RENEWABLES: UK Morning Wind Forecast

Core global FI markets firm through early London trade, although market liquidity remains thin given the time of year.

• Spillover from Friday’s move lower in crude oil is probably lending some support to EGBs as they play catch up to the uptick in Tsys, while e-minis edge lower, providing further cross-market support.
• No meaningful spillover from the summary of opinions covering the latest BoJ meeting, which pointed towards the likelihood of further tightening.
• Bunds trade as high as 127.77, breaching first resistance at 127.52. Bulls now look to the nearby 20-day EMA (127.87). A break there would pose a deeper threat to the bearish technical theme.
• First support located at 126.75.
• German yields 0.5-2.5bp lower, curve bull flattens.
• EGB spreads vs. Bunds are printing mixed and it’s hard to gauge true levels in current liquidity conditions.
• U.S. President Trump’s positive rhetoric surrounding the Russia-Ukraine conflict was noted over the weekend, despite familiar sticking points remaining in place. Ukrainian counterpart Zelensky described weekend talks as "90%" of the way to a deal.
• Little of note on the G20 calendar today.

A screen sale of TYH6 helps cap the aforementioned bid, 1.9K given at 112-23.

Zelensky arrived at Mar-a-Lago yesterday evening for the latest meeting with President Trump, at which progress appears to be being made on proposals to end the war with Russia.

• Ahead of the meeting, Trump stated there are the "makings of a deal" - comments that seem to stem from Zelensky leaving open the possibility that Ukraine could surrender territory in the Donbas in return for a ceasefire along current lines. The caveat being the proposals would be subject to a referendum among the Ukrainian population.
• Expectedly, Putin has already rejected these terms for a ceasefire, which they see as only temporary and resulting in a "prolongation" of the war, but Russia and the US remain engaged. Zelensky described the talks as "90%" of the way to a deal.
• On the frontlines, this adds pressure to both sides to retain, or grow, their currently held territory - with Trump suggesting yesterday that Russia would soon capture all the remaining Donbas - adding pressure to Ukraine to accept a proposed deal.