INDIA: RUSSIA-NSA Doval Holds Talks w/Counterpart Shoigu As Tariffs Bite
Aug-07 09:27
Secretary of the Russian Security Council Sergei Shoigu says in a meeting with India's National Security Adviser Ajit Doval that, "[Russia] are committed to further active cooperation in order to form a new, more just and sustainable world order, ensure the supremacy of international law and jointly combat modern challenges and threats...Regular consultations help deepen Russian-Indian relations and take them to a new, higher level in the current difficult international situation,"
- The meeting will invariably be viewed in the context of the additional 25% tariffs set to be imposed on India from 27 August by the US as part of its first package of 'secondary' sanctions to punish India for its purchase of Russian oil. These come in addition to the 25% 'reciprocal' tariffs that took effect today (7 Aug).
- India's Tribune reports that "Doval is expected to bring clarity on how New Delhi plans to navigate its crude oil supplies from Russia amid indications that Moscow may further lower prices for India." Doval's visit comes ahead of a trip to Moscow for Minister of External Affairs S. Jaishankar, expected later in August.
- Foreign Policy outlines some of the potential options for India: "It can expand ongoing efforts to ink new trade deals with other countries to secure greater market access and reduce U.S. tariff damage.[...] New Delhi can renew earlier efforts to prod Russia to stop fighting in Ukraine. [...] India can also continue to pursue a deal with Washington. But this could be risky politically for New Delhi, given broader tensions in U.S.-India relations..."
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US TSY OPTIONS: FVQ5 108.00 Puts Sold
Jul-08 09:25
FVQ5 108.00 puts 20K given at 0-15.
FOREX: Tariff Letter Frenzy Caps USD/JPY Rally
Jul-08 09:23
- Trump's tariff letter-writing caught markets yesterday, prompting losses for equities and a negative close on Wall Street. Equity futures are yet to reverse, but are off the worst levels of the week headed into the crossover. The tariff headlines yesterday put paid to the USD/JPY rally that seems to have run out of steam into NY hours. That said, price remains in close proximity to 146.45, the weekly high and level above which the corrective move higher could resume. Through here, markets eye 148.03 for direction ahead of the Y149.73 200-dma.
- Triggers for a return higher in USD/JPY would be a re-widening of front-end US-Japan yield spreads or a corrective rally for the USD Index - which appears to be building a base at the recent pullback low of 96.377. While tariff uncertainties remain present, another likely delay to the installation of reciprocal tariffs to early August is keeping the USD downside argument intact, despite further warning signs over the pace of USD weakness this year - most recently via a PBOC survey issued to domestic banks earlier in the week.
- JPY is the poorest performer on the day, while AUD is the strongest. The RBA rate decision pushed back against building consensus for another rate cut by holding policy. AUD/USD trades back above 0.6500 as a result, and keeps the 50-dma support intact on any further downside.
- Following the data rush last week, there are no tier 1 releases due from the US Tuesday, although the NY Fed's latest survey on one-year inflation expectations could see some attention, expected to slow to 3.13% from 3.20%. The speaker schedule is similarly light, with just ECB's Nagel at 1500BST/1000ET.
JPY: The Exchange traded put Option is still trading
Jul-08 09:20
Early FX Exchange traded Option, New Position, looking for Yen strength, still trading in a few clips.
While there's more of a two way flow, the aggressor has been the seller all Morning.
- JPYUSD (8th Aug) 63.00p, sold at 0.25 in ~3.9k total now.
