US-RUSSIA: Trump Demand For Unchecked Authority Could Sink Russia Sanction Bill
Jul-11 09:30
Senate Democrats could withdraw support from the pending 'Sanctioning Russia Act of 2025' if President Donald Trump is provided unchecked authority over the implementation of primary sanctions and secondary tariffs.
- Bill co-author, Senator Lindsay Graham (R-SC), has touted the package as having veto-proof support. However, as Trump leans towards endorsing the package, Graham is including language to insulate Trump from Congressional oversight. Trump told NBC that the bill "lets the president do whatever he wants... it’s at my option if I want to use it.”
- Democrat cosponsor Senator Tim Kaine (D-VA) said while a waiver is "pretty normal," he "would have some problem" with an "open-ended” waiver. Another Democrat cosponsor, Chris Coons (D-DE), said Trump is "going to try and essentially take the force out of a strongly bipartisan sanctions bill”.
- Senate Majority Leader John Thune (R-SD) has indicated he will take up the bill on the week of July 21, shortly before a month-long Congressional recess. The bill would impose primary sanctions on Russia if it initiates another military operation against Ukraine or refuses to engage in good faith negotiations with Ukraine. It also imposes a 500 percent tariff on imported goods from countries that buy Russian oil, gas, uranium, and other products.
- The implied probability of Trump increasing sanctions by August hit 50% shortly after Graham’s bullish comments this week, per Polymarket.
Figure 1: Will Trump increase sanctions on Russia before August?
Source: Polymarket
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EURIBOR OPTIONS: Longer Dated Put Ladder
Jun-11 09:23
ERM6 98.37/98.25/97.93 broken p ladder, bought for flat in 6k.
FOREX: Vols See Minimal Pre-CPI Premium, DXY Clear of Test of Downtrendline
Jun-11 09:21
- The USD Index is firmer, but well off session highs - keeping markets clear of any material test on the downtrendline resistance drawn off the early February high (today crossing at 99.462, just below the 100.004 50-dma). This level remains a key focus headed through the several inflation releases this week (CPI today, PPI tomorrow).
- Meanwhile, the front-end of the G10 FX vol curve remains subdued headed into today's CPI print, with vols sold on the back of confirmation that US and Chinese officials had agreed on an approach for trade negotiations - that now awaits sign-off from the Chinese, US Presidents. Statements from both sides show little substantive progress on the key issues, leaving an element of uncertainty on the table ahead.
- EUR/USD is well off lows, but spot remains inside the weekly range - the ECB's wage tracker saw a minor upward revision - leaving little ripple in ECB rates markets that price one further 25bps rate cut before year-end.
- With overnight USD/JPY vols briefly above 15 points today, either side of the post-Liberation Day average, which suggests the underlying spot downtrend remains intact for now, despite the bounce off last week's lows. As such, 142.12 / 145.29 remain the key parameters.
CROSS ASSET: Markets Look Through Mixed China Statement On U.S. Trade Matters
Jun-11 09:18
E-minis slightly lower since the Chinese readout following trade talks with the U.S. crossed, but the moves are tiny.
- It doesn't look like any meaningful agreements have been struck, with Chinese language a mix of constructive and reaffirming the country's ability to act to defend its interests.
- CNH FX unmoved.
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