The expansionary Donald Trump is back. He wants to rename the Gulf of Mexico as the Gulf of America, make Canada a U.S. state, and acquire Greenland as a strategic territory for world peace, claiming that the Panama Canal is “run by China.” Trump stated that these issues are critical to American national security. He also said that NATO members should raise defense spending to 5% of GDP. The current guideline is only 2%, and U.S. defense spending is 3.4% of GDP.
Domestically, the 10-year gilt yield is 4.67%, up almost 50 basis points in a month. It’s just shy of the 4.74% hit in mid-2024; prior to that, it’s back to 2007 for anything higher. The 30-year UK yield is 5.24%. CABLE opens at 1.2485, and the 200-day moving average is at 1.2810, leaving plenty of headroom to keep selling that rally.
Marketwise, the S&P was down just over 1%, and oil still seems to be the only gainer, opening at $74.75. Bitcoin fell 0.8% to $95,676.25, and Ether fell 0.9% to $3,333.60. The yield on U.S. 10-year Treasuries declined one basis point to 4.67%, while Germany’s 10-year yield advanced four basis points to 2.48%. Spot gold rose 0.1% to $2,651.40 an ounce, and silver is at $30.05 an ounce.
As for the day ahead, we have Eurozone PPI, consumer confidence, U.S. ADP employment, Fed minutes, consumer credit, and a speech from the Fed’s Christopher Waller.
