EXECUTIVE SUMMARY:
- HARRIS OVERTAKES BIDEN IN DEMOCRATIC NOMINATION BETTING ODDS
- BIDEN VOWS TO STAY IN 2024 RACE EVEN AS GAFFES THREATEN CAMPAIGN
- BOJ RATE-CHECKING EURO, MAY INTERVENE
- CHINA H1 EXPORTS UP 3.6%, SURPLUS TOTALS USD435 BILLION
MNI (LONDON) - Figure 1: Political betting market implied probabilities of winning Democratic nomination, %
Source: electionbettingodds.com
NEWS
US (MNI): Harris Overtakes Biden Again in Dem Nom Betting After Pres' Gaffes
Vice President Kamala Harris has once again overtaken President Joe Biden in political betting markets with regards to who will be the Democratic party's presidential nominee come November. Earlier in the morning we noted the impact of Biden's latest verbal gaffes on the broader presidential betting markets. The latest figures from Election Betting Odds, which collates data from Predictit, Polymarket, Smarkets and Betfair, gives Harris a 43.3% implied probability of becoming the Democratic party nominee, up 7.3% to 24 hours ago.
US (BBG): Biden Vows to Stay in 2024 Race Even as Gaffes Threaten Campaign
President Joe Biden vowed he would remain in the 2024 presidential race, but two critical mistakes in the span of two hours deepened concerns about his mental acuity that threaten his campaign. The president drew gasps - and instant mockery online - when he mistakenly introduced Zelenskiy as Russian President Vladimir Putin at an event in the late afternoon. Then, at the opening of the press conference, he fumbled a question about Vice President Kamala Harris by saying he “wouldn’t have picked Vice President Trump to be vice president” if he did not have confidence in her.
US (BBG): Trump Asks to Toss Hush Money Verdict Over Immunity Ruling
Donald Trump asked a New York judge to toss out his hush money conviction because of the US Supreme Court ruling that presidents have at least some immunity from criminal charges, setting up a fresh fight with Manhattan prosecutors as his campaign to take back the White House heats up. Trump’s guilty verdict on 34 counts of falsifying business records was tainted by testimony and other evidence that shouldn’t have been allowed at trial under the new standard set by the high court’s landmark decision stemming from Trump’s election fraud case, according to a filing that was provided by Trump’s lawyer Todd Blanche Thursday.
US/HUNGARY (BBG): Orban Meets Trump After Riling Allies With Moscow, China Visits
Hungarian Prime Minister Viktor Orban traveled to Florida to meet Donald Trump in the latest stop on his self-styled “peace mission” on Ukraine that has angered Western allies. Orban posted a photo with the Republican nominee and former US president at his Mar-a-Lago resort, showing the pair giving a thumbs up, according to the Hungarian leader’s post on social media platform X. Orban posted that “he’s going to solve it” presumably in reference to Trump’s ability to end Russia’s war in Ukraine. No further details were immediately available.
JAPAN (MNI): BOJ Rate-Checking Euro, May Intervene
Bank of Japan officials are “rate-checking” against the euro in FX markets, meaning the BOJ stands ready to conduct forex interventions, the Nikkei reported. The BOJ is known for “rate-checking” before intervening, with the Ministry of Finance acting as final decision maker. Japanese authorities conducted yen-buying interventions against the U.S. dollar early on Friday, local media reported.
JAPAN (BBG): Japan Likely Spent $22 Billion on Yen Intervention Overnight
Japan likely stepped into currency markets to prop up yen on Thursday, according to a Bloomberg analysis of central bank accounts. Scale of intervention was probably around ¥3.5 trillion ($22 billion), based on a comparison of Bank of Japan accounts and money broker forecasts. BOJ forecast its current account will probably fall ¥3.2 trillion due to government fiscal factors on next business day of Tuesday.
FRANCE (MNI): Attal Seeks Renaissance Presidency, Would Be Unable to Continue as PM
Prime Minister Gabriel Attal has confirmed that he will seek the presidency of the centrist Rennaisance party group in the National Assembly, a move that would be incompatible with his continuation in office as PM. The Renaissance group holds its internal vote for the National Assembly presidency tomorrow (13 July). Renaissance deputy Sylvain Maillard, former group president, has indicated that Attal is likely to be the only candidate, with neither Interior Minsiter Gerald Darmanin or former PM Elisabeth Borne seeking the position.
