COMMODITIES: Recent Recovery for WTI Futures Still Considered Corrective

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 13:00T/18:00BST/19:00ET, 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.
• The sequencing that sees Zelenskyy and Trump meeting alone before the European leaders join means that the Ukrainian leader may still face public pressure from Trump to agree to a suboptimal (for Kyiv) peace agreement. 
• While Zelenskyy and the European leaders will seek to impress upon Trump the requirement for security guarantees for Ukraine, the US president has already sought to rule out the return of Crimea and the prospect of Ukrainian NATO membership.

SFRU5 5K given at 95.9025.

Goldman Sachs note that “a week of choppy price action left European yields slightly higher. The approach of September should see the bond supply picture come increasingly into focus, especially in Germany given the mid-year revision to the Finanzagentur’s issuance plan. While elevated debt issuance (combined with ECB QT) is one of the reasons we expect higher Bund yields over time, we think a broader shift in macro expectations will be a key ingredient to higher yields”.

• They go on to flag that “although term premium has sustained a meaningful portion of the post-German election reset higher, the rate expectations component of yields - even as far out as 10s - remains somewhat lower. If - as our economists expect - sustained fiscal support leads to a multi-year period of above-potential growth in Germany, we think this short-rate reassessment is likely to prove too pessimistic”.
• Ultimately, they flag that “while that may take time and evidence to fully play out, we think there is value in positioning for near-term ECB cut pricing to decay and continue to like ERZ5 shorts against longs in the U.S.”.