LNG: SEFE Agreement for LNG Supply from Energy Transfer’s Lake Charles

• TYM5 briefly hits a low of 111-15+ on the unsubstantiated headlines before lifting to 112-01 and now up to 112-11 in fluid trading.
• It’s through support at 112-01 (Mar 4 high and breakout level).
• If sustained, next support at 111-08 (20-day EMA).

Speaking at a press conference following the conclusion of a meeting of EU trade ministers, Trade Commissioner Maros Sefcovic says that "We are not [supporting] tit-for-tat or dollar-for-dollar retaliation [to US tariffs] but considering all instruments on the table." Official statement from Sefcovic can be found here. Confirms dates for tariffs: "The vote is set for April 9, with the final list adopted on April 15. Duties on products will kick in on that day for the first set of measures, and on May 15 for the remaining ones."

• Sefcovic: "At this stage, we are not willing to discuss what instruments we would use or the reasons why our response is gradual."
• Sefcovic says, "Despite EU efforts, we have not seen engagement [with the US] which would lead to a mutually acceptable solution." Says that "We are ready to talk with the US but solutions need to be mutually advantageous."
• Sefcovic: "VAT is an important source of income for EU member states and we will not change our VAT system."
• Earlier, Commission President Ursula von der Leyen stated that "Europe is ready to negotiate with the US. We have offered zero-for-zero tariffs for industrial goods."

Gilt futures have closed the opening gap higher, with the pullback from early session highs extending further.

• Futures just off fresh session lows, last ~92.60, yields little changed to 15bp higher, curve meaningfully steeper on the day.
• Initial support at the March 20 high (93.01) is breached. Further extension lower would target the 20-day EMA (92.13)
• As noted previously, the APF offering from the BoE wasn’t well-received, but gilts were already moving lower before that.
• A move off lows in equity indices has factored into the pullback from highs, but there hasn’t been much in the way of a clear explainer offered for the weakness in global long ends.
• Comments from UK PM Starmer & Chancellor Reeves to automakers add further weight to the idea of at least some fiscal support being offered to counter the impact of U.S. tariffs, however, the UK’s fiscal position remains delicate.
• GBP STIRs off dovish session extremes, in line with the move in the long end.
• SONIA futures now +4.5 to -12.0 after most contracts touched the highest levels seen since April. Strip twist steepens.
• BoE-dated OIS back to pricing 79bp of cuts through year-end vs. ~93bp at one stage this morning. A cut is still fully discounted come the end of the May MPC.
• Comments from BoE’s Lombardelli and 30-Year gilt supply are due tomorrow.