US PPI and major banks in focus

EU mid-market update: Major press outlets speculate whether Pres Biden met the high bar at NATO conf with few unfortunate slips; US PPI and major banks in focus; Japan said to have conducted FX rate check yesterday, while BOJ accounts suggest it was intervention.

Notes/observations

- US Pres Biden gave his first solo press conference this year at NATO summit with real-time questions from reporters; Press conf result is seen as “mixed”, as despite “much better second half of the presser”, most outlets highlight how Biden mistakenly referred to VP Harris as "Vice President Trump", but Biden also noted he "would Not have picked VP Harris if she were not qualified to be president"; Worth noting that after US Pres Biden finished speaking and repeated he had no plans to exit the race, at least three more Democratic members of the House of Representatives called on him to do it and drop his candidacy. In total, as of Thursday, about 13 of the 213 Democrats in the House and one of the Senate's 51 Democrats publicly called on Biden to withdraw. Axios says Biden's upcoming interviews and events in Michigan and Nevada could be far more pivotal to his reelection than the press conference.

-US PPI print and first major US banks earnings reports expected to provide traders with additional color on domestic economy state.

- Amid great volatility in Japanese yen and first alleged intervention since early May, press reported that Bank of Japan (BOJ) conducted a rate check related to EUR/JPY on Jul 12th, prepping for potential currency intervention. Note: analyst point out that interventions are most effective during low liquidity conditions in FX markets while Japan markets will be on holiday on Mon, July 15th.

-Ahead of key China’s Third Plenum meeting early next week with focus on reforms, China released a lot of June economic indicators, including Trade Balance, FDI, money supply data

-Sweden’s June inflation print came at lowest annual pace since autumn 2021 and became the latest CPI data to surprise downwards this week. Meanwhile, Final CPI prints for June from France and Spain were both revised slightly higher.

-First European chemical name reported Q2 results; Swiss nylon producer EMS-Chemie cut outlook noting no sign of any growth impulse in global manufacturing.

-According to UK press, Rio Tinto said to be studying mining industry-shaping megadeals after collapse of BHP-Anglo American talks; Potential targets may include Teck Resources.

-Ahead of big Farnborough International Airshow in 2 weeks, Boeing reportedly notified some 737 Max customers in recent weeks that aircraft due for delivery in 2025 and 2026 face further delays of 3-6 months.

- Asia closed mixed with Nikkei 225 underperforming at -2.5%, Hang Seng outperforming +2.6%. EU indices are +0.1-0.8%. US futures -0.1% to +0.1%. Gold -0.4%, DXY -0.1%; Commodity: Brent +0.8%, WTI +1.0%; Crypto: BTC -0.2%, ETH -0.6%.

Asia

- (JP) Bank of Japan (BoJ) accounts data suggests ~¥3.5T (~$22B) of FX intervention on Thurs, July 11th - press.

-(JP) Bank of Japan (BOJ) said to have conducted a rate check related to EUR/JPY on Jul 12th, prepping for currency intervention - Nikkei [**Note: Japan markets will be on holiday on Mon, July 15th].

-Japan Outgoing Top FX Diplomat Kanda: Continues to decline comment on FX intervention - financial press.

-Japan Business Lobby Chair Niinami: Asking BOJ to raise rates at July's meeting.

-(JP) Japan govt reportedly set to cut its forecast for FY24/25 economic growth from 1.3% to around 1.0%; Revised estimates due next week - press.

- (CN) China June YTD new Yuan loans (CNY): 13.27T V 13.39TE (V 11.14T PRIOR).

- (CN) China June M2 money supply Y/Y: 6.2% (new record low) V 6.8%E (V 7.0% PRIOR).

- (CN) China Jun trade balance: $99.1B V $85.3BE; Exports recorded fastest growth since Apr 2023.

- (CN) China Jun trade balance (CNY-DENOMINATED): 703.7B V 586.4B PRIOR.

-(CN) China Jun YTD Foreign Direct Investment (FDI) (CNY-denominated) Y/Y: -29.1% v -28.2% prior (6th straight acceleration in annual drop pace).

- (CN) China Commerce Ministry (MOFCOM) and China's PBOC vow to better support trade; To step up support on cross-border trade and investment [**Note: China to hold Third Plenum from July 15-18th].

- (SG) SINGAPORE Q2 ADVANCE GDP Q/Q: 0.4% V 0.4%E; Y/Y: 2.9% V 2.7%E.

Mid-East

-(IL) Axios' reporter Barak Ravid: Senior Hamas officials realized in the last two weeks that the international pressure on Israel is not increasing as they thought it would and that most of the countries of the world support the cease-fire proposal presented in US Pres Biden's speech and blame Hamas for the continuation of the war.

