EU-RUSSIA: Slovakia Maintains Veto On Latest Sanctions Package
Slovakia continues to act as a brake on EU efforts to impose an 18th round of sanctions on Russia, with diplomatic sources telling Euronews that at the 9 July Coreper II meeting of EU permanent representatives, the Slovakian ambassador once again vetoed the package. Euronews reports the latest sanctions "target Russia's financial and energy sectors, including the Nord Stream pipelines. A move to lower the price cap on Russian crude oil is uncertain to succeed due to the White House's reluctance."
- The article notes that "Slovakia has no objection to the economic restrictions per se; its opposition relates to an entirely different matter: the proposed phase-out of all Russian fossil fuels by the end of 2027". As the phase out is subject to a qualified majority vote, Slovakia can not stop it alone. Instead, it is holding the next round of sanctions - requiring unanimity - hostage until the EU relents on the phase out.
- During the June EUCO summit, Slovakian PM Robert Fico said that "This will harm us, unless an agreement is reached with the European Commission that would compensate us for all the damage this proposal might cause," and highlighted the risk of a lawsuit from Russia's Gazprom for EUR16-20bln for breach of its gas supply contract that runs to 2034.
- There will be significant pressure on Slovakia and the EU to come to an agreement that would allow ambassadors to vote through the package at the next Coreper II meeting on 11 July, which would allow the final sign off at next Tuesday's foreign ministers' meeting.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
SOFR OPTIONS: Morning Update
Morning update, leaning towards upside call buying after earlier selling/mixed flow. Projected rate cut pricing gains slightly vs. morning levels (*) as follows: Jun'25 steady at -0.8bp (0.0bp), Jul'25 at -4.5bp (-4.1bp), Sep'25 at -18.2bp (-17.9bp), Oct'25 at -30.5bp (-30.6bp), Dec'25 at -45.8bp (-45.9bp).
- +4,000 SFRZ5 95.56/95.68/95.81 put flys, 2.5 ref 96.105
- +10,000 0QU5 95.62/95.87 put spds 1.5 ref 96.555
- +8,000 SFRN5 95.87/96.00/96.12 call flys, 1.25-1.5
- +2,500 SFRZ5 96.18/96.50/96.81 call flys, 3.5 vs. 96.12/0.20%
- -4,000 SFRH6 95.62 put 0.5 over 96.25/96.62/97.00 call fly
- +2,500 0QN5 97.62/98.25 call strip, .75
- -7,500 0QZ5 97.25/97.50 call spds 0.5 over 96.37/96.62/96.87 call flys
- -10,000 SFRH6 95.68 puts, 6.5 ref 96.29
- -10,000 0QQ5 96.87 calls, 4.0 vs. 96.565/0.26%
CANADA BOOSTING MILITARY SPENDING TO 2% OF GDP THIS FISCAL YEAR
- CANADA BOOSTING MILITARY SPENDING TO 2% OF GDP THIS FISCAL YEAR
US-CHINA: Hassett-Chip Controls Could Be Relaxed If Rare Earth Deal Reached
Talks between US and Chinese delegations have been underway in London for around two hours, with expectations that the discussions could run well into the evening and even into 10 June. Possibly countering headlines about talks running into tomorrow, Kevin Hassett, director of the National Economic Council, told CNBC that "I expect this to be a short meeting with a big strong handshake," indicating his anticipation of a deal on rare earth exports from China, recently restricted but crucial for US high-tech manufacturing.
- Hassett added that in the event of a deal, "any export controls from the US will be eased, and the rare earths will be released in volume. And then we can go back to negotiating smaller matters," clarifying that he was not referring to "very very high-end Nvidia chips", but "possible export controls on other semiconductors which are also very important" to China.
- As noted in MNI's US Daily Brief earlier, "The US team includes the two principals in Geneva, Treasury Secretary Scott Bessent and USTR Jamieson Greer, but has been expanded to include Commerce Secretary Howard Lutnick, whose Commerce Department has purview over export controls. MNI’s Political Risk Team noted on June 5, shortly after Trump announced his delegation for the talks, that Lutnick's inclusion hinted “that a deal could be made to dial down export controls”.
