EU: VdL Outlines Commission's MFF Proposals
European Commission President Ursula von der Leyen is outlining the Commission's proposals for the next Multiannual Financial Framework, the EU's long-term budget running 2028-34. Livestream here. VdL claims that member state contributions to the budget "will remain constant" while proposing a "step change in direct revenue" for the MFF. The Commission has confirmed its overall figure of just below EUR2 trillion for the period.
- VdL says that the EU has tripled its budget for migration and border management.
- Claims that "respect for the rule of law will apply to all EU funding." Likely to prove a major issue in negotiations. Those countries hit by Article 7. proceedings such as Hungary unlikely to acquiesce to tighter rules on receiving EU funds.
- VdL claims that the Competitiveness Fund 'will back the strategic technologies of tomorrow', and that the new budget proposes the doubling of Horizon Europe R&D funding.
- Claims that a "five times increase in defence spending reflects how security is a top concern fo citizens and gov't."
Euronews outlines the breakdown in the main pillars: "Her blueprint remodels the budget's structure along three main pillars: €865 billion for agricultural, fisheries, cohesion and social policy. €410 billion for competitiveness, including research and innovation. €200 for external action, including €100 billion for Ukraine."
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IRAN: Risk Sentiment Improves as Iran Reportedly Approach Ceasefire Mediators
- Iran have reportedly approached Qatar, Saudi Arabia and Oman to ask President Trump to press Israel to agree an imminent ceasefire, according to Reuters sources. In return, Iran are reportedly offering flexibility in nuclear negotiations with the US.
- Markets holding, and building, on their risk-on moves as these Iran headlines cross - equities remain favoured with the e-mini S&P still higher by ~75 points to show above the Thursday high.
- The USD remains pressured in G10 to keep the broader downtrend intact while oil prices slip sharply: WTI crude is now off over 4% on the day.
ILS the primary beneficiary: USD/ILS is lower by over 3.5% on the day and well through the Wednesday lows: as such, the pair has reversed the entirety (and then some) of the move triggered by the first reports of imminent action against Tehran.
CROSS ASSET: Crude & Gold Sold, Bonds & Stocks Bid On WSJ Iran Report
Crude oil (loses ~$2.50) and gold offered, Tsys (on inflation readthrough from lower crude) and equities bid, after WSJ sources note that “Iran has been urgently signaling that it seeks an end to hostilities and resumption of talks over its nuclear programs, sending messages to Israel and the U.S. via Arab intermediaries.”
- The piece goes on to note that “in the midst of a ferocious Israeli air campaign, Tehran has told Arab officials they would be open to return to the negotiating table as long as the U.S. doesn't join the attack. They also passed messages to Israel saying it is in the interest of both sides to keep the violence contained”.
- The BBDXY trades to fresh session lows on the news.
EQUITIES: US Program Buyer on the Open
- Program buyer on the Cash Open, 1499 names, the most since 27th May.
- Next Immediate resistance in SPX comes at 6059.40, last Week's high, and also the best printed level since February, the Index is now trading at 6021.42.
