BOE: Bailey says that he voted for August cut due to slowing wage growth
Bailey says that he places more emphasis on wage growth: "So I agree with Megan and Clare that I think Alan said as well that we have got the risk on inflation has gone up. I think where I differ a bit is that I think I'm more concerned about the downside risk on the labour market. I think there is more evidence of some weakness in the labour market coming through the pay number. The pay number came in under where we thought it would be based on the May, the May forecast. So I put a bit more emphasis on that downside risk."
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US: Senate Joins House On Recess w/Out Clear Strategy For Avoiding Govt Shutdown
The Senate has joined the House on recess until Sept. 2, without agreeing on a deal to confirm dozens of pending executive branch nominees, or a broader funding strategy to avert a shutdown on October 1.
- Politico notes that before recessing, the Senate passed its first three spending bills. "In an 87-9 vote, the upper chamber passed a two-bill package that would fund the departments of Veterans Affairs and Agriculture, along with military construction and the Food and Drug Administration. A third bill “to fund Congress itself” passed, 81-15."
- Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Hakeem Jeffries (D-NY) wrote a letter to GOP counterparts requesting a “Big Four” meeting this week to discuss "the government funding deadline and the health care crisis you have visited upon the American people".
- Punchbowl notes on the prospect of a shutdown: “The outlook for a government-funding deal is pretty poor right now. A shutdown or CR – or both – is a real possibility heading into the Sept. 30 deadline. Or potentially a hybrid situation where Congress passes some spending bills and then adopts a short-term CR... That would leave Washington lurching along from shutdown threat to shutdown threat throughout 2025-26.”
- According to Polymarket, the implied probability of a government shutdown remains around 40%, with bettors likely considering Democrats unwilling to allow the government to shut down.
Figure 1: Government Shutdown in 2025
Source: Polymarket
EQUITIES: Commerzbank Put Option Trades for more
Adding to the Commerzbank Option trade:
- CBK (18/06/27) 24p, bought for 4.10 in 14.25k.
This option also traded on the 30th July:
- CBK (18/06/27) 24p, bought for 4.09 and 4.15 in 42k, most of the size for 4.15.
EQUITIES: US Program buyer on the Cash Open
- Program Buyer on the Open but with just 1206 names, there were higher program trades during Friday's session.
- Cash SPX has gapped higher to trade near Friday's Opening level of 6287.28, while the SPX saw a gap down from 6339.39 to that 6287.28 level on Friday's Cash Open.
