BRAZIL: President Lula Expected to Stand Ground in Face of Trump Tariffs
Aug-06 10:39
- CNN Brasil reported earlier in the week that a pre-recorded message from President Lula is expected to be aired later today, with the president likely to focus his speech on measures to mitigate the effects of US tariffs. No specific timing has yet been provided.
- Reuters note that the soon-to-be imposed 50% tariffs will not likely derail the economy due to ample exemptions and stronger trade ties with China, and that the lower stakes for the Brazilian economy therefore give President Lula “more room to stand his ground against Trump than most Western leaders.”
- Meanwhile, Valor report that allies of former president Jair Bolsonaro disrupted the proceedings of both the Lower House and the Senate on Tuesday in protest against his house arrest. The demonstration stalled legislative activity, delayed committee meetings, and drew criticism from the Senate President Davi Alcolumbre and Lower House Speaker Hugo Motta.
- According to senator Flávio Bolsonaro, the former president’s eldest son, the aim is to pressure the congressional leadership to bring to a vote far-right proposals, including amnesty for participants in the January 8 riots, the end of privileged legal status for high-ranking officials, and the impeachment of Supreme Court Justice Alexandre de Moraes.
- Data-wise, Brazil is expected to report a $5.8bln trade surplus in July following a surplus of $5.89bln the month prior. The trade figures will be released at 19:00BST/15:00 local time.
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EURIBOR OPTIONS: Ratio Put Spread
Jul-07 10:38
2RH6 97.75/97.25ps 1x4, bought the 4 for 4.5 in 2.25k (sold the 1).
US 10YR FUTURE TECHS: (U5) Monitoring Support At The 50-Day EMA
Jul-07 10:23
- RES 4: 113-07 76.4% retracement of the Apr 7 - 11 bear leg
- RES 3: 112-23 High May 1 and key resistance
- RES 2: 112-12+/15 High Jul 1 / 61.8% of the Apr 7 - 11 sell-off
- RES 1: 111-28 High Jul 3
- PRICE: 111-06+ @ 11:12 BST Jul 07
- SUP 1: 110-31 50-day EMA
- SUP 2: 110-16 Low Jun 20
- SUP 3: 110-10+ Low Jun 16
- SUP 4: 110-03 76.4% of the May 22 - Jul 1 bull leg
A bull cycle in Treasury futures is intact and - for now - the latest pullback appears corrective. The contract remains above a key support at 110-31, the 50-day EMA, and the Jul 3 low. A clear break of this average would signal scope for a deeper correction and highlight a possible reversal. For bulls, a resumption of gains would open 112-15, the 61.8% retracement of the Apr 7 - 11 steep sell-off. Initial resistance is at 111-28, the Jul 3 high.
EGB OPTIONS: Bund Put Spread seller
Jul-07 10:19
RXU5 127.5/125.5ps, sold at 15 in 1.5k.
