US: Speaker Johnson-House To Return Next Week, But Nothing To Negotiate w/Dems
Speaker of the House of Representatives Mike Johnson (R-LA) confirms that the House will "definitely" return next week, but until that point, “there is nothing truly that we can do much on the floor while the lights are almost literally out here.” Claims House Republicans “would have been here [in Washington, D.C.,] this week, except that we did our work.” Johnson looks to shut down Democrat attempts to force concessions or negotiations from the GOP, saying, “There isn't anything we can do to make this bill any better for them… So there's nothing to negotiate". Johnson: "The sad thing about it is that every single bit of this was entirely avoidable."
- House minority leader Hakeem Jeffries (D-NY) claims, "We also need a credible negotiating partner. Donald Trump is behaving in the most erratic and unserious fashion. It's time for him to behave like a leader so we can bring the country together, bring Democrats and Republicans together to find a way out of this shutdown situation that Republicans have created."
- Speaking on the Senate floor, minority leader Chuck Schumer (D-NY) claims, "Donald Trump and Republicans have barreled us into a shutdown because they refuse to protect Americans' health care. Republicans tried to bully us, but they can't. They don't have the votes." The next vote, due to take place ~11:00ET, will show how strong Schumer's claim on Democrat votes is.
- Our US Daily Brief covers the most likely routes out of the gov't shutdown.
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SEK: Most notable move in EURSEK
- Today is the most notable single move in the EURSEK in a Month, since 1st August ~9 big figures range.
- For now the cross seems to be finding some support at the Psychological 11.0000 level.
- The early chart to watch was the USDSEK, now close to testing the 2025 low.
EGBS: Limited Benefit To Bunds From OAT Weakness
Goldman Sachs note that “although French assets have been under pressure, spillovers to the rest of Europe - and to EGBs in particular – have been contained. Ongoing declines in rates volatility help to contain risks to other sovereign spread markets. And there has been limited richening in Bunds vs. swaps compared to last year’s snap elections”.
- They provide two possible explanations:
- “Uncertainty in France has not reached the same level as last year, with parliamentary elections likely not yet widely expected and less speculation about President Macron resigning. In the same vein, markets may be drawing some comfort from having witnessed the relatively smooth transition from the Barnier to the Bayrou government last November”.
- “With the ECB cutting cycle now over, German fiscal easing underway, and a more challenging duration backdrop globally, the prospect of substantial Bund outperformance is dimmer”.
- Ultimately, Goldman continue to “expect Bunds to cheapen, both in outright terms and against swaps. That said, to the extent that we expect the cheapening in Bunds vs. swaps to be gradual, the increased tail risk in France and lack of reaction in swap spreads so far diminish the risk reward for tighteners, in our view”.
US: Trump Says India Offers 0% Tariffs, But Getting Late
U.S. President Trump posts the following to Truth Social "What few people understand is that we do very little business with India, but they do a tremendous amount of business with us. In other words, they sell us massive amounts of goods, their biggest “client,” but we sell them very little - Until now a totally one sided relationship, and it has been for many decades. The reason is that India has charged us, until now, such high Tariffs, the most of any country, that our businesses are unable to sell into India. It has been a totally one sided disaster! Also, India buys most of its oil and military products from Russia, very little from the U.S. They have now offered to cut their Tariffs to nothing, but it’s getting late. They should have done so years ago. Just some simple facts for people to ponder!!!"
