US: Trump's Approval Rating Stabilises But Economy Remains Liability
May-07 17:23
Silver Bulletin has published a new detailed breakdown of President Trump's polling performance, noting that the economy is now a “liability” for the administration, despite a stabilisation of his approval.
- Silver notes: “As you can see, the issue approval pattern from Trump’s first term — when the economy was generally his strongest issue, but he was often fighting losing battles on the “culture wars” — has somewhat reversed. This time around, immigration is one of Trump’s least bad topics, although his numbers have nevertheless declined. However, the economy is a considerably bigger liability.”
- Silver adds: “Still, there’s been a slight rebound in Trump’s numbers over the past week. Might that be because he’s struck a more conciliatory tone on tariffs? The stock market has liked the change in vibes and maybe that’s improving voters’ mood, too. (We suspect that some voters may be relatively sensitive to stock prices.) That’s what this sort of data can help discern. As you can see in the chart, there’s been an uptick in his ratings on trade. And his economic approval has stabilized over the past couple of weeks.”
Figure 1: Trump Approval Rating
Source: Silver Bulletin
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FOREX: AUDUSD Selloff Deepens as US/China Tariff Spat Escalates
Apr-07 17:14
- Headlines surrounding China and further retaliatory tariffs have kept AUD under pressure Monday, and the general US dollar strength through the session has deepened the significant AUDUSD selloff.
- Price action has confirmed a resumption of the downtrend that started late September. Today’s fresh cycle low and extension below the 0.60 mark reinforces a bear theme, which has paved the way for an extension towards 0.5931 next, a Fibonacci projection. Levels of note on the downside include:
- SUP 1: 0.5900 Round number support
- SUP 2: 0.5830 2.000 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.5729 2.236 proj of the Sep 30 - Nov 6 - 7 price swing
BONDS: EGBs-GILTS CASH CLOSE: Long-End Gilts Lead Broader Weakness
Apr-07 17:12
European yields rose Monday despite another sharp drop in equities, with Gilts badly underperforming Bunds.
- Price action picked up more or less where it left off at the end of last week, with a flight to safety on continued concerns over the fallout from large US tariffs due to come into effect this week.
- However, yields reversed higher as equities found a base. UK long end yields saw their biggest one-day rise since October 2022, and one of the few biggest in the last decade, with 30Ys up 20+bp. There was no clear driver for this underperformance, though the APF operation from the BoE saw poor reception.
- Data was largely shrugged off: German industrial production came in on the soft side.
- The German curve twist steepened - Schatz and Bobl being some of the few instruments to strengthen across the European space - with the UK's bear steepening.
- Periphery/semi-core EGBs widened across the board, though closed off the early wides as equities closed off their lows.
- Tuesday's schedule is on the light side in terms of data, though there will be multiple central banker appearances including BOE's Lombardelli and ECB's Holzmann and de Guindos.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 5bps at 1.777%, 5-Yr is down 1.8bps at 2.11%, 10-Yr is up 3.5bps at 2.613%, and 30-Yr is up 3.7bps at 3.016%.
- UK: The 2-Yr yield is up 6.5bps at 3.999%, 5-Yr is up 11.6bps at 4.134%, 10-Yr is up 16.7bps at 4.615%, and 30-Yr is up 20.5bps at 5.321%.
- Italian BTP spread up 6.3bps at 125.3bps / Greek up 3.8bps at 92.9bps
OPTIONS: Prevalence Of Large Call Spread Trades Monday
Apr-07 17:03
Monday's Europe rates/bond options flow included:
- RXM5 126/125/124 put fly, sold out at 3-4 in 10k
- ERK5 98.125/98.25 call spread, bought for 1.25 in 15k
- ERM5 98.125/98.25 call spread has traded in 30k at 1.25. Paper has both bought and sold this structure
- ERZ5 98.0625/98.25 call spread 14.8K given at 10.25
- ERZ5 99.25/99.75 call spread, now trading at 2.25. 20k sold all day at 2.5 down to 2.25
- 0RK5 98.00/98.125 cs, sold at 9 in 52k
- SFIZ5 97.50/98.00 call spread, bought for 3.25-3.5 in 10k
