G20: Sherpas Reach Agreement On Leaders' Declaration Despite US Pushback
Daily Maverick reports that the 'G20 sherpas reached an agreement on a Leaders’ Declaration at 8.30am on Friday after negotiating through the night' despite repeated pushback from the Trump administration, which has insisted that the bloc should not adopt and publish top-level communique in the absence of its delegation.
- South Africa has been pushing for the adoption of a full Leaders' Declaration instead of producing a more neutral and limited Chair's Statement, which is normally released if participating countries fail to reach consensus over joint communique. Getting it over the line would be a diplomatic victory in the country's spat with the US, which decided to boycott the G20 Summit in Johannesburg and called on participating countries not to sign off on a Leaders' Declaration.
- The text of the draft statement has not been published, but South Africa may have had to offer concessions to countries governed by more conservative leaders, such as Argentina, or major fossil fuel producers, such as Saudi Arabia or Russia. Furthermore, Daily Maverick notes that one of the options under consideration was releasing a 'Johannesburg Leaders' Declaration' rather than a 'G20 Johannesburg Leaders’ Declaration' amid the absence of the US delegation.
- This comes after the US floated the idea of sending a downsized delegation of junior diplomats to the G20 Summit but South Africa refused to hand over the group's rotating presidency to a charge d'affairs. As things stand, the summit will be attended by 42 delegations, reflecting South Africa's push for a more inclusive format.
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FOREX: FX OPTION EXPIRY
Of note:
EURUSD 1.47bn at 1.1595/1.1600.
NZDUSD 1.15bn at 0.5700.
EURUSD 1.26bn at 1.1575 (thu).
AUDUSD 1.6bn at 0.6450 (fri).
AUDUSD 1.79bn at 0.6490 (mon).
- EURUSD: 1.1595 (631mln), 1.1600 (839mln), 1.1620 (354mln), 1.1625 (425mln), 1.1700 (449mln).
- EURGBP: 0.8740 (498mln).
- USDJPY: 151.00 (944mln), 152.00 (1.26bn).
- AUDUSD: 0.6535 (516mln).
- NZDUSD: 0.5700 (1.15bn).
GERMAN AUCTION PREVIEW: 2.50% Nov-32 Bund
This morning, Germany will reopen its on-the-run 7-year 2.50% Nov-32 Bund (ISIN: DE000BU27014) for the second and final time this year.
- The launch auction of the line on August 27 was very soft with only E3.170bln of bids received for the intended E4.0bln transaction. However, ahead of the first reopening came the release of the Q4 issuance plan in which it was announced today's auction would be the sole auction of the quarter for the 7-year Bund with a smaller E3bln size. That probably helped the first re-open of the line fare a little better, with a 1.48x bid-to-cover / 1.13x bid-to-offer combination and the lowest accepted price at the auction coming in above the secondary market mid-prices.
- Domestically in Germany, Finance Minister Klingbeil is scheduled to update the government's tax projections tomorrow, with current revenues likely running a little ahead of the previous plan. For detailed considerations see our post at 08:19 BST.
- The next German auction will be E4bln of the 2.20% Oct-30 Bobl (ISIN: DE000BU25059) on October 28.
- Timing: Results will be available shortly after the bidding window closes at 10:30BST / 11:30CEST.
EQUITIES: FTSE-100 Stands Out in Soft Europe Trade
The trend condition in S&P E-Minis remains bullish and the contract is trading above support at the 50-day EMA. The average, currently at 6627.92, has been pierced but remains intact - for now. Note that the Oct 10 low of 6540.25 marks the key short-term support. The trend direction in Eurostoxx 50 futures is up and This week’s gains reinforce this theme. The breach of 5689.00, the Oct 2 high and bull trigger, confirms a resumption of the uptrend.
- Japan's NIKKEI closed lower by 8.27 pts or -0.02% at 49307.79 and the TOPIX ended 16.93 pts higher or +0.52% at 3266.43.
- Elsewhere, in China the SHANGHAI closed lower by 2.574 pts or -0.07% at 3913.758 and the HANG SENG ended 245.78 pts lower or -0.94% at 25781.77.
- Across Europe, Germany's DAX trades lower by 64.63 pts or -0.27% at 24263.12, FTSE 100 higher by 60.69 pts or +0.64% at 9487.18, CAC 40 down 43.81 pts or -0.53% at 8214.14 and Euro Stoxx 50 down 22.8 pts or -0.4% at 5663.71.
- Dow Jones mini down 22 pts or -0.05% at 47120, S&P 500 mini up 0.5 pts or +0.01% at 6774.25, NASDAQ mini down 31.5 pts or -0.12% at 25265.75.
