HYBRIDS: CityCon Hybrids: Questions on the investor call

Of Note:

EURUSD 1.73bn at 1.1700.

USDJPY ~1bn at 146.60.

EURUSD 1.68bn at 1.1700 (wed).

EURUSD 2.16bn at 1.1770 (fri).

• EURUSD: 1.1700 (1.73bn), 1.1725 (343mln), 1.1775 (435mln), 1.1790 (230mln), 1.1810 (710mln).
• USDJPY: 146.60 (949mln).
• AUDUSD: 0.6545 (399mln).
• NZDUSD: 0.6025 (274mln).

ING write “whilst we see room for longer-dated EUR rates to drift higher upon the signing of a trade deal, the initial market reaction may be limited. The 5y5y real rate shows that markets have remained positioned for an improved long-term economic outlook ever since the German spending announcements. Trump’s trade tantrum thereafter did little to move that pricing. A trade deal should therefore not necessarily warrant an immediate repricing of the back end of the curve”.

• “The transition towards higher rates on the back of the EU spending ambitions will take time, also because investors may remain sceptical about the form and pace of implementation. In any case, the spending plans should reduce the chance of returning to a world of secular stagnation, one in which inflation and policy rates are forced close to zero. So even though we don’t pencil in stellar growth numbers on the back of the fiscal expansion, we do think the 10-Year swap rate can continue to drift higher”.
• “The added bond supply should also push up rates from the back end, a theme we have seen develop in many markets of late. Whilst Germany is in a much better fiscal position, we can expect Bunds yields to feel increased upward pressure in the coming years, especially versus swaps”.

(MNI) London -  Australian PM Anthony Albanese will visit China from 12-18 July. Earlier, the PM's office released a statement confirming Albanese would "hold the Australia–China Annual Leaders' Meeting with Premier Li in Beijing. The Prime Minister will also meet President Xi Jinping and Chairman Zhao Leji of the National People’s Congress." During the visit, Albanese and Chinese leaders will attend the Australia–China CEO Roundtable, while Albanese will also visit Shanghai and Chengdu. 

• This visit will be Albanese's second to China since taking office, reversing the trend of his conservative Liberal party predecessors, who eschewed closer relations with Beijing.
• Albanese: "China remains Australia's largest trading partner, accounting for almost one third of our total trade, and will remain so for the foreseeable future. Trade is now flowing freely, to the benefit of both countries and to people and businesses on both sides. We will continue to patiently and deliberately work towards a stable relationship with China, with dialogue at its core. I will raise issues that are important to Australians and the region including my Government’s enduring commitment to pursuing Australia’s national interest. My Government will continue to cooperate with China where we can, disagree where we must, and engage in our national interest."
• The Chinese Foreign Ministry says China "hopes through this visit [the two sides] will strengthen communication, [and] expand practical cooperation."
• Reuters reports "Albanese's trip comes as China,[...] suggested a review of the 10-year-old free trade agreement between the two countries to boost ties in agriculture and mining, and explore growth areas in new technologies."