securities investment last month, according to data released late Friday by the State Administration of Foreign Exchange. That’s the highest monthly outflow since records began in 2010.

BOLIVIA (MNI): Presidential Election Heads Into Run-off With No Left-Wing Candidate

The presidential election will head into a second-round run-off on October 19, after no candidate secured an outright majority in yesterday’s first round vote. The run-off will be contested between two right-wing candidates - Rodrigo Paz who had received 32% of votes, with 95% of votes counted, and Jorge Quiroga, who received 27% of the vote. The result ends more than two decades of left-wing leadership in Bolivia, after left-wing candidate Andronico Rodriguez won just 8% of the vote and the ruling MAS candidate, Eduardo del Castillo, only received 2.1%.

DATA

EUROZONE DATA (MNI): Goods Trade Surplus Continues Downtrend in June

The Euro area goods trade surplus was smaller than expected in June at E7.0bln (cons E14.5bln). The seasonally adjusted equivalent meanwhile fell to just E2.8bln vs E15.6bln in May, the lowest monthly surplus since July 2023. It represents a seeming continuation of the payback seen since the spike in Feb-Mar underpinned by US tariff front-running. June's "decline was mainly driven by a drop in the surplus of chemicals and related products, which fell from E4.4bn to E15.1bn", Eurostat comments on the non-SA data

SWITZERLAND DATA (MNI): Weak Q2 Industrial Production Confirms GDP Commentary

Swiss industrial output declined in Q2, printing -2.46% Q/Q, the weakest consecutive print since Q1 2023 but that's coming from a very strong 3.63% in Q1. The print confirms the expected slowdown in Swiss manufacturing after the statistics office commented on last week's Q2 flash GDP (0.1% Q/Q) as "the negative performance in industry has been counterbalanced by gains in the services sector". The SNB is likely to remain focused on inflation developments in their near-term monetary policy decisions.

CHINA DATA (MNI): China Car Exports Up M/M in July

MNI (Beijing) China’s export of car passenger vehicles reached USD8.9 billion in July, up 13.4% m/m, of which electric vehicles totalled USD3.3 billion, up 25.0% m/m, the Wind data agency reported on Monday, quoting data released by the General Administration of Customs. From January to July, China’s car passenger vehicles totalled USD53.2 billion, up 8.6% y/y, with electric vehicles at USD19.2 billion, up 1.5%, the data showed.

RATINGS: Ireland & Latvia Affirmed on Friday

Sovereign rating reviews of note from after hours on Friday include:
• Moody's affirmed Ireland at Aa3; Outlook Positive
• Morningstar DBRS confirmed Latvia at A, Stable Trend

FOREX: Markets Look More Neutral into Ukraine Summit, Jackson Hole

The USD trades furtively stronger early Monday, largely following a phase of EUR/USD sales that pressed the price back below 1.17 and through the Asia-Pac lows in early trade. The move came in tandem with equity weakness and concurrent UST strength, and while moves are shallow (EUR/USD remains well clear of any test of Thursday's pullback low at 1.1631), the price action shows that markets are wary of over-optimism after the Putin-Trump meeting that resulted in very little progress, and may be more comfortable trimming USD positioning to a more neutral poise (last week's CFTC update showed the USD net short trimmed off a multi-year low) headed into Powell's Jackson Hole appearance Friday.
Despite a more sensitive equity market, AUD and NZD mildly outperform, helping AUD/USD hold its ground above the 0.6500 level. This keeps AUDUSD inside a range. From a trend perspective, the condition remains bullish and key resistance to monitor has been defined at 0.6625, the Jul 24 high. Clearance of this level would confirm a resumption of the uptrend and open 0.6677, a Fibonacci projection.
Optionality today includes sizeable strikes between 1.1600-50 (approx. E2.2bln), with AUD/USD also notable interest between $0.6500-10 (A$690mln) expiring today.
Focus for the duration of the session rests on President Trump's meeting with Ukraine's Zelenskyy at the White House. The meeting follows Friday's somewhat disappointing summit held between Trump and Putin - and while concerns remain over Zelenskyy's last appearance in the Oval Office, this time Germany's Merz, UK's Starmer and EU's von der Leyen will also be in attendance. Trump is to meet with Zelenskyy at 1300ET/1800BST. Trump then greets European leaders at 1415ET/1915BST.
Continued speculation over the plan for Powell's succession into 2026 remains the medium-term risk, and Powell's Jackson Hole appearance will be viewed through this lens. Of note, prospective Fed Chair candidate Bowman appears on Bloomberg TV later today, having dissented from the most recent Fed meeting to opt for a rate cut.

EGBS: Bunds Retrace Half of Friday’s Selloff But Bearish Threat Still Present

Bund futures have retraced around 50% of Friday’s sharp selloff, currently +29 ticks at 129.09. Similar to Friday, there hasn’t been a clear headline trigger for the rally.
A bearish threat is nonetheless present in Bunds, with resistance not seen till the 20-day EMA at 129.72.
The German curve has bull flattened, with 5s30s down 1.3bps to 99bps after closing above 100bps for the first time in six years on Friday. Yields are 1-4.5bps lower across the curve.
The 10-year BTP/Bund spread has tightened almost 2bps back to ~78.5bps, even as European equity futures decline 0.6% and 3m10Y EUR rates vol consolidates Friday’s 2.5bp increase.
The 10-year IRISH/Bund spread is marginally tighter at 23bps, after Moody’s affirmed Ireland’s sovereign rating at Aa3 on Friday, and retained its Outlook as Positive. The risk was for an Outlook downgrade to Stable.
The Euro area goods trade surplus was smaller than expected in June at E7.0bln (cons E14.5bln). The seasonally adjusted equivalent meanwhile fell to just E2.8bln vs E15.6bln in May, the lowest monthly surplus since July 2023.
Focus turns to headline flow stemming from Ukrainian President Zelensky’s meeting at the White House later today.

