MNI China Daily Summary: Thursday, July 4

MNI BRIEF: China Has Four Months To Negotiate EU EV Agreement

RPT-MNI INTERVIEW: ISM Choppiness Not A Clear Signal For Worry

MNI: PBOC Net Drains CNY98 Bln Via OMO Thurs; Rates Unchanged

MNI: PBOC Sets Yuan Parity Lower At 7.1305 Thurs; -0.79% Y/Y

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

Factory Orders Decline as Non-EU Orders Dip

DMP survey increases probability of August cut

MNI: UK JUNE CONSTRUCTION PMI 52.2 (FCST: 54.0); MAY 54.7

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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Light Post-FOMC Pressure

GILTS
Bank Of England (BOE) Market NewsHomepageBond Market NewsBulletMarketsFixed Income Bullets

Gilts move back below 98.00 in the wake of the FOMC decision, but still trade the best part of a big figure above pre-U.S. CPI levels, last -15 at 97.86.

  • Technically, yesterday’s strong rally in futures resulted in a break of resistance at 97.86 and 98.05. This cancels a recent bearish threat and instead highlights a resumption of the bull cycle that started May 29. A continuation higher would signal scope for a climb towards 98.89, the May 16 high and a key resistance. Initial support lies at 97.12, the 20-day EMA.
  • Cash gilt yields are 2.5-3.0bp higher across the curve.
  • SONIA futures and BoE-dated OIS operate around levels flagged in the pre-gilt open bullet.
  • RICS house price balance data was much softer than expected on the back of higher-for-longer interest rate worry, although the data won’t be a market mover for GBP STIRs & gilts.
  • Polling suggested Labour leader Starmer provided a better showing than PM Sunak during last night’s Sky leaders’ debate, while the Labour Party maintains a very wide lead in the polls.
  • Tomorrow’s Bank of England/Ipsos Inflation Attitudes Survey provides the next domestic data point of note.
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Gilts move back below 98.00 in the wake of the FOMC decision, but still trade the best part of a big figure above pre-U.S. CPI levels, last -15 at 97.86.

  • Technically, yesterday’s strong rally in futures resulted in a break of resistance at 97.86 and 98.05. This cancels a recent bearish threat and instead highlights a resumption of the bull cycle that started May 29. A continuation higher would signal scope for a climb towards 98.89, the May 16 high and a key resistance. Initial support lies at 97.12, the 20-day EMA.
  • Cash gilt yields are 2.5-3.0bp higher across the curve.
  • SONIA futures and BoE-dated OIS operate around levels flagged in the pre-gilt open bullet.
  • RICS house price balance data was much softer than expected on the back of higher-for-longer interest rate worry, although the data won’t be a market mover for GBP STIRs & gilts.
  • Polling suggested Labour leader Starmer provided a better showing than PM Sunak during last night’s Sky leaders’ debate, while the Labour Party maintains a very wide lead in the polls.
  • Tomorrow’s Bank of England/Ipsos Inflation Attitudes Survey provides the next domestic data point of note.