EMISSIONS: Finland, Norway Strengthen Cross-Border CO2 Storage Cooperation

Bloomberg consensus for ISM Services (1000ET) eyes a small increase to 51.5 from 50.8 in a second monthly improvement after the 49.9 in May was its lowest since Jun 2024, with prices paid looking to remain elevated.

• Activity: The average z-score (5-year lookback) of regional Fed current activity indices rose for a 3rd consecutive month, and despite remaining negative is consistent with an ISM services reading between 50 and 55.
• July saw improvement across four of five major regional indices (Dallas, Philadelphia, New York, Richmond - the exception was Kansas City), though Dallas's was the only above-average reading.
• The S&P Global US services PMI was surprisingly firm in the July flash, rising from 52.9 to 55.2 for its highest since Dec, but it has seen some significant differences to ISM Services before. As of June, ISM services was 2.1pts lower than the S&P Global PMI although June 2024 saw ISM services undershoot by a huge 6.1pts.
• Prices: The Prices Paid component is seen edging slightly lower to 66.5 in July from 67.5 in June. Regional Fed surveys have been mixed on the price front, with the average ticking up slightly from June for a 2nd consecutive month. This was corroborated by the flash July S&P Global Services PMI which noted "Services price inflation accelerated to register the second-steepest increase since April 2023" (to be confirmed with the final release pre-ISM Services).
• Overall we wouldn't be surprised to see a steady/higher ISM Prices figure vs the expected decline, though there doesn't appear to have been large movement either way.

• Canada June trade balance widened to -5.9B after -CAD5.5B in May .  
• Exports rose for the second straight month driven by energy +0.9% MOM in June following +2.0% in May. Imports +1.4% MOM, first increase in four months due to a one-time high value shipment of industrial machinery and equipment.
• Trade surplus with the U.S. widened to +CAD3.9B in June from +CAD3.6B in May. Excluding the U.S., trade deficit widened to -CAD9.8B in June from -CAD9.1B in May.
• Q2 exports -12.8% QOQ while imports -3.9%. Q2 exports -5.4% YOY.
• May trade deficit revised to -CAD5.5B from -CAD5.9B.

Pres Trump on CNBC refers to previously-mentioned Kevins - NEC director Hassett and ex-Fed Gov Warsh - as candidates to succeed Jerome Powell as Fed Chair, saying there's also "other" candidates in the running ("both Kevins are very good, and there are other people that are very good too.") 

• However, he also says that one of the previous administrations officials considered to be a candidate, Treasury Secretary Bessent, removed himself from consideration for the role.
• When current Gov Waller's name was brought up among other candidates, Trump did not have anything specific to say about him.
• Bessent and Waller are/were arguably the most "orthodox" choices for the role among the short-list of assumed favorites.
• Warsh remains the perceived favorite though Trump's mention of Hassett appears to improve his standing. Waller is a slight outsider in terms of the odds.
• Trump also said that the next Fed Chair could possibly also be the person who replaces Gov Kugler who resigned last week before the end of her term in January.