GILTS: Early Recovery Trimmed, Curve Flatter

Gilts are off session highs, with equity futures off session lows and crude oil regaining some poise.

Cross-market moves drove the early bid, with a lack of definitive progress in the Trump-Putin meeting (particularly when it comes to a palatable proposal for Ukraine) noted.
Elsewhere, others pointed to the market fading some of Friday’s bear steepening (which similarly lacked a clear headline trigger, with ongoing European focus on fiscal matters/issuance outlooks and Dutch pension reform noted back then).
Futures as high as 91.32 after trading 90.91 on Friday. Last ~91.10.
Still, bears remain in technical control. Fresh extension lower would target the May 29 low (90.59).
Conversely, bulls need to clear the 50-day EMA (92.05).
Yields 1-2bp lower, curve flatter.
The early June high in 10-Year yields (4.702%) remains intact.
A reminder that 50s registered a fresh cycle high on Friday, but bears failed to force a test of 5.00%.
The 5s30s curve continues to hover just below Friday’s multi-year highs (last 146.5bp), 150bp is the next upside target.
BoE-dated OIS prices 13.5bp of easing through December and 24bp of cuts through February, little changed on the day.
Wednesday’s CPI data headlines the domestic calendar this week, see our morning STIR bullet/global week ahead publication for more colour on that front and expect our usual detailed preview in due course.

BoE Meeting	SONIA BoE-Dated OIS (%)	Difference vs. Current Effective SONIA Rate (bp)
Sep-25	3.973	+0.5
Nov-25	3.891	-7.7
Dec-25	3.834	-13.3
Feb-26	3.729	-23.8
Mar-26	3.691	-27.7
Apr-26	3.617	-35.1

EQUITIES: Dominant Uptrend in E-Mini S&P Remains Intact

A bullish theme in Eurostoxx 50 futures remains intact and the contract is trading at its latest highs. The print above the May and July highs strengthens a bull theme and signals scope for a climb towards 5575.00, the Mar 3 high (cont) and key resistance. Moving average studies remain in a bull-mode position, highlighting an uptrend. Support to watch lies at 5345.89, the 50-day EMA. The dominant uptrend in S&P E-Minis remains intact and the contract is trading at its recent highs. Moving average studies are in a bull-mode position, highlighting a clear uptrend. A resumption of gains would pave the way for a climb towards 6523.63, a Fibonacci projection. On the downside, supports to watch are; 6392.29, the 20-day EMA, and 6267.88, the 50-day EMA.

Japan's NIKKEI closed higher by 336 pts or +0.77% at 43714.31 and the TOPIX ended 13.28 pts higher or +0.43% at 3120.96.
Elsewhere, in China the SHANGHAI closed higher by 31.256 pts or +0.85% at 3728.027 and the HANG SENG ended 93.22 pts lower or -0.37% at 25176.85.
Across Europe, Germany's DAX trades lower by 61.13 pts or -0.25% at 24293.87, FTSE 100 higher by 2.98 pts or +0.03% at 9141.26, CAC 40 down 43.27 pts or -0.55% at 7878.33 and Euro Stoxx 50 down 22.73 pts or -0.42% at 5424.76.
Dow Jones mini down 23 pts or -0.05% at 45014, S&P 500 mini down 6 pts or -0.09% at 6465.25, NASDAQ mini down 19.75 pts or -0.08% at 23783.

Time: 10:00 BST

COMMODITIES: WTI Futures Remain in a Clear Bear Cycle

WTI futures remain in a clear bear cycle and the contract is trading closer to its recent lows. A key support at $62.84, the Jun 24 low, has been breached, strengthening a bearish theme. A continuation lower would open $58,17 the May 30 low. Key short-term resistance has been defined at $70.51, the Jul 30 high. Clearance of this level would cancel a bear theme. Initial resistance to watch is $64.94, the 50-day EMA. A bull cycle in Gold remains intact and this is highlighted by moving average studies that remain in a bull-mode position. This sideways trend that has been in place since the Apr peak appears to be a corrective phase. A resumption of gains would open $3439.0, the Aug 23 high. Key resistance and the bull trigger is at $3500.1, the Apr 22 low. On the downside, first support to watch lies at $3268.2, the Jul 30 low.

WTI Crude up $0.1 or +0.16% at $62.9
Natural Gas down $0.11 or -3.6% at $2.813
Gold spot up $12.39 or +0.37% at $3348.75
Copper down $1.3 or -0.29% at $454.25
Silver up $0.11 or +0.3% at $38.1155
Platinum down $5.25 or -0.39% at $1336.25

Time: 10:00 BST

Date	GMT/Local	Impact	Country	Event
18/08/2025	0900/1100	*	EU	Trade Balance
18/08/2025	1215/0815	**	CA	CMHC Housing Starts
18/08/2025	1230/0830	*	CA	International Canadian Transaction in Securities
18/08/2025	1400/1000	**	US	NAHB Home Builder Index
18/08/2025	1430/1530		GB	DMO likely to publish FQ3 consultation agenda
18/08/2025	1530/1130	*	US	US Treasury Auction Result for 26 Week Bill
18/08/2025	1530/1130	*	US	US Treasury Auction Result for 13 Week Bill
19/08/2025	0800/1000	**	EU	EZ Current Account
19/08/2025	0900/1000	*	GB	Index Linked Gilt Outright Auction Result
19/08/2025	1230/0830	***	CA	CPI
19/08/2025	1230/0830	***	US	Housing Starts
19/08/2025	1255/0855	**	US	Redbook Retail Sales Index
19/08/2025	1810/1410		US	Fed Vice Chair Michelle Bowman