CHINA-RUSSIA: Wang And Lavrov Promise Closer Cooperation In 2025
Chinese Foreign Minister Wang Yi and Russian Foreign Minister Sergei Lavrov promised closer bilateral cooperation in 2025, following a meeting on the margins of the G20 Foreign Ministers meeting in Johannesburg, South Africa. TASS reports that the pair will meet again "soon" in Moscow. "We have arranged for your visit to Moscow. Our next meeting will take place in the Russian Federation," Lavrov said.
- Per Reuters, Wang said: "China willing to further advance China-Russia relations in the new year," with Lavrov stating: "Russia [is] willing to work with China to strengthen high-level exchanges, others."
- The Russian Foreign Ministry said in a statement ahead of the meeting: "The parties praised the development of political dialogue and practical interaction between Russia and China as a stabilizing factor against the backdrop of continuing turbulence in the global system,"
- The G20 meeting is the first since US President Donald Trump took office. And the first since the start of the Ukraine war without a frontline effort from US officials to corral support for Ukraine and advocate for measures to isolate Moscow.
- Notably, US Secretary of State Marco Rubio chose to skip the summit, citing host South Africa's 'anti-American' policies, raising concerns in the West that Washington could abandon multilateral formats in favour of bilateral negotiations.
- EU foreign policy chief Kaja Kallas said told the summit earlier today: “Multilateralism is under threat right now. We also need to use this opportunity to develop the international system further to be more inclusive for all countries in the world.”
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BONDS: EGBs-GILTS CASH CLOSE: Bull Flatter
Gilts outperformed Bunds in a bull flattening move across European curves Tuesday.
- European bonds fluctuated overnight, with competing moves as US President Trump opined on tariff imposition. Supply weighed on EGBs, with France and Lithuania conducting syndications (France's 15Y OAT seeing record order books >E134B). For their part. Gilts saw limited pressure on a Jan-40 Gilt syndication.
- After weakening for most of the European morning session, global FI saw a recovery in the afternoon triggered by a slightly softer than expected Canada CPI report.
- European data was largely shrugged off: UK labour market figures were mixed (soft quantity readings vs. firmer-than-expected private wages). German ZEW expectations fell by more than expected.
- The German and UK curves bull flattened. Periphery EGB spreads to Bunds closed slightly tighter, with semi-core French OATs outperforming on the aforementioned well-received syndication.
- Wednesday's calendar is highlighted by ECB speakers including Lagarde, with data including UK public finances.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 0.7bps at 2.215%, 5-Yr is down 1bps at 2.318%, 10-Yr is down 1.6bps at 2.51%, and 30-Yr is down 2.8bps at 2.731%.
- UK: The 2-Yr yield is down 4.3bps at 4.334%, 5-Yr is down 5.1bps at 4.337%, 10-Yr is down 6.9bps at 4.59%, and 30-Yr is down 5.9bps at 5.151%.
- Italian BTP spread down 1.2bps at 108.1bps / French OAT down 1.2bps at 77bps
US 10YR FUTURE TECHS: (H5) Gains Considered Corrective
- RES 4: 110-25 High Dec 12
- RES 3: 109-31 High Dec 18
- RES 2: 109-17+ 50-day EMA
- RES 1: 109-04/109-06 High Jan 21 / High Dec 31
- PRICE: 108-23+ @ 17:05 GMT Jan 21
- SUP 1: 108-00/107-06 Low Jan 16 / 13 and the bear trigger
- SUP 2: 107-04 Low Apr 25 ‘24 and a key support
- SUP 3: 107-00 Round number support
- SUP 4: 106-11 2.00 proj of the Oct 1 - 14 - 16 price swing
The medium-term trend condition in Treasury futures remains bearish and the recovery that started Jan 13, is considered corrective. The contract has traded through the 20-day EMA, at 108-17. This exposes 109-06, the Dec 31 high, and 109-17+, the 50-day EMA. A clear break of the 50-day average is required to strengthen a bullish theme. The bear trigger has been defined at 107-06, the Jan 13 low.
FED: US TSY TO SELL $95.000 BLN 4W BILL JAN 23, SETTLE JAN 28
- US TSY TO SELL $95.000 BLN 4W BILL JAN 23, SETTLE JAN 28
