US DATA: Mortgage Applications Mixed For Purchases vs Refis

The latest CFTC CoT report points to asset managers reducing their curve-wide net long by ~$12mln DV01, with the cohort only extending net longs in WN futures.

• Meanwhile, leveraged funds added to net shorts in TY & WN futures, while they trimmed net shorts across the rest of the curve. They still extended their curve-wide net short position by ~$1.5mln, with the size of the net short build in WN futures (~$4.7mn) dominating.
• Broader non-commercial net positioning saw a mix of net short setting and cover (detailed in the table below). The cohort remain net short across the curve.

Source: MNI - Market News/CFTC/Bloomberg

For the full publication, see here: 250526 - Weekly ECB Speak Wrap.pdf

ECB officials haven’t had enough time to react to US President Trump’s shock announcement of 50% tariffs on EU goods last Friday, let alone yesterday evening’s delay to July 9 (from June 1 originally). However, the current backdrop can still be regarded as more dovish than a week ago, particularly when taken alongside last week’s weaker-than-expected May flash PMIs and Q1 negotiated wages data.

• As such, the MNI Policy Team’s May 22 sources piece still appears to appropriately characterise the ECB’s rate outlook: “The likelihood that the European Central Bank will need to cut interest rates below 2% is increasing as the Governing Council becomes more convinced that inflationary risks are firmly to the downside amid extreme uncertainty around trade and the global economy, Eurosystem officials told MNI”
• The most notable piece of ECBspeak since our last update likely came from Stournaras, usually considered one of the most dovish Governing Council members. While he still sees a rate cut in June, he then expects a pause in July. Such a move would be broadly consistent with current market pricing, with OIS butterfly spreads assigning a higher rate cut premium to projection meetings (June, September, December) compared to non-projection counterparts.
• Elsewhere, Simkus, Rehn, Kazaks and Wunsch reiterated prior rhetoric, while Centeno provided a familiarly dovish view.

Iran would be able to survive if negotiations with the US over its nuclear programme failed to secure a deal, President Masoud Pezeshkian said May 26.

• "It's not like we will die of hunger if they refuse to negotiate with us or impose sanctions," Pezeshkian was quoted as saying by state cited by Reuters. "We will find a way to survive."
• Despite the tone from Iran’s President, Trump recently said that he was “optimistic” following the last round of talks with Iran.
• “I don’t know if I’ll be telling you anything good or bad over the next two days, but I have a feeling I might be telling you something good,” Trump told reporters.
• This echoed more upbeat tones from the Iranian lean negotiator Abbas Araghchi, who said they could lead to an agreement in the next couple of meetings.
• Iranian and US delegates concluded the fifth round of talks in Rome with some signs of limited talks emerging.
• The sticking point for the talks remain the level of Iranian uranium enrichment.
• Iranian foreign ministry spokesperson Esmail Baghaei ruled out both the possibility of an interim provisional deal with the US, and a three-year freeze on Uranium enrichment.
• The parties are waiting for further details with mediator Oman for timing of the sixth round of talks.