MNI China Daily Summary: Wednesday, July 10

MNI BRIEF: China To Investigate EU Trade Actions

MNI BRIEF: China June CPI Hits Three Month Low

MNI: PBOC Conducts CNY2 Bln Via OMO Weds; Liquidity Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS WEDS

MNI: PBOC Sets Yuan Parity Higher At 7.1342 Weds; -0.53% Y/Y

MNI JAPAN MAY CORE MACHINE ORDERS -3.2% M/M; APRIL -2.9%

EZ/UK T-Bill Calendar: 1/3/6-Month UKTB Auction on Friday

EZ/UK Bond Supply Calendar: Italy, UK Auction on Thursday

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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Hold Modest Bid After Weakest Retail Sales Since March 2023

US TSYS
  • Still bid, Treasury futures are drifting near the lower end of a narrow session range Thursday (TYH4 +4.5 at 110-05 vs. 110-00.5 low, yield -.0117 at 4.2437). No significant technical breakout despite an initial gap bid after this morning's deluge of economic data.
  • Cash Tsys mirrored similar bull flattening moves in EGBs while off highs following wait and see tones from ECB Lagarde wanting to avoid any "hasty" decisions to cut rates with more evidence of inflation decline needed.
  • Treasury futures gap higher, retrace half the move after lower than expected Retail Sales MoM (-0.8% vs. -0.2% st, 0.6% prior). The core categories also started the year on a negative note, inc contrast to relative strength at the end of 2023: ex-autos -0.6% (+0.2% survey, +0.4% prior), ex-auto/gas -0.5% (+0.2% survey, +0.6% prior), and for the key Control Group which is a GDP input, -0.4% (+0.2%, +0.8% prior). Overall the contractions pointed to the weakest report since March 2023.
  • Initial Jobless Claims less than expected, however: 212k vs. 220 est, while Continuing Claims rise 1.895M vs. 1.880M est.
  • TYH4 breached Initial technical resistance at 110-16 (low Feb 9) briefly before settling in around 110-06 +/- 1-2 tics. little react to the rest of the data: Industrial Production/Capacity Utilization, Business Inventories and NAHB Housing Market Index. Total Net TIC Flows wraps things up at 1600ET.
  • Look ahead: Friday data calendar includes PPI, House Starts/Build Permits, UoM Inflation
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