EURGBP TECHS: Support Intact For Now

• Canada's finance minister said his budget next month needs to provide a "generational investment" to fend off damage from the U.S. trade war, while declining to comment on a newspaper report the deficit will grow to CAD100 billion from a campaign pledge of just over CAD60 billion.
• Francois Philippe Champagne told reporters Monday the government will also aim to curb spending in other areas to free up room for longer-term projects, without providing details. MNI previously reported the government set up a power to borrow an extra CAD95 billion to deal with the trade war.
• There is little reaction in GoC yields, with a ~0.5bp lift away from session lows for 2s and 10s, but USDCAD sees a clearer step lower to session lows of 1.3780.
• It clears support in doing so, seen at 1.3790 (50-day EMA), and opens 1.3727 (Aug 27 low) if the clearance is held.
• CAD is one of the top performers on the day, aided by the strong equity backdrop with fresh all-time highs seen in US indices.  

A new Fox News survey has found that, “Congressional Republicans’ approval rating outperformed their Democratic counterparts for the second time this year.”

• Fox notes, “Thirty-three percent of registered voters approve of the job Democrats in Congress are doing (66% disapprove), up 3 points from a near record-low 30% in March. While their Republican colleagues garner a higher 38% approval rating (61% disapproval), that’s down 5 points from a record-high 43% six months ago.”
• According to Fox, “The decline in congressional Republican approval comes from within: 76% of self-identified GOPers approve, but that’s down from 88% in March. And while congressional Democrats earn the approval from just 58% of self-identified Democrats, that’s up from 49% six months ago.”
• The survey notes that President Donald Trump’s highest approval ratings are on his handling of border security (57% approve), followed by crime and public safety (50%) and immigration (47%). Fewer approve on Ukraine (40%), the economy (39%), Russia (36%), tariffs (36%) and cost of living (32%).

Figure 1: Congressional Job Approval by Party

Source: Fox News

• Fed Funds implied rates see the Dec’25 lead today’s increase, currently 2bp higher from Friday’s close to have almost fully reversed Thursday’s drop seen on a surprise uptick in initial jobless claims along with the broader US CPI report.
• It’s likely a positioning play, with the sole data being a surprisingly weak Empire manufacturing report.
• Cumulative cuts from 4.33% effective: 26bp for Wed, 46bp Oct, 68bp Dec, 81.5bp Jan and 95.5bp Mar.
• SOFR futures hold the session’s twist flattening, with U5 and Z5 1 tick lower vs gains of up to 2.5 ticks in U6 and Z6.
• The SOFR implied terminal yield of 2.915% (SFRH7, -1.5bp) meanwhile is unchanged from when US desks filtered in. It remains off last Monday's close of 2.84% (lowest since Sep 2024 and one of the lowest for the cycle) but still points to more than 140bp of cuts ahead.
• Still to come today, Miran’s Senate confirmation vote (expected to pass having already passed the Banking Committee 13-11). The cloture vote is at ~1730ET before the full confirmation voter at ~2000ET.
• We also expect at some point to hear a ruling in the ongoing Trump-Cook case on whether the court will grant a stay on the decision that allowed Cook to remain in her job for now (and thus attend this week’s FOMC meeting starting tomorrow before the decision on Wed).