EM ASIA CREDIT: China Resources Land: Rating affirmed

BoE-dated OIS flat to 1bp more dovish across liquid contracts.

• 21bp priced for August, 28bp through September, 46bp through November and just under 55bp through year-end.
• We continue to look for cuts in August and November at this stage, with risks skewed dovishly.
• Further softening in the labour market presents the most likely dovish catalyst, with fresh developments on that front likely needed to promote the pricing of a more aggressive easing cycle through year-end.
• Note that market pricing hasn’t been able to move meaningfully beyond 55bp of cuts through December in recent weeks.
• SONIA futures little changed to +3.0.
• Early European trade seems to be shaped by tariff worry, with President Trump noting tariff letters will be sent to countries today (12:00 NY).
• Domestically, focus remains on the fragile fiscal situation with last week’s events underscoring the difficulty of enacting meaningful public spending cuts and increasing the odds of tax hikes in the Autumn (a negative for GDP growth).
• Indeed, weekend press reports note that Chancellor Reeves told ministers that tax increases set to come in the Budget will be more challenging than last year’s decisions.
• There are increasing odds that Reeves will have to hike at least one of the big three taxes (national insurance, income tax & VAT).
• Monthly economic activity data (Friday) headlines this week’s local data calendar, while BoEspeak will come via Breeden on Thursday.

Although a serially volatile release, Norwegian manufacturing industrial production has broadly consolidated the rise since October 2024. However, petroleum-related industries remain the clear outperformer since 2022. Positive momentum through 2025 has come despite rates being held at 4.50% until June 19. Guidance that Norges Bank is willing to cut up to two more times this year should provide further support to the mainland industrial economy. However, inflation will (as always) dictate the scope for further easing, keeping main domestic focus on Thursday’s June CPI report. 

• 3m/3m manufacturing IP growth was 1.7% in May, up from 2.3% in April and 1.8% in March. While IP growth has shown little correlation with the manufacturing PMI, Statistics Norway’s industrial confidence metric has been a better coincident indicator. The Q2 Industry Survey is due on July 24.
• Petroleum-related manufacturing production rose 2.4% 3m/3m (vs 6.3% in April, 0.7% in March), while non-petroleum related production rose 0.9% (vs 2,7% in April, -0.5% in March).
• On a sequential basis, we note that durable goods production has fallen for three consecutive months. Relatively resilient retail sales momentum suggests there could be some upward core good inflationary pressure in the pipeline as a result.  

• A positive start for the Dollar, the Currency is in the green against all the majors heading into the Tariff deadline day.
• Scott Bessent said over the Weekend that Countries without a deal will have a 3 Weeks extension Option to Negotiate.
• The biggest early losers withing G10s are the Kiwi and the Aussie, down 0.84% and 0.81% respectively.
• NZDUSD is eyeing the immediate support at 0.6005, this is followed by 0.5988.
• AUDUSD sees the next support at 0.6485.
• Despite the beat in the Sweden CPI coming above Consensus, the SEK is still down 0.10% at typing against the Greenback.