EQUITIES: US Cash Opening calls, some focus on Boeing

• Latvia has announced a mandate for a new 5-year EUR benchmark to be launched in the "near future, subject to market conditions."
• MNI expects a transaction tomorrow.
• The Latvian Treasury expects to borrow E3.6bln in 2025 and so far has raised E420mln via tap auctions so far this year (leaving almost E3.2bln remaining).
• In May last year a 10-year USD bond was sold for USD1.25bln and the largest EUR-denominated bond sold in the last 6 years was a 10-year for E1.25bln in March 2021.
• 2030 currently only has a one bond due to mature: E600mln of the sustainability bond launched via syndication in 2021 which hasn't been tapped since.
• We therefore think there is a good chance that we see a large transaction of E1.0-1.5bln.

In the wake of the Sino-U.S. tariff de-escalation Goldman Sachs note that given expectations for “firmer growth abroad and easier financial conditions, we lift our UK real GDP forecast by 0.2% and now forecast a cumulative 0.6% increase in GDP for Q2-Q4”.

• They also nudge up their headline inflation projection path by 0.2ppt over the next year, reflecting “reduced trade redirection and a smaller energy-related drag”. However, their inflation forecasts remain below the MPC’s May projections.
• As a result, they now expect the BoE to cut to 3.00% in February (vs 2.75% in March previously). Following recent hawkish commentary, they continue “to look for a pause in June but maintain the view that the MPC will accelerate to sequential cuts in H2 based on faster wage growth and services disinflation in the coming months.”
• Goldman now see the risks around their “baseline as more skewed towards slower cuts - with a 35% chance of continued quarterly cuts”, but note that their “probability-weighted forecast remains below market pricing”.

Goldman Sachs have also removed one ECB cut from their baseline projection, now expecting 25bp cuts in June and July to a terminal of 1.75%. They note that it is “possible that the Governing Council decides to pause in July and cut in September instead if the data or trade negotiations surprise positively over the summer”, and “continue to see risks skewed towards more cuts than included in our baseline (with a subjective probability of 30%) given ongoing uncertainties around the trade outlook”.

• “Our updated estimates point to a Euro area real GDP upgrade of 0.2%—reflecting better foreign growth and easier financial conditions—for a total trade-related Euro area activity hit of -0.7%”.
• “The US-China trade deal implies less global trade rerouting and more limited downside pressure on Euro area goods prices. Updating our model now points to a drag of 0.25% on the level of core HICP (vs 0.45% before)”.
• “Taking into account also recent changes to the Euro and incorporating incrementally dovish rumours on EU retaliation relative to our previous assumptions, we nudge up our Euro area core inflation path by 0.1pp for 2025Q4 to 2.1% and 0.1pp to 1.8% in 2026Q4”.