UKRAINE: Zelenskyy Delivers Address As Ukraine Recovery Conference Underway
Ukrainian President Volodymyr Zelenskyy is now speaking at the Ukraine Recovery Conference that is now underway in Rome. Livestream here. The annual conference brings together national leaders and figures from business and civil society with the intention of aiding Ukraine's recovery and reconstruction in the wake of Russia's full-scale invasion. Attendees include European Commission President Ursula von der Leyen, German Chancellor Friedrich Merz, Polish PM Donald Tusk, and European Council President Antonio Costa.
- In her address, Italian PM Giorgia Meloni said that "We want to work with Ukraine to avoid [the scenario] that those who helped the Russian war machine may benefit from [Ukraine's] reconstruction." Adds that Italian hydrocarbons giant Enel and arms manufacturer Leonardo will sign agreements with Ukrainian firms on strategic projects as part of the conference. Says that Italy will give "a strong contribution" to a new Europpean investment fund for Ukraine. Says the conference will see the commitment of more than EUR10bln for the reconstruction of Ukraine.
- Later today, UK PM Sir Keir Starmer and French President Emmanuel Macron co-host a meeting of the 'coalition of the willing' countries that have pledged continued support for Kyiv and the prospect of boots on the ground as peacekeepers in the event of a ceasefire.
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GILTS: Labour Market-Driven Rally Holds, Next BoE Cut Priced For Sep
Gilts remain underpinned after drawing support from softer-than-expected wage data and a larger-than-expected fall in payrolled employees.
- Downticks in e-minis and European equity indices provided further support (but lacked an overt driver), even with the FTSE 100 benefitting from a softer GBP.
- Gilt futures traded as high as 92.66 before fading back to ~92.50, adding more than 70 ticks vs. yesterday’s settlement.
- Initial resistance located at the June 5 high (92.63) has been pierced, with bulls now looking to a Fibonacci resistance point (92.79).
- Yields 5-7bp lower, 10s outperform on the curve.
- 2-Year yields set for the lowest close seen since May 9, while 10s and 30s trade below their respective closes from the same day.
- 2s10s holds above 60bp, with recent moves below that level limited in scope and short-lived.
- 5s30s trade around 120bp after the recent run of closes below the level.
- GBP STIRs now fully discount the next 25bp cut come the end of the September MPC, with 48bp of cuts showing through year-end (vs. 41bp late yesterday). Labour market data drives things there.
- Books on the 1.75% Sep-38 I/L gilt syndication are closed, with demand nearing ~GBP60bln ~15 minutes before books closed (per bookrunners).
- Macro matters are set to dominate for the rest of the day, with domestic inputs (comments from BoE’s Saporta & the government spending review) set to come back to the fore tomorrow.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Jun-25 | 4.208 | -0.3 |
Aug-25 | 4.019 | -19.3 |
Sep-25 | 3.957 | -25.5 |
Nov-25 | 3.800 | -41.2 |
Dec-25 | 3.730 | -48.2 |
Feb-26 | 3.629 | -58.3 |
Mar-26 | 3.606 | -60.6 |
BELGIUM T-BILL AUCTION RESULTS: Short / Long TCs
| Maturity | Sep 11, 2025 | Jun 11, 2026 |
| Amount | E880mln | E1.601bln |
| Target | E2.2-2.6bln | Shared |
| Previous | E897mln | E801mln |
| Avg yield | 1.911% | 1.926% |
| Previous | 1.930% | 1.895% |
| Bid-to-cover | 2.77x | 2.21x |
| Previous | 2.37x | 3.06x |
| Previous date | Jun 03, 2025 | Jun 03, 2025 |
SONIA: OPTINS: SFIZ5 96.15/96.00 Put Spread Sold
SFIZ5 96.15/96.00 put spread 15K given at 4.25.
