US: Trump Get Approval Boost From Improved Views Of The Economy - WSJ
Jul-25 17:21
A new survey from the Wall Street Journal has suggested that President Donald Trump’s approval rating is being lifted by improved views of the economy.
- The Journal notes: “Buoyed by voters’ improving views of the economy, President Trump’s political standing is showing notable resilience, despite the unpopularity of the GOP’s big tax-and-spending law, dissatisfaction with Trump’s tariff plan and high suspicion that the government is hiding important information about its investigation into Jeffrey Epstein.”
- According to the survey, “Some 47% in the survey rated the economy as excellent or good—a significant, 11-point leap from April and the most positive rating in Journal surveys dating to 2021. Some 51% of voters assessed the economy as not good or poor, compared with 63% who said so in April.”
- The survey comes amid a pronounced dip in Trump's approval rating across a range of key issues. Silver Bulletin notes that while Trump is still more popular now than he was at this point in his first term, "that might not be true for much longer... Trump’s net approval rating is only 5.5 points higher than it was on day 184 of his first term."
Figure 1: Percentage of Voters who view the Strength of the Economy as Positive
Source: Wall Street Journal
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INFLATION: 1Y Inflation Expectations Trend Lower Whilst 1Y1Y Steady
Jun-25 17:10
- US 1Y market inflation expectations have been below levels just before US Liberation Day tariff announcements of Apr 2 for most of June although are trending lower.
- However, at 3.05%, these 1Y CPI inflation swaps are only back to late March levels and hold a large portion of the widening vs 1Y1Y expectations since President Trump’s inauguration.
- WTI futures plunged early this week on the limited Iranian response to US airstrikes on nuclear facilities and a subsequent Israel-Iran ceasefire. However, with the August contract at $66/bbl, it’s only back to mid-June levels and at the lower end of pre-tariff rough ranges of $65-70/bbl.
- This is something partly reflected by the recent pullback in surveyed short-term inflation expectations, including in yesterday’s Conference Board consumer survey, leaving them with mixed degrees of relative elevation (see here).
- It follows trade policy de-escalation but with further focus increasingly turning to further trade deal prospects ahead of the current 90-day window ending July 8th.
- EUR CPI swaps meanwhile have seen the opposite, with the 1Y pushing back towards pre-Apr 2 levels having dropped sharply on growth fears. There have however been warning shots recently as deliberations continue – no deal would see tariff rates of 50% on nearly all EU goods exports from July 9th.
- Specifically, Reuters last week reported that European officials are increasingly resigned to a 10% baseline rate on reciprocal tariffs in any US-EU trade deal. One of the sources, an EU official, said negotiating the level down had become harder since the U.S. started drawing revenues from its global tariffs. "10% is a sticky issue. We are pressing them but now they are getting revenues," said the official.
- Bloomberg yesterday then reported that the EU is planning to impose retaliatory tariffs on US imports, including on Boeing, if the US puts a baseline tariff on EU goods.
PIPELINE: Corporate Bond Update: $3B CaixaBank 3Pt Launched
Jun-25 17:09
- Date $MM Issuer (Priced *, Launch #)
- 06/25 $3B #CaixaBank $1B each: 4NC3 +90, 6NC5 +105, 11NC10 +130
- 06/25 $1.25B *Swedish Export Cr 2Y SOFR+35
- 06/25 $1B #Cheniere Energy +10Y +128
- 06/25 $750M *Resolution Life 10Y 6.75%
- 06/25 $Benchmark Welltower 5Y +95a, 10Y +115a
- 06/25 $Benchmark Honda 3Y +90a, 5Y +100a, 10Y +120a
- 06/25 $Benchmark Republic of Peru +10Y +125, 30Y +140
- 06/25 $1B Czechoslovak Grp 5.5NC2 6.5%a (dual currency w/ E1B)
US TSYS/SUPPLY: Review 5Y Auction: Tail
Jun-25 17:04
- Tsy futures retreat slightly (FVU5 to 108-20.75 from 108-21.5 at the cutoff) after the latest $70B 5Y note auction (91282CNK3) tailed: 3.879% high yield vs. 3.872% WI; 2.36x bid-to-cover vs. 2.39x prior (5 auction average).
- Peripheral stats: Indirect take-up retreats to 64.68% from 78.4% prior, directs rebound to 24.44% vs. 12.4% prior (5 auction low), primary dealer take-up at 10.88% vs. 9.2% prior.
- The next 2Y auction is tentatively scheduled for July 28.
