EU FINANCIALS: Sumitomo: Q2 26       

US Treasury Secretary Scott Bessent told reporters, “anyone purchasing Russian energy is subsidizing attacks on the Ukrainian people,” per Reuters. Bessent’s comment comes as the US appears to be edging towards imposing new penalties on Russia, and the Trump administration weighs up selling Ukraine long-range Tomahawk missiles. 

• Earlier today, US Defense Secretary Pete Hegseth said at the NATO defence ministerial meeting in Brussels, “If this war does not end, if there is no path to peace in the short term, then the United States, along with our allies, will take the steps necessary to impose costs on Russia for its continued aggression.”
• US Ambassador to NATO Matthew Whitaker told La Repubblica yesterday, “Tomorrow, the US will make an important announcement regarding arms supplies to Ukraine… There are almost—I don’t want to say unlimited possibilities—but certainly there are many consequences for not reaching a peace agreement that could be used against the Russians.”
• Politico reports that Senate Majority Leader John Thune (R-SD) “left the door open Tuesday to voting on a long-stalled Russia sanctions bill as soon as this month. He didn’t commit to putting it on the floor — noting he still has to coordinate strategy with the White House — but said he believes the issue is ‘pretty ripe.’”
• US Senators are also working to set up a bipartisan meeting with Ukrainian President Volodymyr Zelenskyy alongside his White House meeting with Trump on Friday.                         

• Treasuries extending lows - through early overnight levels, coinciding with EU headlines that the EU is discussing "preferential treatment to give domestic firms bidding for public contracts worth about €2.5 trillion ($2.9 trillion) a year," Bbg.
• Note, however, 10Y Bund also declined and is rebounding. Currently, Tsy Dec'25 10Y contract trades 113-09.5 (-3.5), yld tapped 4.0359% high; curves flatter: 2s10s -2.675 at 52.260, 5s30s -2.631 at 99.664.
• Initial technical support at 112-26 (20-day EMA) followed by the 50-day EMA at 112-16. A clear break of the average would expose 111-13+, the Aug 18 low and a key support.
• Cross asset: Bbg US$ index -3.09 at 1211.35, stocks claw off lows: DJIA up 106.35 points (0.23%) at 46,375.71, S&P E-Minis up 31 points (0.46%) at 6,716.5, Nasdaq up 165.2 points (0.7%) at 22,684.25.

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