EGBS: Only Modestly Off Highs On Potential April Start For Reciprocal Tariffs
Feb-13 15:32
- Risk-on flows following CNBC’s Javers saying there won’t be an announcement on the immediate installation of reciprocal tariffs has helped EGBs more meaningfully move off highs but moves are very much contained.
- If accurate, and it could well be rebuffed by Trump in due course ahead of an expected announcement at 1pm ET, it would mark a further delay in tariffs. As noted earlier, the proposed tariffs on steel & aluminium for Mar 12 have limited macro impact compared to other industries as such chemical products, vehicles and broader manufacturing (where reciprocal tariffs could impact).
- See https://marketnews.com/eu-response-to-steel-and-aluminium-tariffs-alone-likely-small-12-1739444031579 and https://marketnews.com/but-eu-still-exposed-to-reciprocal-tariffs-due-today-22-1739444107470.
- Dovish spillover from US PPI details and Russia-Ukraine peace prospects still ensure large gains on the day though.
- RXH5 for instance is only 10 ticks off session highs of 132.93, having come close to resistance at 133.00 (50-day EMA) after which lies 133.71 (Feb 5 high).
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SONIA: Latest Large SONIA Options
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- SFIM5 95.75/96.00cs, bought for 6.75 in 24k.
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US: Speaker Johnson Looks To Extend Debt Limit For Entirety Of Trump's Term
Jan-14 15:28
Jake Sherman at Punchbowl News reports on X that House Speaker Mike Johnson (R-LA) is looking to extend the federal debt limit for the entirety of President-elect Donald Trump's term and will discuss options at a Republican conference meeting today.
- Sherman adds Johnson said the move would be “costly” - meaning democrats would exact a price for their votes, should the extension be moved outside of reconciliation - the mechanism by which the government can pass budget-related legislation along party lines.
- Johnson said he’s “agnostic” whether the debt limit rides on reconciliation or via regular appropriations where it will need Democrat support. While Republicans are in a strong position to legislate a debt ceiling hike via reconciliation, including it in a major border security/energy/tax package could leave the GOP agenda vulnerable to a rebellion from conservative deficit hawks.
- Johnson's comments come amid a spat with Democrats after the Speaker yesterday floated tying the debt limit to California wildfire aid. As a lengthy debt limit extension outside of reconciliation will require Democrat support. Johnson's move to attach the debt limit to a supplemental disaster aid could hasten passage of the bill but will certainly draw Democrat criticism.
- Senator Chris Murphy (D-CT) said, in response to reports of the debt limit-aid tie-up: "They need to raise the debt ceiling to pass their massive tax cut for the super wealthy. So the message is: we will only rebuild California if our billionaire and corporate friends get their money. Unreal."
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SFIZ5 96.35/97.00cs x3 vs 95.60p x1, bought the cs for -2 in 10k total.
