US: Fed Plans To Raise Bank Oversight Thresholds (RTRS)

• The July Personal Income and Outlays report released at 0830ET today is expected to show a cooling in nominal personal spending (0.1% after 0.3% M/M) and one that is amplified in real terms (0.0% after 0.4% M/M).
• July retail sales saw the control group slump -0.44% M/M (cons 0.3) after 0.4% M/M, although it was on a sharp pullback in online sales possibly related to different timing of Amazon Prime Day.
• On prices, we see a median unrounded analyst estimate of 0.22% M/M for core PCE inflation (in a wide range of 0.12-0.25% M/M) after 0.13% M/M in June in what was a rare month below a pace consistent with the 2% inflation target.
• That would see the Y/Y marginally softer at 3.26% after 3.29% in July (before any revisions which could be slightly positive), with risk of rounding below the 3.3% seen for consensus.
• With portfolio management fees expected to add sizeable upside this month, some estimates for market-cased core PCE look softer at around 0.12-0.13% M/M after 0.18% M/M in June. Market-based core PCE inflation at 3.04% Y/Y in June is running softer than the 3.29% for the more traditional core.  
  • Morgan Stanley: "Alternate measures of PCE inflation look softer: Market-based core PCE, which excludes portfolio management and other imputed categories, tracks at 0.13% m/m. Trimmed mean PCE is expected at 0.18% m/ m. Research from the Dallas Fed suggests that trimmed mean PCE is most informative about the underlying inflation trend when the distribution of price changes is negatively skewed. Skewness was in positive territory since late 2025, but it moved into negative territory in June and is expected to remain negative in July."
  • TD Securities: "More importantly, we expect the market-based core PCE to stay contained at 0.13% m/m."
  • Goldman Sachs: "We estimate that market-based core PCE rose 0.12% in July."
• The second release of Q2 national accounts data and preliminary durable goods for July are also released at 0830ET. See more on GDP here: https://mni.marketnews.com/4iuyucO 

• MNI: UK AUG CBI RETAIL SALES REPORTED BALANCE -48 (-26 JUL)
• UK SEP CBI RETAIL SALES EXPECTED BALANCE -22 (-26 AUG)

The EUR 10s30s curve remains comfortably within the range seen since mid-July, with the initial technical parameters of note located at 5.3bp and 13.2bp, the closing low and high seen in that window.

• While much of the focus from a flow perspective will once again centre on trades linked to the Dutch pension fund transition, spillover from the U.S. curve presents a key cross-market driver.
• Bank of America note that “the extent to which U.S. policy makers can rein in term premium via Treasury supply/buyback actions or the Fed re-establishing credibility will be a key determinant for European rates.”
• They highlight av particular steepening risk on the EUR 10s30s curve owing to “~5bp excessive flatness on a global PCA basis and the potential pre-positioning for the seasonal increase in EGB supply in September”.