US: Trump's Deportation Programme Faces Public Opinion Test As It Broadens Scope
A CBS News/YouGov poll “completed just prior to Saturday's protests and events in Los Angeles”, found that 54% of voters approved of the Trump administration's program to deport immigrants illegally in the US. CBS added: “But if people don't think it is dangerous criminals who are the focus of the deportation effort, support drops dramatically.”
- White House communications director Steven Cheung tweeted in response that, "...the approval number will be even higher after the national guard was sent to LA to beat back the violence this weekend.”
- Axios writes: “President Trump undoubtedly stands on strong political ground, backed by most Americans, in cases where he's deporting convicted criminals… Now comes a new test… How comfortable are Americans with deporting millions of immigrants who paid taxes, built families and committed no crimes after coming here illegally?”
- Semafor writes: “A Democratic strategist argued Trump has already succeeded in diverting attention away from his feud with Elon Musk and the messy legislative debate over his spending package: “He wants to see people standing on top of burning cars, waving the Mexican flag — that’s the exact imagery that can help him overperform in the midterm elections.””
Figure 1: Trump Administration’s Programme to Deport Immigrants Illegally in the US
Source: CBS News/YouGov
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OPTIONS: Busy Euribor Trade Includes Continued Call Condor Closeout
Monday's Europe rates/bond options flow included:
- RXN5 133.50c, bought for 14.5 in 4k
- ERM5 97.875/98.00/98.125/98.25 call condor, sold out at 7.25 in 8k (continuing closing out from prior sessions)
- ERU5 98.125/98.1875/98.3125/98.375 condor vs 97.9375/97.8125 put spread, paper sells for 0.25 in 9k (sells the condor)
- ERU5 98.50/98.37/98.25/98.00p condor sold at -1.75 and -2 (receive) in 16.5k
- ERZ5 98.50/98.25ps 1x2 bought the 1 for 1 in 20k
- ERH6 99.12/99.37cs, bought for 1.25 in 10k
BOE: Taylor On Neutral Rate Estimates
- Taylor: Another reason why I felt comfortable with the activism of a 50bp cut [last week]. I think we're a long way from neutral. That view may not be shared, but from my own research, which I did in the past and which is now it's in the public domain. You can download the codes and run them yourselves.
- I think neutral for euro area is close to zero, and neutral for US and UK is close to one. For me, maybe 0.75-1% in the UK [real]. So I see neutral policy rate for us, as I said in the Leeds speech (Jan 15, when he had two of three cases seeing a 0.7% r*), at sort of 2.75-300% for me.
- The market is at the moment expecting a terminal rate which is markedly higher than that.
GERMANY: ECB's Nagel: Call On Government To Overcome Growth Obstacles
"The Bundesbank has called on the federal government to overcome the obstacles that are hampering economic growth. Germany must improve its infrastructure, expand its labour supply, digitize and accelerate public services, reduce bureaucracy and strengthen its defence capabilities", Bundesbank President Nagel said in a joint interview with Bank of Spain chief Escrivá with Süddeutsche Zeitung and El Mundo today.
- The demands highlighted by Nagel do resemble the view of the new government, which is scheduled to lay out in further detail their plans to tackle the weak German economic conditions in a declaration on Wednesday. At least parts of the plans have been flagged before following media reports as well as the CDU/CSU/SPD coalition agreement.
- The Bundesbank is mandated to consult the federal government on economic topics next to their primary mandate of ensuring price stability as a part of the Eurosystem.
- "The debt ratio must fall again after an adjustment phase. Germany's obligation to comply with European fiscal rules remains unchanged", Nagel added.
