US: Summary Of Trump's Comments In UAE 1/2
May-16 08:28
US President Donald Trump has delivered remarks to the press in Abu Dhabi, on a range of issues, to conclude his “incredible” four-day trip to the Middle East.
- Trump says he will go straight home after his stop in the UAE, nixing the possibility of an additional stop in Turkey to help facilitate peace talks between Ukraine and Russia. He says, “we’ll see what happens with Russia and Ukraine…”
- Trump later adds on a ceasefire, “we’re going to get it done” and says he will meet with Russian President Vladimir Putin "as soon as we can set it up".
- Trump hints at some foreign policy announcements in the coming 2 or 3 weeks, noting: “We’re looking at Gaza and we’re going to get that taken care of”. While discussion of Israel has been conspicuously absent from Trump's trip, Secretary of State Marco Rubio held a call with Prime Minister Netanyahu yesterday, affirming the US' 'ironclad' support for Israel's security.
- Trump says, “we have an Iran situation” adding that “one way or another we’ll take care of it”. He repeats an ultimatum to Tehran he delivered in Riyadh on Tuesday: “Either it’ll be done nicely or not nicely”.
- He adds that “we’re talking to [Iran] and I think they’ve come a long way” but declines to provide any new details on the status of talks following reports yesterday that the US had submitted a formal nuclear proposal for the first time since talks resumed in April.
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CROSS ASSET: More upside momentum in Gold
Apr-16 08:13
- Some upside momentum in Gold, more likely short cover, than margin related move, spiked to $3307.47, and next Gold MNI Tech resistance is still at $3347.7 - 1.382 proj of the Dec 19 - Feb 24 - Feb 28 swing.
- US Tnotes at session high is helping the Yen, although USDJPY is finding some demand just ahead of the 142.00 level for now.
MNI: ITALY MAR FINAL HICP +2.1% Y/Y (FLASH 2.1%)
Apr-16 08:05
- MNI: ITALY MAR FINAL HICP +2.1% Y/Y (FLASH 2.1%)
- MNI: ITALY MAR FINAL HICP +1.6% M/M (FLASH 1.6%)
SWAPS: Front End Of ASW Curve Outperforms Again During Risk-Off Trade
Apr-16 07:57
German ASWs vs. 3-month Euribor trade 0.9-2.0bp wider, with the front end of the spread curve outperforming and the long end lagging.
- The broader risk-off move helps explain the direction of travel for spreads, while the presence of this morning’s 30-Year supply explains some of the underperformance further out the curve (at least intraday).
- Schatz & Bobl spreads vs. 3-month Euribor are 3-4bp off last week’s year-to-date closing highs, while the Bund ASW is essentially equal with last week’ closing high and the Buxl spread is through last week’s closing high, set for the highest close since mid-February.
- Looking at the recent moves, Commerzbank note that “our key specialness metric cheapened below zero for the first time since 2015 and CTDs as well as on-the-runs also trade calm. Thus, the return of the collateral risk premium explains the entire richening of swap spreads, which is also visible in the aggressive steepening of the Bund ASW-structure”.
- They go onto highlight that “Bunds are emerging as the main beneficiary, while UST vs. swap underperformance puts question marks behind their status as safe haven assets. This dynamic is also giving Buxl spreads a lift close to pre-election levels”.
- Looking forwards, they suggest that “for long-dated Bund spreads to decouple from USTs and Gilts on a sustained basis we need to see evidence that the euro could rival the dollar as the world's reserve currency. However, we stick with our base case, where major swap curves look set to converge as risk sentiment stabilises and German fiscal risks take centre stage again by next year”.