-(IL) Israel, Egypt reportedly discussing hi-tech surveillance on border as a part of Gaza ceasefire talks; Such deal on system would let Israel pull back troops - press.

Ukraine conflict

-US Pres Biden: I am ready to deal with Putin, Xi, now and three years from now; Prepared to talk to Putin if he calls me.

Europe

- (SE) Sweden Jun CPI M/M: -0.1% V +0.1%E; Y/Y: 2.6% V 2.8%E (lowest annual pace since fall 2021).

- (FR) France Jun final CPI M/M: 0.1% V 0.1%E; Y/Y: 2.2% V 2.1%E.

- (ES) Spain Jun Final CPI M/M: 0.4% v 0.3%e; Y/Y: 3.4% v 3.4%e-(FR) -(FR) French Left parties reportedly struggling to unite to come up with a candidate for PM - press [**Note: earlier, French Pres Macron refused resignation of his PM Attal "for now" after snap elections].

- (EU) Former US Pres Trump meets with Hungary PM Orban at Mar-a-Lago, Florida, post-NATO Summit (Washington DC).

Americas

- (US) US Pres Biden reiterates he has no plans to leave the race noting his job as President is a proof of mental acuity; Notes VP Harris is qualified to be President; Mistakenly refers to VP Harris as "Vice President Trump" at his first solo Press Conference in 2024.

- (US) NYT piece after Biden press conf on Thurs: Reportedly Pres Biden found himself increasingly isolated as a small group of his longtime aides and advisers have become convinced that he will have to make what they see as the painful but inevitable decision to abandon his campaign for re-election.

- (US) Reportedly the gulf is widening between how US Pres Biden's most inner circle and the rest of the Democratic Party view his political viability; Number of White House and campaign aides have begun to discuss how to penetrate that group and compel the president to reconsider - Politico.

- (US) Traders circulating Goldman Sachs note from earlier this week saying GS analysts are in correction mode and modelling a late-summer equity market correction citing, since 1928, July 17th has marked the local top for the month heading into materially lower August.

Energy

- Aussie mining and resources companies report impact to their businesses due to supply chain disruptions after BHP announced overnight that nickel ops in Western Australia to be suspended due to oversupply.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.35% at 521.34, FTSE +0.26% at 8,244.54, DAX +0.30% at 18,595.55, CAC-40 +0.73% at 7,682.83, IBEX-35 +0.38% at 11,212.62, FTSE MIB +0.37% at 34,445.00,  SMI +0.44% at 12,316.05, S&P 500 Futures +0.09%].

Market focal points/key themes: European indices open higher across the board but lost some of the momentum in early trading; FTSE 100 supported in the wake of US inflation data; among sectors leading the way higher are consumer discretionary and energy; lagging sectors include technology and real estate; telecom sector supported following earnings from Ericsson; reportedly Lar Espana receives bid from Hines; reportedly Vivendi looking to list Canal+ on LSE; earnings expected in the upcoming US session include JPMorgan, Wells Fargo, Fastenal, and Citigroup.

Equities

- Consumer discretionary: Adidas [ADS.DE] +1.0% (Asics results), Norwegian Air Shuttle [NAS.NO[ +6.5% (earnings), Ryanair [RYA.IE] -2.0% (analyst action).

- Financials: Ashmore Group [ASHM.UK] -3.0% (trading update), TopDanmark [TOP.DK] +0.5% (earnings; trims outlook).

- Industrials: Aker Solutions [AKSO.NO] +11.0% (earnings; raises outlook), Volkswagen [VOW3.DE] +0.5% (analyst action).

- Materials: EMS-Chemie [EMSN.CH] -6.0% (earnings; outlook cut).

- Telecom: Ericsson [ERICB.SE] +9.0% (earnings).

Speakers

- (US) US Pres Biden: I have taken three significant and intense neurological exams, most recently was in February; I am in good shape; My job as President is proof of mental acuity.

- (JP) Japan Outgoing Top FX Diplomat Kanda: Continues to decline comment on FX intervention; FX moves have been big; 5% in the past month is significant.

- (JP) Japan Business Lobby Chair Niinami: Asking BOJ to raise rates at July's meeting.

-(JP) Japan Economy Min Saito: To discuss measures to deal with jet fuel shortage on Tues (Jul 16th); domestic power supply-demand situation requires vigilance.

Currencies/fixed income

Economic data

- (CN) China June YTD new Yuan loans (CNY): 13.27T V 13.39TE (V 11.14T PRIOR).

- (CN) China June YTD aggregate financing (CNY): 18.1T V V 18.2TE (V 14.8T PRIOR).