FRANCE (BBG): Macron Tries to Ease Concern at NATO Over French Turmoil
President Emmanuel Macron sought to convince fellow NATO leaders in Washington this week that the political turmoil in France wouldn’t affect his ability to support the military alliance’s goals, particularly when it comes to Ukraine. In conversations with other leaders at NATO’s annual summit, Macron tried to allay worries about the snap election less than a week ago that has left France without a clear path to form a stable government, according to an official familiar with the talks.
UK/ISRAEL (Telegraph): Britain Could Recognise Palestine Before US or Israel - Starmer
The UK could recognise Palestine as an independent state even if the United States or Israel does not, Sir Keir Starmer has said. Speaking at a press conference following the end of this week’s Nato summit in Washington, the Prime Minister reiterated his position that recognising Palestine needed to be “part of the process” of securing peace in the region. Asked whether he would be willing to act on recognising Palestine before the United States or Israel, he said: “So far as our policy is concerned, I’ll determine our policy, not follow anyone else.”
EU (MNI): EC Mulls Draghi Report Release Date as Vote on Der Leyen Looms
The European Commission is pondering the best time to release the long-awaited report which its President Ursula von der Leyen commissioned from former ECB President and Italian Premier Mario Draghi into Europe's failing global competitiveness. While the report has been printed and awaiting publication for some time already, Commission nervousness over the outcome of the July 18 secret ballot of MEPs on whether to grant von der Leyen a second five-year term is holding back its release.
CHINA (MNI): China Steel Export Growth Slows In June
MNI (Beijing) China’s steel exports slowed slightly in June to 8.745 million tonnes, reducing year-to-date growth to 24.0% in H1, from 24.7% in May, according to customs data on Friday. Steel exports are expected to slow further in H2 amidst anti-China dumping probes and discouragement from the central government, local analysts recently told MNI. China’s year-to-date copper ore and concentrate imports quickened to 3.7% growth in June, versus 2.7% in May, while in-bound iron ore shipments slowed to 6.2%, from May’s 7.0%.
DATA
SPAIN DATA (MNI): Services Still Sticky as Spain HICP Revised a Tenth Higher
- SPAIN JUN HICP +0.4% M/M, +3.6% Y/Y
Spanish June Y/Y and M/M HICP was revised a tenth higher on a rounded basis, to 3.6% Y/Y and 0.4% M/M. HICP excluding energy and unprocessed foods remained sticky at 3.2% Y/Y in June, with services HICP ticking a tenth higher to 4.0% Y/Y (vs 3.9% prior). The recreation and culture component rose 3.8% Y/Y (vs 3.7% prior), in line with the brief commentary available in the flash release. This appears to be somewhat driven by the volatile package holidays component though (10.0% Y/Y vs 8.5% prior, 12.5% M/M).
FRANCE JUN HICP +0.2% M/M, +2.5% Y/Y (MNI)
FRANCE JUN CPI +0.1% M/M, +2.2% Y/Y (MNI)
SWEDEN DATA (MNI): Lower-Than-Expected June Inflation Strengthens Case for August Cut Swedish
- SWEDEN JUN CPIF +1.3% Y/Y
June CPIF ex-energy inflation was lower than expected at 2.3% Y/Y (vs 2.5% expected by consensus and the Riksbank's June MPR, 3.0% prior). The monthly rate was -0.1% (vs 0.1% cons, 0.8% prior). In isolation, this makes an August Riksbank cut (which is already the base case amongst markets and the Riksbank's June MPR policy path) all the more likely. A first glance at the details shows a moderation in recreation and culture (-0.2% Y/Y vs 1.8% prior) and restaurants and hotels (3.1% Y/Y vs 4.9% prior; -1.4% M/M). This dynamic was expected, with a portion of May's services price acceleration being reversed in June (as one-off impacts from Taylor Swift concerts and Eurovision drop out of the comparison).
CHINA DATA (MNI): China H1 Exports Up 3.6%, Surplus USD435 Billion
- CHINA JUN TRADE SURPLUS +$99.05 BLN VS MAY +$82.62 BLN
- CHINA JUN EXPORTS +8.6% Y/Y VS MEDIAN +8.0% Y/Y
- CHINA JUN IMPORTS -2.3% Y/Y VS MEDIAN +2.5% Y/Y
- CHINA H1 EXPORTS +6.9% Y/Y IN YUAN TERM
- CHINA H1 IMPORTS +5.2% Y/Y IN YUAN TERM
MNI (Beijing) China's exports rose 8.6% y/y in June, beating the 8.0% market consensus and accelerating from May’s 7.6%, with H1 expansion totalling 3.6%, data released by Customs on Friday showed. China’s foreign trade grew 7.4% in Q2, 2.5 and 5.7 pp higher than Q1 and Q4 respectively, showing the consolidation of trade momentum, Customs said. Imports grew by 2.3% y/y, missing the 2.5% consensus, versus May’s 1.8%. Imports increased 2.0% y/y in H1, slowing from 2.9% over the Jan-May period. China’s H1 trade surplus hit USD434.99 billion, with June contributing USD99.1 billion.
