FREELAND: CANADA WON'T ESCALATE OR BACK DOWN ON US TRADE FIGHT

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI BRIEF: China Nov M1 Decline Narrows, M2 Slows

EZ/UK T-Bill Calendar: 8/13/28/50-Week BTF Auction on Monday

EZ/UK Bond Supply Calendar: 4.125% Jul-29 Gilt Due on Tuesday

MNI: CANADA OCT WHOLESALE SALES +3.3%; EX-AUTOS +0.5%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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CREDIT UPDATE
  • Rates have gone bid on Powell's dovish comments that included "we do not seek or welcome further cooling in labor market condition" and "the time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."
  • Pricing in Fed futures is little changed; 103bps over the 3 remaining meetings this year (Sept, Nov and Dec) vs. 96bps pre-Powell. Bunds are on track to end -2-3bps today and -5 on the week while UST's are -7 today and -10 on the week. 2s10s steepening +4 there today.
  • €IG cash has moved a tad tighter since midday and if so would leave it 1-2 tighter on the week. No single name vol today outside the HEIBOS in RE continuing a move in (both the snr's in IG and perps in HY). There was some pressure (-0.5pts) in Thames Class A bonds (now in HY) - across both € and £.
  • €IG equities finish +0.9% (SXXP +0.4%, SPX +1%) led by RE (+1.7%), consumer cyclicals (+1.2%) and materials (+1%). Tech is actually lagging in our basket despite the rates move and similar story in US indices where it is a mid-pack performer. Single name movers include WBD (+5%), Harley Davidson (+5%), VFC (+4%) and PVH (+4%). No sell-offs to flag. iTraxx is -1.5/-7 and will end the week -2/-9. $IG is tad tighter adding to the -0.5bp move in WTD.
  • Reminder UK holiday on Monday, Gilts closed, bunds still open as is € credit. We are away but our macro and EM chats will be online.
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