- (CN) China June M2 money supply Y/Y: 6.2% (new record low) V 6.8%E (V 7.0% PRIOR).

- (CN) China Jun trade balance: $99.1B V $85.3BE; Exports recorded fastest growth since Apr 2023.

- (CN) China Jun trade balance (CNY-DENOMINATED): 703.7B V 586.4B PRIOR.

-(CN) China Jun YTD Foreign Direct Investment (FDI) (CNY-denominated) Y/Y: -29.1% v -28.2% prior (6th straight acceleration in annual drop pace).

- (MY) Malaysia May Industrial Production Y/Y: 2.4% v 3.6%e.

- (JP) Japan May Final Industrial Production M/M: 3.6% v 2.8% prelim; Y/Y: 1.1% v 0.3% prelim.

- (JP) BOJ Quarterly Opinion Survey: Japanese households expect inflation to rise by average 11.5% one year from now, with median +10.0%.

- (FI) Finland May Current Account: -€113M v -€3.6B prior.

- (SE) Sweden Jun CPI M/m: -0.1% v +0.1%e; Y/Y: 2.6% v 2.8%e.

- (NO) Norway Jun Trade Balance (NOK): 61.7B v 58.4B prior.

- (NO) Norway Q2 House Price Index Q/Q: 1.2% v 1.1% prior.

- (DE) Germany Jun Wholesale Price Index M/M: -0.3% v +0.1% prior; Y/Y: -0.6% v -0.7% prior.

- (FR) France Jun Final CPI M/M: 0.1% v 0.1%e; Y/y: 2.2% v 2.1%e.

- (ES) Spain Jun Final CPI M/M: 0.4% v 0.3%e; Y/Y: 3.4% v 3.4%e.

- (TR) Turkey May Current Account: -$1.2B v -$1.5Be.

- (RU) Russia Narrow Money Supply w/e July 5th (RUB): 18.22T v 18.15T prior.

Fixed income issuance

-(IN) India sells total INR220B in 2031 and 2064 bonds.

-(CN) China MOF sells 3-month, 6-month Bills.

-(CN) China sells 5-Year Sovereign Bonds at Avg Yield: 1.9100% v 1.9943% prior (Jun 11th).

-(JP) Japan sells ¥5.2T in 3-Month Bills; Avg Yield: 0.0132% v 0.0032% prior; bid-to-cover: 3.51x v 3.47x prior.

Looking ahead

- 05:30 (IN) India to sell bonds.

- 05:30 (ZA) South Africa to sell combined ZAR1.0B in I/L Bonds.

- 06:00 (UK) DMO to sell 1-month, 3-month and 6-month bills.

- 07:30 (IS) Iceland to sell Bonds.

- 08:00 (MX) Mexico May Industrial Production M/M: No est v -0.5% prior; Y/Y: 5.9%e v 5.1% prior; Manufacturing Production Y/Y: 3.8%e v 5.3% prior.

- 08:00 (BR) Brazil May IBGE Services Volume M/M: No est v 0.5% prior; Y/Y: No est v 5.6% prior.

- 08:00 (IN) India Jun CPI Y/Y: No est v 4.8% prior.

- 08:00 (IN) India May Industrial Production Y/Y: No est v 5.0% prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:30 (US) Jun PPI Final Demand M/M: No est v -0.2% prior; Y/Y: No est v 2.2% prior.

- 08:30 (US) Jun PPI (ex-food/energy) M/M: No est v 0.0% prior; Y/Y: No est v 2.3% prior.

- 08:30 (US) Jun PPI (ex-food/energy/trade) M/M: No est v 0.0% prior; Y/Y: No est v 3.2% prior.

- 08:30 (CA) Canada May Building Permits M/M: No est v 20.5% prior.

- 09:00 (CA) Canada Jun Existing Home Sales M/M: No est v -1.7% prior.

- 09:00 (RU) Russia May Trade Balance: No est v $10.7B prior; Exports: No est v $33.2B prior; Imports: No est v $22.5B prior.

- 10:00 (US) July Preliminary University of Michigan Confidence: No est v # prior.

- 11:00 (UK) British Prime Minister Keir Starmer to hold talks with officials including Canada Prime Minister Justin Trudeau, Republic of Korea President Yoon Suk Yeol, Turkish President Tayyip Erdogan, Japan's Prime Minister Fumio.

- 12:00 (US) WASDE.

- 13:00 (US) Weekly Baker Hughes Rig Count.

- 15:00 (AR) Argentina Jun National CPI M/M: No est v 4.2% prior; Y/Y: No est v 276.4% prior.