SECURITY: Trump Speaks On NATO & Iran-Israel Ceasefire
Speaking at the NATO summit, US President Donald Trump says, "We're with them all the way" when asked by reporters about the US' commitment to Article 5 (the collective defence clause. Adds that "NATO will be very strong". NATO Secretary General Mark Rutte praises Trump on getting NATO countries to increase defence spending, says that "Today we will decide to go to 5% [of GDP]," adding "This is about Europeans and Canadians paying more, not American taxpayers."
- Trump says that the Iran-Israel ceasefire is "going well". Asked on Iran's uranium enrichment plans, Trump says, "We will not allow that militarily...Iran is not going to have a bomb...the last thing Iran wants to do is enrich anything." Says the US will have "somewhat of a relationship" with Iran.
- Asked on the NYT report claiming that, according to intel reports, the US strikes on enrichment facilities only caused superficial damage, Trump says, "They really don't know". Adds "I believe it was total obliteration." Claims the Iranian nuclear programme has been put back "decades" and that the US strike "ended the war".
- Asked if the US would strike Iran again if it rebuilds nuclear sites, Trump responds: "Sure".
- US Secretary of Defence Pete Hegseth says that "The bombs landed right where they were supposed to, it was devastation". Says there will be an investigation into the leak of the report. Secretary of State Marco Rubio says the Iranian conversion facility "can't even be found on the map, it is wiped out."
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SWAPS: German ASWs Lower After Tariff Relief
German ASWs move lower this morning, on relief stemming from President Trump’s delay of the 50% EU tariffs.
- Spreads vs. 3-month Euribor are ~1.3bp lower across the curve, with essentially all of the widening that followed Trump’s initial Friday outlining of the tariff on the EU unwound.
- This suggests that the market is viewing a move back to the pre-Trump social media comment norms as the likely outcome, given the “very good” talks held over the weekend and Trump’s recent history of watering down tariff threats.
BOBL: Another Block In Futures
Another block trade lodged in Bobl futures, 3,480 lots blocked at 118.840, although prevailing quotes point to a buyer, price action would suggest it was a seller once again. DV01 ~EUR216K.
US TSYS: Lower On EU Tariff Delay, Cash Closed, Futures Volume Boosted By Rolls
President Trump’s EU tariff delay pushed TY futures through Friday’s lows in early Asia trade, with the contract in a holding pattern since then, last -0-08 at 109-26+ vs. session lows of 109-24+.
- Initial support of note at the May 22 low (109-13), with bears remaining in technical control despite Friday’s rally.
- A reminder that cash Tsys are closed for the Memorial Day holiday and futures will close early (13:00 NY/18:00 London).
- Roll activity is boosting volumes, latest estimated roll completion updates below:
- TU: 55.4%
- FV: 54.1%
- TY: 55.5%
- UXY: 43.6%
- US: 57.5%
- WN: 55.5%