CHINA JAN-JUNE AGGREGATE FINANCING CNY18.1T; EST. CNY18.202T (BBG)
CHINA JAN-JUNE INBOUND FDI IN YUAN TERMS FALLS 29.1% Y/Y (BBG)
CHINA JUNE M2 MONEY SUPPLY RISES 6.2% Y/Y; EST. 6.8% (BBG)
CHINA JUNE M1 MONEY SUPPLY FALLS 5% Y/Y (BBG)
CHINA JUNE M0 MONEY SUPPLY RISES 11.7% Y/Y (BBG)
JAPAN DATA (MNI): Household 5-Yr Inflation at 5% on Higher Prices - BOJ
Japanese households' median inflation forecast five years ahead stood at 5%, unchanged from three months ago, but the number of households who expect price to rise to 82.0% from 80.6%, the BOJ's latest quarterly consumer survey showed. The data, a key indicator for BOJ officials, showed households’ median inflation view a year ahead stood at 10%, up from 5% three months ago, as higher real prices push expectaions higher. The survey results are increasing pressure on policymakers to raise interest rates further, but the BOJ remains cautious as the underlying inflation trend hasn’t yet reached 2%.
RATINGS: Scope Updates on Greece & Italy Due After Hours
Potential rating reviews of note scheduled for after hours on Friday include:
- Fitch on the European Financial Stability Facility (EFSF) (current rating: AA-), the European Stability Mechanism (ESM) (current rating: AAA; Outlook Stable) and Latvia (current rating: A-; Outlook Positive)
- Morningstar DBRS on Austria (current rating: AAA, Stable Trend) & Sweden (current rating: AAA, Stable Trend)
- Scope Ratings on Greece (current rating: BBB-; Outlook Stable) & Italy (current rating: BBB+; Outlook Stable)
FOREX: JPY Rate Checks Keep Markets Volatile, But EUR/JPY Recovers Well
- After yesterday's suspected official intervention in the JPY, markets were volatile again overnight, with supposed rate checks from the BoJ in EUR/JPY keeping markets on edge. The cross printed a new pullback low of 171.52 on the rate check, however prices have recovered well across Friday morning trade.
- USD/JPY's slide yesterday exposed key support in the pair at the 50-dma of 157.81 - a level pierced, but not convincingly broken yet this week. A particularly USD negative reaction to today's data releases will further raise concerns that the authorities could sell again into an already soft market.
- Antipodean currencies are outperforming, with AUD and NZD firmer against all others. A more solid equity backdrop is supporting high beta currencies, with core Europe cash markets and US futures all trading in positive territory ahead of the key earnings releases later today - Citigroup, JPMorgan, Wells Fargo and BNY Mellon are all set to report ahead of the open today.
- Yesterday's softer-than-expected CPI print will be weighing on market's minds ahead of the PPI release later today, after which markets will have a much better idea of shape of PCE headed into the next Fed meeting at the end of July. Fed rates pricing continues to eye the September meeting as the most likely turning point for interest rates.
EGBS: Bund Futures Softer Alongside Wider Core FI; Peripherals Tighten
Bund futures are -49 ticks at 131.57 as global core FI unwinds some of yesterday’s post US CPI rally.
- European desks have faded the modest overnight uptick in EGB futures this morning, with small upward revisions to French and Spanish June HICP prints and an uptick in Brent crude futures weighing.
- The German cash curve has extended yesterday’s steepening a little, with 2s10s +1.6bp at -31.6bp.
- European equity futures are 0.2% higher today, helping 10-year peripheral spreads to Bunds tighten modestly.
- US PPI headlines today’s broader macro calendar at 1330BST.
- The ECB is in its pre-meeting quiet period, meaning any scheduled Governing Council appearances should not touch on monetary policy matters.
- However, we note that any interviews conducted before the quiet period may still be published.
GILTS: Under Pressure as Oil Ticks Higher & Peers Soften
Gilts weaken as an uptick in crude oil futures adds to pressure from modest upward revisions to final French & Spanish CPI data and yesterday’s soft 30-Year U.S. Tsy auction. Local headline flow has been light.
- That leaves futures -66 at 97.85. Initial support at yesterday’s low (97.63).
- Cash gilt yields are 5-7bp higher across the curve, 10s under the most pressure.
