EM CEEMEA CREDIT: PEOPW: EUR500m 6NC5 SNP - Final

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• Congress returns today ahead of a hectic month during which Republican committees must write up the text of the ‘big beautiful’ reconciliation bill that will cover the bulk of President Donald Trump’s agenda.
• The Treasury Department is expected to send Congress its X-date projection this week.
• Trump’s approval rating continues to fall at a rate that will flash warning signs for Republican lawmakers facing tight re-election races in 2026.
• US consumers and businesses are bracing for Trump’s trade war to bite as US ports prepare to receive the first container ships from China to face steep tariffs.
• US exports of soybeans and pork to China have plunged. Markets will be watching for Trump’s response to any downturn in the agricultural sector in light of a first-term bailout package that nearly matched revenue generated by tariffs.
• The US is unlikely to reach a comprehensive trade deal with South Korea before the country’s presidential election on June 3.
• The Chinese government continues to deny the existence of trade talks with the US.
• Canadians head to the polls today to vote in a snap general election that has been upended by Trump's trade war and rhetoric towards Canada’s sovereignty.
• Ukraine’s backers are hoping a tone shift from the Trump administration could open the door for more favourable negotiations with Russia.
• Poll of the Day: A majority of US voters think Trump has exceeded his authority.

Full Article: US DAILY BRIEF

Late on Friday J.P.Morgan recommended “initiating 30-Year swap spread wideners, paired with a risk weighted short in S&P 500 futures.”

• This comes after they turned “bullish on swap spreads given fair value considerations and tariff progress but recommend hedging with S&P 500 futures given the recent correlation of spreads to equities since early April”.

• The relatively stable and more constructive tone for risk sentiment last week weighed on the low yielding currencies, helping the likes of USDJPY to extend its corrective cycle. The pair rallied near to 3% from the lows as we approached the Friday close, with a brief test of 144 capping the topside for now.
• While a notable recovery, spot remained shy of initial resistance, which now comes in at 144.47, the 20-day EMA. Overall, moving average studies are in a bear-mode position highlighting a dominant downtrend. As such, USDJPY has been edging lower across the European morning on Monday, printing fresh session lows below 143.30 at typing.
• Goldman Sachs see USDJPY falling to 135 over the next 12 months, with risks skewed towards getting to (and below) that level much earlier. But given that equities still look vulnerable to nearer-term downside and the speed of the Dollar sell-off leaves it susceptible to shorter-term swings, GS prefer to be short AUDJPY tactically.
• As a reminder, the BOJ is expected to keep its 0.5% policy interest rate unchanged this week, as policymakers monitor the economic and inflationary impact of recent U.S. trade policies and market volatility. Overnight, Japan’s top currency diplomat Mimura confirmed there were no talks about FX target held during US-Japan discussions.