US-RUSSIA: Senator Graham Says Congress "Stands Ready" To Pass Sanctions Package
Senator Lindsay Graham (R-SC) has stated on X, that Congress 'stands ready' to pass his Russia sanctions package and impose secondary tariffs on buyers of Russian oil, gas, uranium, and other goods. With the House on recess until September 2, any new sanctions are likely to come via a Trump executive order, suggesting that the measures will be more conservative than the punitive package introduced by Graham, which calls for a 500% secondary tariff on buyers of Russian O&G.
- Graham: "I completely understand President [Donald Trump]'s frustration with Russia’s continued attacks on Ukraine, which indicates no real desire to come to the peace table. Putin has seriously miscalculated President Trump. I hope countries like China, India and Brazil — who prop up Putin’s war machine —are about to pay a long overdue price. Congress stands ready, in an overwhelmingly bipartisan fashion, to help President Trump in his efforts to get the parties to the peace table."
- In the last few minutes, the implied probability of Trump imposing new sanctions on Russia before September 15, his original deadline for Russia to reach a ceasefire with Ukraine, has risen to 66%, per Polymarket.
- Ukrainian President Volodymyr Zelenskyy's Chief of Staff, Andriy Yermak, said on X: "Thanks to [Trump] for standing firm and delivering a clear message of peace through strength..."
- NYT reports Russia "largely shrugged off Trump’s previous 50-day deadline, noting that past deadlines set by [Trump] had come and gone with little consequence."
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US FISCAL: Available "Extraordinary" Measures To Ward Off X-Date Pick Up
Treasury reported Friday that as of Jun 25 it had $130B in remaining "extraordinary" measures (of a total $378B available) to ward off an "x-date" of running out of resources before defaulting. That's the highest in 2 weeks.
- Combined with $334B cash as of Jun 25 (after a bit of a buildup after the mid-June tax deadline), that's a total of roughly $465B in total resources available.
- We noted earlier this week that Treasury told Congress that it was required to extend its debt issuance suspension period from Jun 27 to Jul 24, in effect prolonging the use of extraordinary measures while we await a resolution to the debt limit impasse, probably through the fiscal legislation currently going through Congress.
- Realistically, fiscal dynamics so far this year point to potential for Treasury to get into September without running out of cash + extraordinary measures. That seems to be the broad market expectation.
US DATA: Cleveland, Dallas Fed PCE Medians Show Progress But Still Above-Target
The Cleveland and Dallas Fed's median PCE metrics showed a notable drop in May. All indices suggest PCE inflation running above 2%, and higher than the actual core and headline PCE measures, but pressures appear to have cooled from a pickup in the early months of the year.
- The Cleveland Fed's median PCE measure came in at 0.22% M/M, a 10-month low after April's 15-month high 0.31%. This left median PCE at 3.01% on a Y/Y basis, down from 3.06% prior for a the joint-lowest (with Feb) since September 2021.
- The Dallas Fed's annualized median rate fell to 2.01%, from 2.65% prior for a 10-month low. The 6-month annualized rate edged lower to 2.74% (2.76% prior), a 4-month low, with the Y/Y rate ticking down to 2.55% from 2.56%, echoing the Cleveland Fed for the lowest reading since September 2021.
USDCAD TECHS: Pivot Resistance Remains Intact
- RES 4: 1.4111 High Apr 4
- RES 3: 1.4016 High May 12 and 13 and a key resistance
- RES 2: 1.3920 High May 21
- RES 1: 1.2710/3803 20- and 50-day EMA values
- PRICE: 1.3658 @ 16:23 BST Jun 27
- SUP 1: 1.3618 Low Jun 26
- SUP 2: 1.3540 Low Jun 16 and the bear trigger
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
USDCAD has pulled back from its recent highs. The primary downtrend remains intact and short-term gains appear to have been corrective. Key support and the bear trigger has been defined at 1.3540, the Jun 16 low. Clearance of this price point would resume the downtrend. Any reversal higher would instead signal scope for a stronger retracement. Pivot resistance to monitor is at the 50-day EMA, at 1.3803.