- GBP STIRs see some hawkish adjustments, with SONIA futures flat to -7.0, while BoE-dated OIS shows 12.5bp (50/50 odds) of an Aug cut and ~47.5bp of easing through Dec.
- U.S. inflation data will likely dominate into the weekend, with PPI and UoM readings due. The former will allow analysts to fine tune their PCE projections following yesterday’s soft CPI.
- Further out, Wednesday’s UK CPI release provides the next point of note on the domestic data calendar.
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Aug-24 | 5.073 | -12.7 |
| Sep-24 | 4.989 | -21.1 |
| Nov-24 | 4.825 | -37.5 |
| Dec-24 | 4.723 | -47.7 |
| Feb-25 | 4.574 | -62.6 |
| Mar-25 | 4.472 | -72.8 |
| May-25 | 4.344 | -85.6 |
| Jun-25 | 4.248 | -95.2 |
Source: MNI - Market News/Bloomberg. 2025 meeting dates are estimated.
EQUTIES: Trend Conditions in E-Mini S&P Remain Bullish Despite Thursday's Dip
A bull cycle in Eurostoxx 50 futures remains intact. Attention is on resistance at 5039.84, 61.8% of the May 16 - Jun 14 sell-off. It was pierced last week, a clear break of it would be a positive development and suggest scope for an extension of the bull cycle that started Jun 14. This would open 5082.32, the 76.4% retracement. A stronger reversal would instead expose 4846.00, the Apr 19 low and a key support. The trend condition in S&P E-Minis is bullish and the contract traded to a fresh trend high once again Thursday. The continuation higher confirms a resumption of the uptrend and maintains the bullish sequence of higher highs and higher lows. Moving average studies are in a clear bull-mode set-up too and this continues to highlight positive market sentiment. Sights are on the 5713.31, a Fibonacci projection. Firm support is at 5559.64, the 20-day EMA.
- Japan's NIKKEI closed lower by 1033.34 pts or -2.45% at 41190.68 and the TOPIX ended 34.61 pts lower or -1.18% at 2894.56.
- Elsewhere, in China the SHANGHAI closed higher by 0.908 pts or +0.03% at 2971.295 and the HANG SENG ended 461.05 pts higher or +2.59% at 18293.38.
- Across Europe, Germany's DAX trades higher by 52.99 pts or +0.29% at 18587.17, FTSE 100 higher by 29.64 pts or +0.36% at 8253.02, CAC 40 up 61.25 pts or +0.8% at 7689.46 and Euro Stoxx 50 up 25.47 pts or +0.51% at 5001.53.
- Dow Jones mini up 43 pts or +0.11% at 40132, S&P 500 mini up 4.25 pts or +0.08% at 5644, NASDAQ mini down 10 pts or -0.05% at 20432.75.
Time: 09:55 BST
COMMODITIES: WTI Futures Extend Recovery From Wednesday's Low
WTI futures have recovered from Wednesday’s low and the recent bear leg appears to have been a correction. Recent cycle highs reinforced bullish conditions, signalling scope for a continuation higher near-term. Moving average studies are in a bull-mode set-up too, highlighting a rising trend. Sights are on $85.27, the Apr 12 high and a bull trigger. Initial firm support to watch is $79.91, the 50-day EMA. Gold remains constructive and Thursday's rally reinforces short-term bullish conditions. Recent gains have resulted in a breach of $2387.8, the Jun 7 high. This undermines a recent bearish theme and a clear break represents a bullish development that opens the key resistance at $2450.1, May 20 high. Initial support to watch lies at the 50-day EMA, at 2332.8. A clear break of this average would alter the picture and expose $2277.4, May 3 low.
- WTI Crude up $0.86 or +1.04% at $83.54
- Natural Gas up $0.01 or +0.4% at $2.281
- Gold spot down $7.91 or -0.33% at $2407.04
- Copper up $2.1 or +0.47% at $452.95
- Silver down $0.59 or -1.88% at $30.8655
- Platinum down $10.01 or -0.99% at $997.3
Time: 09:55 BST
| Date | GMT/Local | Impact | Country | Event |
| 12/07/2024 | 1230/0830 | *** |  US | PPI |
| 12/07/2024 | 1230/0830 | * |  CA | Building Permits |
| 12/07/2024 | 1300/0900 | * | CA | CREA Existing Home Sales |
| 12/07/2024 | 1400/1000 | ** | US | U. Mich. Survey of Consumers |
| 12/07/2024 | 1600/1200 | *** | US | USDA Crop Estimates - WASDE |
| 12/07/2024 | 1700/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |