SECURITY: Witkoff Meeting w/Putin Underway Ahead Of Trump Ceasefire Deadline 1/2
Aug-06 09:10
A meeting between US President Donald Trump’s Middle East envoy, Steve Witkoff, and Russian President Vladimir Putin is underway in Russia, per Interfax. The meeting comes ahead of Trump’s Friday deadline for Russia to reach a ceasefire with Ukraine or face new penalties. Measures could include fresh sanctions on Russia's economy and secondary tariffs on countries that buy Russian oil and gas.
- Speaking at the White House yesterday, Trump appeared to downplay the scope of potential secondary tariffs: "I never said a percentage, but we'll be doing quite a bit of that. We'll see what happens over the next fairly short period of time... We have a meeting with Russia tomorrow… We’ll make that determination at that time..."
- Trump said on July 15: "We're going to be doing secondary tariffs if we don't have a deal... It's very simple. And they'll be at 100%." The 100% number was itself a step down from a punitive 500% secondary tariff proposed by bipartisan legislation in the Senate. The Senate since parked the bill, giving Trump unilateral control over any sanctions.
- Ahead of today’s meeting, Bloomberg reported that the Kremlin is weighing up proposing an “air truce” as a concession to head off sanctions. While an air truce is unlikely to lead to a durable ceasefire, it could provide an off-ramp for Trump to claim a win without backing down from his threat (inviting more TACO accusations) or pursuing secondary tariffs that could derail delicate trade talks with China.
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GBP: USD Bounce Has Major Pairs Testing Key Levels
Jul-07 09:05
- The USD's bounce Monday is providing some relief for the USD Index, which now sits 1% above last week's cycle lows to put the currency on a surer footing. As a result, the major pairs are seeing pressure toward the the post-NFP lows - with EUR/USD and GBP/USD challenging 1.1718 and 1.3586 respectively.
- Rates markets are endorsing USD gains here: the US curve is steeper as the global long-end continues to underperform. This backdrop, allied with any deterioration in trade relations between the US and the RoW remains a key market focus, particularly with the fluidity around Trump's approach to tariffs and the suite of reciprocal trade tariff deadlines looming over markets this summer.
- A correction lower through 1.3563 would be consequential for GBP/USD, and raise the likelihood of a test on the 50-dma support in the near-term. This level has held well and helped define the rally over the course of 2025 - crossing at 1.3477 today. In trend terms, we note that the 50-dma now trades with the largest % premium over the 200-dma since the bounce off lows in 2009. The premium currently sits at ~4.2% vs. the 2009 peak of ~8.2%, mid-Global Financial Crisis.
MNI: EUROZONE MAY RETAIL SALES -0.7% M/M, +1.8% Y/Y
Jul-07 09:00
- MNI: EUROZONE MAY RETAIL SALES -0.7% M/M, +1.8% Y/Y
EUROZONE DATA: May Retails Sales Weak As Expected, Non-Food & Fuel Carry Y/Y
Jul-07 09:00
Eurozone (real) retail sales were overall broadly in line with (weak) expectations in May on a sequential comparison, at -0.7% M/M (-0.6% M/M cons; +0.3% April, revised from +0.1%).
- Across sectors, all main categories fell: Food, drinks, tobacco -0.7% M/M, non-food products (except automotive fuel) -0.6%, automotive fuel -1.3% - neither of the categories has exhibited a clear directional trend YTD.
- Also across countries, May weakness appears quite broad-based, with Spain the strongest out of the "big 4" EZ countries at a mere 0.2% M/M.
- The overall Y/Y print was 1.8% in May, a bit firmer than consensus of 1.4% (2.7% Apr, revised from 2.3%). Across categories, previous trends prevail here: Non-food products and auto fuel tend to fare better than the food, drinks, tobacco category.
- Consumer confidence gives a rather weak outlook for retail sales in the Eurozone: "Consumer confidence remained broadly stable [on a, we would say, weak level of -14.8]. Although consumers were notably less pessimistic about the future general economic situation in their respective country, their intentions to make major purchases over the next 12 months dropped. Additionally, their perceptions of both their household’s past and expected financial situation deteriorated somewhat", the European Commission commented on the latest respective release.
- A June McKinsey study found that inflation remains consumers' main concern in the EU, although this has decreased compared with last year.
