MIDEAST: Trump's Gaza Comments Could Radically Alter US Middle East Policy
Feb-05 10:07
US President Donald Trump's comments on 4 Feb regarding the Gaza Strip and the US' intention to 'take over' the territory (see 'POLITICAL RISK: Trump Proposes US Long Term Take Over Of Gaza Strip', 0031GMT) - if pursued - will dramatically alter decades-long US policy stances in the region.
- In a meeting with Israeli PM Benjamin Netanyahu at the White House, Trump said that the US should "take over" Gaza with a "long-term ownership position" that could include US troops on the ground, adding "we will do a job with it too. We'll own it". This would upend the US' long-standing support for a two-state solution. Indeed, Trump also said an announcement on the situation in the West Bank would be forthcoming in the next month.
- Asked what proportion of Gazans would be displaced to rebuild, Trump said “all of them”. While Trump's plan has been received with shock in many quarters, it is not the first time he has indicated such intent. In January, Trump said he wanted to "clean out" Gaza, with people being displaced to surrounding countries including Jordan and Egypt.
- Saudi Arabia's foreign ministry said the Kingdom rejects “any infringement on the legitimate rights of the Palestinian people whether through Israeli settlement policies, land annexation or attempts to displace the Palestinian people from their land.” Other Arab nations, as well as Palestinian groups, have decried Trump's announcement.
- It remains to be seen what impact the comments have on discussions on the second phase of a Gaza ceasefire-for-hostages agreement. These talks only got underway on 4 Feb prior to Trump's presser.
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EURIBOR: EURIBOR FIX - 06/01/25
Jan-06 10:03
EURIBOR FIX - EMMI/Bloomberg
- EUR001W 2.8980 -0.0030
- EUR001M 2.8350 0.0430
- EUR003M 2.7570 0.0260
- EUR006M 2.5850 0.0310
- EUR012M 2.4870 0.0390
FOREX: Euro Strengthens Following Stronger Data, Dollar on Back Foot
Jan-06 10:02
- Markets are continuing to pare ECB easing bets following the stronger-than-expected data releases across the Eurozone PMIs and the German inflation print for Hesse. As such, the Euro is rising and is among the best performers in G10.
- EURUSD has gained momentum back above the prior breakout level of 1.0335, briefly taking the pair to an intra-day high of 1.0369. Overall, the trend needle continues to point south, and initial firm resistance is at 1.0414, the 20-day EMA.
- EURJPY is standing out, rising 0.75% at typing amid the notable weakness for the Japanese Yen overnight. We have traded above the Jan 02 high while the focus will be on 165.04, the Nov 15 high and a key short-term resistance.
- The dollar has started the week on the back foot, with higher beta currencies such as GBP, AUD, NZD and CAD all benefitting. This brings the USD index pullback to ~0.9%, following the new two-year high made last week of 109.53.
- There will be particular focus on the Canadian dollar as betting markets shift to 95% probability of imminent PM Trudeau resignation. USDCAD is down 0.5% on the session with pullback seen as technically corrective at this juncture. Initial firm support to watch lies at 1.4320, the 20-day EMA.
- German national-level HICP & CPI inflation is scheduled to be released later today 13:00 GMT. US Final Services PMI and Factory Orders are due for release, and FOMC Member Cook will speak.
EQUITIES: Estoxx call spread
Jan-06 10:01
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