MNI EXCLUSIVE: Trade Discussion Notes Between EC and EU Trade Ministers

US President Donald Trump continues to receive poor polling numbers in surveys taken after his April 2 'Liberation Day' tariff announcement. Morning Consult reports: “Trump’s approval rating has slumped to 45%, the lowest point of his second term so far as Americans react to his trade policies, while 52% disapprove, tying last week’s record-high rating since he took office in January. For the first time since May 2021, more voters trust Democrats in Congress than their Republican counterparts to handle the economy (46% to 43%).”

• The Washington Post reports: “Even before the shock of price increases have hit shelves, Trump’s poll numbers have taken a hit. After entering March with narrowly positive ratings overall, the president now faces a disapproving citizenry, with worse ratings on the economy and even worse ratings on his tariffs.”

Figure 1: Expectations for the Economy Over the Next Year

Source: Washington Post

Gilts handily outperformed Bunds Tuesday.

• Softer-than-expected elements of the UK labour market report saw Gilts get off on the front foot across the curve.
• Gilts rallied into the close, potentially in anticipation of tomorrow's CPI data, unlike Bunds which were unmoved.
• On the day, the UK curve twist steepened with a notable rally at the short end, with Germany's bear steepening.
• Italy and Greece underperformed on the EGB periphery.
• Wednesday's data includes UK CPI - MNI's preview is here. And Thursday brings the ECB decision - preview here.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 0.7bps at 1.766%, 5-Yr is up 1.6bps at 2.09%, 10-Yr is up 2.2bps at 2.534%, and 30-Yr is up 3.8bps at 2.915%.
• UK: The 2-Yr yield is down 5.6bps at 3.962%, 5-Yr is down 4.3bps at 4.11%, 10-Yr is down 1.2bps at 4.648%, and 30-Yr is up 4.3bps at 5.427%.
• Italian BTP spread up 1.7bps at 118.2bps / Greek up 2.9bps at 92.4bps 

• -3,500 UXYM5 113-17, sell through 113-17.5 post time bid at 1334:30ET, DV01 $308,000. The 10Y ultra contract trades 113-17 last (+15).