SECURITY: Ukraine "Proximity Talks" To Take Place In Riyadh On Monday (1/2)
US President Donald Trump’s Ukraine envoy, Keith Kellogg, confirmed yesterday that US officials will lead “proximity” talks between Ukraine and Russia at a hotel in Riyadh on Monday, March 24: “…one group’s going to be in this room, one group’s going to be in this room, and we’ll sit and talk, go back and forth,” Kellogg said.
- The first priority is to formalise a 30-day energy infrastructure ceasefire and begin talks on establishing a maritime/shipping truce. US State Dept spokesperson Tammy Bruce said: “We are just a breath away from a full ceasefire, and then we can begin to talk about [an enduring peace]…”
- Laura Rozen at Diplomatic reports, “the US side aspires to make enough rapid progress to be able to announce a ceasefire deal in short order. It also hoped to hold some sort of trilateral meeting with all three parties as early as Tuesday.”
- Negotiations will be at senior staff level, with members of US NSA Michael Waltz’s team and State Dept representing the US. The Russia team includes Grigory Karasin – a former diplomat involved in negotiating the 2015 Minsk agreements - and Sergei Beseda, an advisor to Russia’s FSB.
- Parallel to negotiations, Ukraine President Volodymyr Zelenskyy is seeking to bolster defence ties with Europe to fill the shortfall in military aid left by Trump's withdrawal as Kyiv’s primary backer. European leaders said yesterday they will continue to support Ukraine, but they did not immediately endorse a call to provide Kyiv ~5 billion euros for artillery ammunition, per Reuters.
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OEH5 117.25/117.75cs, bought for 7.5 in 3k.
BUNDS: /SWAPS: Defence Spending Risks Bearish For Long End Swap Spreads
{GE} BUNDS/SWAPS: German ASWs vs. 3-month Euribor are tighter but trade within 0.5bp of yesterday’s closing levels after debt issuance risks surrounding increased defence spending helped counter the (initially U.S. swap spread-driven) widening seen late last week.
- The Buxl ASW is the only spread which hasn’t fully retraced last week’s move.
- We have suggested that fundamentals point to continued tightening pressure in long end ASW spreads in the medium-term and increased defence spending would add further weight to this idea, as does the potential for debt brake reform.
- More broadly, Commerzbank play down the likelihood any fundamental regulatory shifts within EUR markets, noting note that “while ECB heavyweights are now actively calling for regulatory relief, we doubt that the Leverage Ratio is the binding constraint for € repo intermediation considering GC/specialness dynamics during the past 15 months.”
- As a result, Commerzbank reaffirm their view that “recoveries in (ultra-)long Bund spreads should be used to add to structural shorts.”
Fig. 1: German ASW Spreads (Vs. 3-Month Euribor)
Source: MNI - Market News/Bloomberg
BONDS: US and UK Roll views
These could pick up with Friday's PMIs in mind, and they will be concluded on the 27th for Gilt and 28th Feb for Treasuries.
JPM:
- WNA: Bullish.
- USA: Bullish.
- UXY: Mildly bearish.
- TYA: Mildly bearish.
- FVA: Bearish.
- TUA: Bearish.
DB:
- WNA: Bullish.
- USA: Bullish.
- UXY: Mildly bearish.
- TYA: Mildly bearish.
- FVA: Bearish.
- TUA: Bearish.
Soc Gen:
- WNA: Bearish
- USA: Neutral/Bearish.
- UXY: Neutral.
- TYA: Mildly Bearish.
- FVA: Bearish.
- TUA: Mildly Bearish.
UBS:
- UBS recommend selling Gilt Roll.
