US-RUSSIA: There Will Be 'Consequences' If Putin Doesn't Agree Ceasefire - Trump
US President Donald Trump has characterised his call with Ukrainian President Volodymyr Zelenskyy and European leaders this morning as "very good," adding that he would "rate it a ten, very friendly."
- Speaking at the Kennedy Center, Trump claimed that it wasn't his decision to exclude Zelenskyy from Friday's summit with Russian President Vladimir Putin. Trump's wideranging remarks can be reviewed here: LIVESTREAM
- Trump said there is a "very good chance" of a second meeting with Zelenskyy, if the Alaska summit goes well. He notes that a potential second meeting will be "much more productive than the first because the first is to find out where we are and what we're doing."
- Trump adds: "If the first one goes OK, we'll have a quick second one. I would like to do it almost immediately." He notes the second meeting would be between Zelenskyy and Putin (and Trump if "they're like to have me there").
- Trump reiterates the Alaska meeting is "setting the table for the second meeting," but warns "there may be no second meeting," if he feels it's "not appropriate to have it because I didn't get the appropriate answers".
- Asked if there will be consequences if Putin does not agree to stop the war after the Alaska meeting," Trump says "yes there will". Adds that he "doesn't have to say what the consequences will be" but "there will be consequences."
- Treasury Secretary Scott Bessent indicated to Bloomberg TV this morning that European allies need to be prepared to back sanctions and harsh secondary tariffs on Russia.
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ECB: Reuters Sources See ECB Discussing More Negative Tariff Scenario
The below headlines from Reuters referring to five ECB policymakers, although the bottom line is in keeping with market pricing: ESTR ECB-dated OIS currently shows 0.5bp of cuts for July before a cumulative 11bp for Sept and 22.5bp for Dec.
- “ECB TO DISCUSS MORE NEGATIVE SCENARIO NEXT WEEK THAN ENVISAGED IN JUNE AFTER TRUMP'S LATEST TARIFF THREAT, SOURCES SAY
- ECB STILL SEEN HOLDING RATES AT JULY 24 MEETING AS POLICYMAKERS RELUCTANT TO ACT ON A THREAT ALONE, SOURCES SAY
- ANY ECB RATE CUT DISCUSSION REMAINS PUSHED BACK TO SEPTEMBER, SOURCES SAY” - Reuters
- A reminder from the piece: "the 30% duty floated by Trump is steeper than the ECB had anticipated even under the most negative of three scenarios for the euro zone economy it released last month."
US 10YR FUTURE TECHS: (U5) Support Holds For Now
- RES 4: 112-23 High May 1 and key resistance
- RES 3: 112-15 61.8% retracement of the Apr 7 - 11 sell-off
- RES 2: 112-12+ High Jul 1 and a bull trigger
- RES 1: 111-13+/111-28 High Jul 10 / High Jul 3
- PRICE: 110-21+ @ 16:56 BST Jul 14
- SUP 1: 110-20+/17 Low Jul 14 / 61.8% of the May 22 - Jul 1 bull leg
- SUP 2: 110-10+ Low Jun 16
- SUP 3: 110-03 76.4% of the May 22 - Jul 1 bull leg
- SUP 4: 109-28 Low Jun 6 and 11
Treasury futures maintain a softer short-term tone and the contract is trading closer to its recent lows. Price has breached the 50-day EMA, at 110-31. This undermines a recent bull theme and exposes 110-17 next, a Fibonacci retracement point and a key support. Clearance of this price point would strengthen a bearish threat. Note that it also remains possible that the recent move down is a correction. Resistance to watch is at 111-13+, Jul 10 high.
US OUTLOOK/OPINION: Analysts See Core CPI On Cusp Of 0.2% or 0.3% M/M In June
- Ahead of tomorrow’s US CPI release, we note that the broad Bloomberg consensus looks for both core and headline CPI inflation at 0.3% M/M in June although unrounded estimates suggest a risk of rounding lower.
- The below estimates have a median of 0.24% M/M for core CPI (average 0.25) after 0.13% M/M, whilst headline is seen at 0.25% M/M (average 0.26%) after 0.08% M/M.
- Early tracking for core PCE currently points to a very similar June reading, with a median across seven estimates of 0.25% M/M after 0.18% in May.
- The full MNI US CPI Preview will be published later today.
