EMISSIONS: EU Mid-Day Carbon Summary: EUAs/UKAs Fall On TTF Losses

A number of the Chancellors' announcements that were expected to come out in her Mansion House speech tonight have already been published early on the government's website. Amongst these are:

• What the government's news page refers to as "the biggest set of reforms to financial regulation in a decade" in what are to be known as the "Leeds reforms." This includes a removal of red tape and is going to be accompanied by an announcement that Nationwide will ease its lending criteria. More mortgages are to be made available at 4.5 times buyers' income with a lower salary of GBP30,000 (from GBP35,000) or for joint applicants GBP50,000 (down from GBP55,000) which the press release says "will support an additional 10,000 first time buyers".
• Instead of the reform of ISAs, there is to be "an advertising campaign that will highlight the opportunities of investing for consumers who are able to do so." Part of the press release notes that if someone invested GBP2,000 and had investment growth equal to the last 10 years that they would then have GBP9,000 in 20 years time (compared to GBP2,700 in a cash account). It remains to be seen if this will actually change any incentives or lead to any increase in holding equities rather than cash.
• There will be a "streamline" of the Senior Managers and Certification Regime and a reform of the ring-fencing regime.
• This will be accompanied by the BOE's change to regulations this morning that raised the MREL threshold to GBP25-40bln from January 2027.
• There is no mention of pension reforms and increases to auto enrolment (which may still features in the Mansion House speech later).

Wells Fargo earnings:
• 2Q EPS $1.60
• 2Q NET INTEREST INCOME $11.71B, EST. $11.83B
• 2Q INVESTMENT BANKING FEES $696M, EST. $703.1M
• 2Q REV. $20.82B, EST. $20.75B

Presentation highlights:

• Average loans down $258mln Y/Y as declines in commercial real estate and residential mortgage loans were largely offset by higher commercial and industrial loans. Home lending down 5% from Q1 largely due to lower mortgage servicing income from portfolio run-off and sales
• Total average loan yield down 45bps to 5.95% as a result of lower interest rates
• Net gains from trading activities down 12%, driven by lower revenue in equities, partially offset by higher revenue in FX and rates products
• Credit card segment higher by 9% Y/Y on higher loan balances
• Sees 2025 NII "roughly" inline with 2024 at $47.7bln, but the absolute level of rates and the shape of the curve will be among determining factors

• Treasuries are bull flatter on the day, with the front end pinned ahead of the US CPI report for June at 0830ET but the long end gaining as it lags an EGB rally on no obvious drivers.
• Cash yields are unchanged to 2.5bp lower, with declines led by 20s.
• TYU5 sits a touch firmer at 110-25+ (+ 01) on light cumulative volumes of 235k, having remained within yesterday’s range throughout.
• Yesterday touched 110-20 in a further move closer to a key support at 110-17 (61.8% of May 22- Jul 1 bull leg). Further support would then be at 110-10+ (Jun 16 low) whilst resistance is seen at 111-13+ (Jul 10 high).
• Data: CPI June (0830ET), Real avg hourly earnings Jun (0830ET), Empire mfg Jul (0830ET)
• Fedspeak: Bowman (0915ET), Barr (1245ET), Barkin (1300ET), Collins (1445ET), Logan (1945ET) – see STIR bullet.
• Bill issuance: $70B 6W bill auction (1130ET)
• Bank earnings: BNY Mellon, JPM and Wells Fargo have recently reported, with Citigroup still to come (0800ET).
• Trump calendar per Roll Call: Departs White House en route to Pittsburgh (1230ET with open press), Participates in Inaugural Pennsylvania Energy and Innovation Event (1430ET with pre-credentialed media).