MNI China Daily Summary: Thursday, August 1

MNI: BOE VOTES 5-4 FOR 25 BPS RATE CUT AT AUG MEETING

MNI BRIEF: BOJ To Focus On Continued Positive Wage Setting

MNI BRIEF: Japan Q2 GDP To Rise 0.5% Q/Q; 2.2% Annualised

MNI BRIEF: China Retains Ample Policy Space In H2 – NDRC

MNI BRIEF: Caixin July Manufacturing PMI Falls Below 50

MNI: US Q2 PREL UNIT LABOR COSTS +0.9% VS Q1 +3.8%; Y/Y +0.5%

MNI: US JOBLESS CLAIMS +14K TO 249K IN JUL 27 WK

VDMA Factory Orders Remain Weak in June

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

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Short End Outperforms Ahead Of Fed

US TSYS

Treasuries continue to edge higher from Friday's worst levels, benefiting a little overnight from the post-RBA meeting rise in Aussie bonds. Covid lockdowns in Beijing schools also seen underpinning a modest risk-off bid.

  • The notable moves have been in the short end, where we've seen some rate hike pricing taken off the table in both the US and Europe ahead of key central bank meetings Weds (Fed) and Thurs (BoE). The 2-Yr yield is down 2.8bps at 0.4717%, 5-Yr is down 1.9bps at 1.1573%, 10-Yr is down 0.5bps at 1.5505%, and 30-Yr is up 0.7bps at 1.9645%.
  • It's a very thin slate for scheduled events: no key data, no speakers, and only issuance is $34B 52-week bill auction at 1130ET. NY Fed buys ~$$2.025B in 1-7.5Y TIPS.
  • With so little on today's agenda, attention turns to Wednesday's more impactful events: Treasury refunding announcement and FOMC decision.
  • We published our Fed preview yesterday; by unanimous sell-side consensus, a $15B monthly taper starting mid-month is expected to be announced. But there is interest in any tweak in language on "transitory" inflation, and pushback (or lack thereof) on market rate hike pricing.
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