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Approaching Major Support


Inflation Concerns Underpin Bear Steepening


Bullish Theme

MNI Banxico Preview - May 2021

Wait And See – Inflationary pressures have remained persistent and the window of opportunity to further loosen policy remains firmly shut. Banxico's governing board are likely to leave the policy rate unchanged at 4% in a unanimous decision, awaiting further evidence of whether the price pressures prove transitory and if metrics are likely to converge to target.


MNI: EU FinMins To Back More Fiscal Effort As Outlook Improves

EU finance ministers see more national fiscal support needed to ensure their recovery fund succeeds.

MNI INTERVIEW2: UK Treasury Should Clarify QE Deal With BOE

The UK Treasury should explain how it would meet a promise to cover any potential BOE losses on QE, NIESR chief Jagjit Chadha tells MNI.

MNI INTERVIEW:BOE Could Sell Gilts In QE Unwind-NIESR's Chadha

The fast expansion of the BOE's balance sheet means gilt sales could be the best way of unwinding QE, NIESR's Jagjit Chadha tells MNI.


Polls Show Recall Vote Against California Gov. Newsom Failing To Gain Steam

The latest Berkely/IGS poll on the expected recall election against California Governor Gavin Newsom shows the initiative failing to gain traction, while potential Republican challengers are also struggling to break through into state-wide consciousness.

  • New Berkeley / IGS poll (April 29-May 5) of California. Sample size: 10,289 registered voters
    • Support for recalling Newsom: Support- 36%, Oppose- 49%, Undecided-15%.
    • Newsom approval: 52%
    • Recall election ballot test: Kevin Faulconer (R) - 22%, John Cox (R) - 22%, Doug Ose (R) - 14%, Caitlyn Jenner (R) - 6 %
  • At present, the required signatures have been submitted for the recall to take place, but we are in a 30-day period where the Newsom campaign can try to convince people to remove their signatures from the petition to take the total below the threshold required to trigger a recall.
  • With this being an unlikely prospect, the recall election would have two questions. The first would ask whether Newsom should be recalled as California governor. The second vote would count if more than 50% of those voting chose to recall Newsom, and would ask who his replacement should be.
  • No Republican candidate is making significant breakthroughs, with former San Diego Mayor Kevin Faulconer and businessman John Cox (both of whom lost to Democrat Newsom in the 2018 gubernatorial race) leading a crowded pack. Celebrity and former Olympian Caitlyn Jenner polls just 6% despite (or perhaps due to) widespread media coverage of her candidacy.
  • Nevertheless, the potential recall remains a way off (likely in November 2021), and a such much could change. The impact of the election could be significant, with the Governor of California commands the largest public funding pot in the US outside of the federal gov't, while media estimates state the recall election race could cost as much as USD400mn according to the president of the California Assn. of Clerks and Elected Officials.

Biden Pushes Infra Plan Ahead Of Governors Meeting

Ahead of his virtual meeting with six state governors later today, President Biden's account tweets on the administration's multi-trillion dollar infrastructure plan: "The American Rescue Plan has allocated $ 39 billion to address the child care crisis caused by COVID-19 so that parents who need to can return to work. The American Families Plan would ensure access to high-quality, affordable child care beyond the pandemic. Let's pass it."

  • The virtual meeting between Biden and a bipartisan group of state leaders - from Ohio (R), Utah (R), Massachusetts (R), Maine (D), Minnesota (D) and New Mexico (D) - is ostensibly focused on increasing the take-up of COVID-19 vaccines following a drop off in the rate of inoculations.
  • However, the president is almost certain to seek to convince reluctant state leaders of his administration's significant expenditure plans, with Congressional leaders still arguing over how to pay for the investments and the proposed roll-back of Trump-era tax cuts.

NIESR Head Chadha On Gov't Promise To Make Good On BoE QE Losses

MNI talks to National Institute of Economic and Social Research head Jagjit Chadha about the UK government's promise to make good any of the BOE's losses in QE - On MNI Policy MainWire now, for more details please contact

JCPoA Talks In Crucial Stage As Registration Opens For Pres. Candidates

With the fourth round of talks between signatories of the Joint Comprehensive Plan of Action (JCPoA, the Iran nuclear deal) underway in Vienna, the EU's High Representative for Foreign Affairs and Security Policy Josep Borrell stated in a presser on Monday that "There's a window of opportunity that will stay open for a couple of weeks, until the end of the month, but a lot of work is needed, time is limited and I hope that negotiations will enter in a phase of non-stop in Vienna."

  • The shortened timeframe is due to Iran's presidential election, which is due to be held on 18 June.
  • The five-day registration period for individuals to submit their candidacies began earlier today. In 2017, 1,636 individuals sought to run for president, but the decision over who is allowed to run rests with the 12-member Guardian Council, which is strongly influenced by Supreme Leader Ali Khamenei.
  • The expectation among other JCPoA signatories is that once the presidential candidates are declared on 25 May, political and diplomatic focus in Iran will switch to the election. After the election there is no guarantee the incoming administration (incumbent moderate President Hassan Rouhani cannot run again due to term limits) will be willing to negotiate aspects of the JCPoA.
  • As such, if any breakthrough is going to be made, it will have to be made soon to avoid becoming hostage to the election result.
  • State media in Iran is already sowing the seeds of blame for any failure, with Press TV stating that US demands for 500 individuals to be kept under sanctions as part of the deal risks scuppering any progress.


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