MNI China Daily Summary: Tuesday, July 9

CORRECTED-MNI: China H2 Steel Outlook Subdued

MNI BRIEF: Gradual, but Decisive ECB Cuts Needed –Giorgetti

MNI BOK WATCH: Slowing Inflation Puts Q4 Cut In Sight

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

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

Weak May Releases Raise Further Recovery Into Question

EZ/UK T-Bill Calendar: 12-Month BOT Auction On Wednesday

US NFIB JUN SMALL BUSINESS INDEX 91.5

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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Market Roundup: 10s Test Support

US TSY FUTURES
  • Front month Treasury futures continued to extend lows as markets focused on uptick in March inflation following core PCE Q1 advance of 4.94% annualized for the core PCE deflator (cons 4.7%) implies a March reading bouncing back to 0.50% M/M (current consensus 0.3), from 0.30% in Feb after 0.52% in Jan.
  • Jun'23 10Y futures dipped below 20-day EMA of 115-00.5 to 114-31.5 low recently, drawing modest buying on way back to 115-02.5 (-15). Continued selling puts focus on next levels of support at 114-18.5 50-day EMA while Key support has been defined at 113-30+, the Apr 19 low. A break of this support would reinstate the recent bearish theme.
  • Short end under pressure, post data, curves bear flattening (2s10s -4.259 at -54.707). As a result of re-acceleration of March inflation, implied rate hikes in the near term have firmed, May at 22.0 while Jun cumulative climbs to 28.3 at 5.112.
  • Tighter policy projections for year end continue to recede from Tuesday highs: November cumulative currently -12.8bp (-31.1bp Tue) at 4.700, Dec'23 cumulative -35bp (-52.1bp Tue) at 4.479. Meanwhile, Jan'24 cumulative at -57.9bp vs. a full three 25bp cuts late Tuesday.
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