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Late Apr'23 5Y Puts

MNI FED WATCH: 25BP Hike Likely Unless Banking Crisis Worsens

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Tighter financial conditions could also allow the Fed to pause.

LATEST INSIGHT

MNI Norges Bank Preview - March 2023: 25bps Base Case, Further Tightening Hints Likely

The Bank are expected to leave door open to more hikes, as inflation backdrop not yet benign

MNI Fed Preview - Mar 2023: Balancing Evolving Risks

The FOMC will hike by 25bp in March, with recent banking sector volatility warranting a lower terminal rate than foreseen a couple of weeks ago.

MNI UK Issuance Deep Dive: April – June 2023 Outlook

We set out our expectations for gilt issuance in FQ1, look at other gilts that could be on offer later in the fiscal year and recap the main measures in the March Budget.

Political Risk

Kirby: In Discussion For Secretaries Yellen/Raimondo To Visit Beijing

White House National Security Council Spokesperson John Kirby has told reporters that the White House is engaged in discussions with Chinese counterparts for Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo to visit Beijing.

  • Kirby: "[President Biden] wants to have another conversation with President Xi, and he'll do that at the most appropriate time, I don't have a call in the schedule to speak to but its important that we keep lines of communication open when tensions are so high."
  • Kirby: "We still want to get Secretary Blinken back to Beijing, that visit was postponed not cancelled [in the wake of the Chinese 'spy balloon' incident in January] and we're still hopeful we can get that back on the calendar."
  • Kirby: "As a matter of fact we're having discussions with the PRC right about potential visit from Secretary Yellen and Secretary Raimondo to talk about economic issues."
  • On the provision of lethal aid from China to Russia, Kirby says: "We'll see what they come out of this meeting talking about. We don't know if there's going to be some sort of arrangement."

NSC Kirby: World Should Not Be Fooled By Russian Attempt To Freeze Conflict

White House National Security Council Spokesperson John Kirby has provided an update on the ongoing visit by Chinese President Xi Jinping to Russia to meet President Vladimir Putin.

  • Kirby repeated much of the sceptism of the past week over a move by China to broker a ceasefire in Ukraine: "China has already issued a 12-point plan for conflict in Ukraine which includes an essential point: Respect for sovereignty and territorial integrity of all countries."
  • Kirby: "We encourage President Xi to advocate for this point which must include the withdrawal of Russian forces from sovereign Ukrainian territory consistent with the UN charter... The entire world would like to see this war end. Especially the Ukrainians."
  • Kirby: "We are concerned that China will reiterate calls for a ceasefire that leaves Russian forces inside Ukraine's sovereign territory. Any ceasefire that does address the removal of Russian forces from Ukraine would essentially ratify Russia's illegal conquests, enabling Russia to entrench its position and restart the war at a more advantageous time for them."
  • Kirby: "The world should not be fooled by any tactical move by Russian, aided by China, to freeze the war on its terms."

OPEC Leaders Warn Of Market Destabilisation If U.S. Passes NOPEC Bill

Reuters reporting comments from Libya's oil minister Mohamed Aoun stating that, "if the US Congress approves 'NOPEC' bill, it will lead to destablisation of oil market."

  • Aoun continued, "OPEC+ seeks stability of oil market by determining crude quantities, not prices."
  • 'NOPEC,' which would allow the US government to take legal action against OPEC+ members for manipulating the oil market, has been introduced into the US Congress numerous times since 2007 without success but recent strain between Washington and Riyadh is seen as increasing the prospect of the bill progressing.
  • Saudi Energy Minister Abdulaziz bin Salman told Energy Intelligence last week: “The Nopec bill does not recognize the importance of holding spare capacity and the consequences of not holding spare capacity on market stability. Nopec would also undermine investments in oil capacity and will cause global supply to fall severely short of future demand.”
  • Bloomberg: "The White House hinted last year, amid surging gasoline and oil prices and OPEC+’s decision to cut output caps by 2 million barrels a day, it might back the bill..."

Confidence Vote Falls Short By Nine Votes

A confidence vote in the government of French Prime Minister Élisabeth Borne has been rejected by the French parliament by a margin of nine votes - far closer than anticipated.

  • Borne's government will remain in place, and the pension reform championed by President Emmanuel Macron and pushed through parliament via a controversial clause will be adopted.
  • The unexpectedly close vote is likely to substantially weaken the position of both Borne and Macron.

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