IRAN: Triggering Iran 'Snapback' Would Initiate 10 Days Of Intense Negotiations
Laurence Norman at WSJ has posted a useful primer on X: https://x.com/laurnorman/status/196071956980...
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US-EU: European Leaders Divided On Deal To Avert Worst Of Tariffs
A number of high-ranking European politicians have expressed their disappointment at the trade deal agreed between US President Donald Trump and European Commission President Ursula von der Leyen over the weekend in Scotland. Most prominent has been French PM Francois Bayrou, who posted on X: “It is a dark day when an alliance of free peoples, united to assert their values and defend their interests, resigns itself to submission”. Chair of the European Parliament's Trade Committee, German MEP Bernd Lange said "My first assessment: not satisfactory. This is a lopsided deal. Concessions have clearly been made that are difficult to accept."
- Trade Commissioner Maros Sefcovic has attempted to defend the deal, claiming in a press conference on 28 July that "This is clearly the best deal we could get under very difficult circumstances,". German Chancellor Friedrich Merz said, "a trade conflict has been averted that would have severely impacted the export-oriented German economy", while Irish Foreign Minister Simon Harris said the agreement gave a "measure of much-needed certainty".
- Others have been circumspect. Danish Foreign Minister Lars Lokke Rasmussen said, “The trade conditions will not be as good as before, and it is not our choice, but a balance must be found that stabilises the situation and that both sides can live with".
- While details on the deal still need to be nailed down, a Commission official raised the prospect of the deal being fast-tracked, rather than being implelemented via a lengthy mechanism (see 'MNI BRIEF:US Deal May Need No Lengthy Ratification-EU Official', 28 July).
STIR: Large Oct'25 SOFR Call Spread Buy
- +60,000 SFRV5 96.18/96.43 call spds 4.5 vs. 96.07 (open interest at 41,624 and 31,339 in the two strikes, respectively).
US TSYS/SUPPLY: Review 2Y Note Auction
- Tsy futures gain slightly but remain offered (2Y Tsy near session low 103-17.75, yield at 3.9319%) after the latest $69B 2Y note auction (91282CNP2) stops through: 3.920% high yield vs. 3.925% WI; 2.62x bid-to-cover vs. 2.58x prior.
- Peripheral stats: Indirect take-up retreats to 55.33% from 60.5% prior, directs climb to 34.37% vs. 26.33% prior, primary dealer take-up 10.30% vs. 13.17% prior.
- The next 2Y auction is tentatively scheduled for August 26.
