TURKEY: Imamoglu Ready to Back Other Candidates Against Erdogan

Futures top out at 91.85 before threatening a break below Friday’s low.

• Contract last 91.75.
• Bears remain in technical control and eye the July 8 low (91.42). Conversely, bulls initially need to clear the July 10 high (92.19).
• Little in the way of tangible impact from BoE Governor Bailey’s dovish comments and a soft REC labour market report further out the curve, although they do feed through into STIRs and the front end of the gilt curve.
• Yields -3bp to +1bp, curve twist steepens.
• Month-to-date ranges intact across the major benchmark yields
• 2s10s registers the highest level since April, 78.9bp, and is on track to register the highest close of ’25. The April 9 high (84.6bp) provides the next major upside target.
• 5s30s trades back above 140bp, with the ’25 intraday high (147.2bp) providing the next upside area of interest.
• GBP STIRs around pre-gilt open levels. SONIA futures flat to +3.0, while BoE-dated OIS shows ~54bp of cuts through year-end.
• The Mansion House event, as well as CPI & Labour market data, headline this week’s UK calendar. Please see our earlier STIR bullet/Global Week Ahead email for greater colour on those events.

10:00 ET 15:00 BST: President Donald Trump will hold a (closed press) White House meeting with NATO SecGen Mark Rutte, where he is expected to finalise a new plan to arm Ukraine “that is expected to include offensive weapons,” per Axios. Later today, Trump is expected to make a 'major statement' on Russia. No timing has been released.

• Axios reports the plan is likely to include long-range missiles that could reach targets "deep inside Russian territory” a “major shift for Trump, who had until recently [said] he would provide only defensive weapons to avoid [escalation].”
• Politico reported the weapons package "numbers in the hundreds of millions”, and “could come from the fund approved by [Biden] that lets the DOD give weapons from the U.S. military stockpile...”
• Trump's 'major statement' is also likely to include preliminary approval of Senator Lindsay Graham's (R-SC) punitive sanctions/tariffs bill, reworked to provide Trump full discretion over implementation.
• Graham said on X: “.... A turning point is coming.” He told Axios: "Trump is really pis--- at Putin. His announcement tomorrow is going to be very aggressive."
• Senate Majority Leader John Thune (R-SD) indicated the bill will hit the Senate next week. House Speaker Mike Johnson (R-LA) endorsed the bill, putting it on a track to Trump’s desk.   
• Polymarket sees a 64% chance Trump increases Russia sanctions before August, a significant spike since last week.

Figure 1: Trump increase sanctions on Russia before August?

Source: Polymarket

Bear steepening in the JGB curve has extended this morning, spilling over into long-end EGBs and Gilts. 10s30s is currently just under 5bps steeper at 157.3bps, still below last Tuesday’s 160.3bp high.

• 30-year yields are up 11bps at 3.172%, with initial key resistance the May 21 high at 3.204% (the highest level since the BBG series began in 1999).
• Meanwhile, 10-year yields pierced the May 22 high of 1.582% overnight, but are currently back at 1.580% (+6bps today).
• As already noted, a combination of fiscal/political risks and possible upgrades to the BOJ’s inflation projections at the upcoming July 31 decision have contributed to the latest rise in yields.
• The Upper House election will be held on July 20. The LDP is on course to lose a significant number of seats and the governing coalition could also lose its overall majority. JNN reporting overnight was supportive of this scenario.
• Meanwhile the latest Bloomberg sources reporting was consistent with last week’s MNI Policy Team piece: BOJ officials may increase their median CPI forecast for FY25 from 2.2% partly due to a temporary surge in rice prices, MNI understands. The steepening of the curve suggests this is a contributing factor of today’s JGB selloff, rather than a driver.
• Structural forces pushing long-end JGB yields higher also remain in play, namely concerns around demand for long-end debt and weak liquidity at that portion of the curve.
• This week’s Japanese calendar includes 5-year supply tomorrow, June trade data on Thursday and June national CPI on Friday.