NATGAS: Israel’s Natgas Exports to Egypt & Jordan Up 13.4% in 2024: Reuters

US President Donald Trump said in a message on Truth Social that he has completed a call with Canadian Prime Minister Justin Trudeau and will speak to him again at 15:00 ET 20:00 GMT.  The confirmation of a second call appears to point towards ongoing tariff negotiations.

• Trump: "Canada doesn’t even allow U.S. Banks to open or do business there. What’s that all about? Many such things, but it’s also a DRUG WAR, and hundreds of thousands of people have died in the U.S. from drugs pouring through the Borders of Mexico and Canada. Just spoke to Justin Trudeau. Will be speaking to him again at 3:00 P.M."
• MNI noted in an earlier bullet that comments from the White House's Economic Council, Kevin Hassett, this morning may have hinted at space within which tariffs can be eased. See: US: Bullish Hassett Lifts CAD and MXN Further Off Lows
• Mexican President Claudia Sheinbaum is expected to hold a televised press conference to provide details on her 'Plan B' response to tariffs at 10:00 ET 15:00 GMT. Given the completed Trump-Trudeau call, Trump and Sheinbaum may have spoken before the presser, providing the first data point today from a directly involved leader.
• Sheinbaum said in a lengthy statement yesterday: “Mexico does not want confrontation. We start from collaboration between neighboring countries,” adding: “I propose to President Trump that we establish a working group with our best public health and security teams.”

Bank of America outline a couple of trades “for those keen to continue the curve steepening theme - perhaps wishing to position for the possibility that the market focuses on the BoE's 2y- and 3y-ahead inflation forecasts next week (which we expect to be lowered).” 

• They maintain their 3s5s7s swap fly position (targeting a move to 10bp, stop set at -21bp).
• Elsewhere, they still “think 5-Year real rates need to be higher than priced to combat inflation but now see that being delivered via lower-than-priced inflation.” As a result, they have switched their “bearish real rate bias into a bearish RPI view in the 5-Year area.”

Senator Chuck Grassley (R-IA), one of the senior-most members of the Senate Republican conference, has "pleaded" with President Donald Trump to exempt potash from tariffs levied on imports from Canada. 

• Grassley said in a message on X: "Biden inflation increase the input cost to farming by 20% incl particularly high prices on fertilizer. So I plead w President Trump to exempt potash from the tariff because family farmers get most of our potash from Canada"
• The message is a sign that Trump's tariff agenda may burn significant political capital with Republicans from agricultural and manufacturing states, likely to bear the brunt of Trump's tariffs and retaliatory actions from targetted countries.  
• Former Senate Republican Leader Mitch McConnell (R-KY), a regular adversary of Trump, said on Sunday: “[Tariffs] will drive the cost of everything up. In other words, it will be paid for by American consumers. Why would you want to get in a fight with your allies over this?”
• Axios notes that Senate Majority Leader John Thune (R-SD) said in August that he is against "across-the-board tariffs” but is open to the selective use of tariffs.
• As a reminder, the power of the executive is limited. For durable legislative change, Trump needs to keep Republican lawmakers onside. Any major revolt from agricultural state Republicans will put the entire GOP agenda at risk.