MNI ASIA MARKETS ANALYSIS:Geo-Pol Risk Ahead Next Wk's CPI/PPI

HIGHLIGHTS

• Sentiment ebbed and flowed early Friday, markets remain sensitive to ongoing geopolitical headlines (whether they are new - or reposts).
• Case in point: Treasuries and stocks reversed modest gains - extending lows after Pres Trump social media post confirming dozens of headlines over the last 24 hours: the US/Iran ceasefire is over even as he agrees to ongoing negotiations.
• Pres Trump to allow bipartisan housing bill to become law - still refuses to sign it in protest of the Senate's inaction on the SAVE America Act last week.
• Focus on next week's CPI and PPI data on Tuesday/Wednesday respectively, as well as Fed Chair Warsh testimony to the Senate Banking Comm Wednesday.

US TSYS

MNI US TSYS: Geo-Pol Headline Sensitive, Focus on Next Wk's CPI/PPI, Warsh Testimony

• Treasuries look to finish the session moderately weaker - near late session lows. Markets remain sensitive to US/Iran cease-fire and/or negotiation headlines that made the rounds every couple hours.
• Case in point: Treasuries and stocks reversed modest gains - extending lows after Pres Trump social media post confirming dozens of headlines over the last 24 hours: the US/Iran ceasefire is over even as he agrees to ongoing negotiations.
• Treasuries quietly retreated since midday: TYU6 session low at 109-00.5 currently trades 109-02.5 (-6) - albeit on modest volumes, the contract typically over 1.2M at this time is just over 975k. 10Y yld +.0081 at 4.5592%.
• Projected rate hike pricing regained momentum around midday - rising vs. late Thursday levels (*) & October back to pricing first 25bp hike: Jul'26 at +8.4bp (6.5bp), Sep'26 at +21.6bp (+18.4bp), Oct'26 at +27.4bp (+23.8bp), Dec'26 +37.1bp (+33.2bp).
• Cross asset update: Bbg US$ index off midday low: BBDXY at 1218.98 (-1.2) vs. 1216.13 session low; stocks hold modest gains: SPX emini, DJIA and Nasdaq +0.3-0.45%; crude mildly lower: WTI -.54 at $71.54/bbl
• No data today, focus is on next week's CPI and PPI data on Tuesday/Wednesday respectively, as well as Fed Chair Warsh testimony to the Senate Banking Comm Wednesday.

REFERENCE RATES
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US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 3.53% (-0.05), volume: $3.126T
• Broad General Collateral Rate (BGCR): 3.51% (-0.06), volume: $1.313T
• Tri-Party General Collateral Rate (TCR): 3.51% (-0.06), volume: $1.281T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.62% (+0.00), volume: $126B
• Daily Overnight Bank Funding Rate: 3.62% (+0.00), volume: $276B

FED Reverse Repo Operation

RRP usage retreats to $545M with 3 counterparties this afternoon vs. $5.772B Thursday. Compares to last year's highest excess liquidity measure: $460.731B on June 30, 2025.

US SOFR/TREASURY OPTION SUMMARY

MNI US TSYS: Late SOFR/Treasury Option Roundup: Playing Range, Fading Sell-Off

SOFR & Treasury options trade outlined below: Modest overall volumes, mild pick-up in SOFR Call plays. Underlying weaker with focus on next week's CPI and PPI data on Tuesday/Wednesday respectively, as well as Fed Chair Warsh testimony to the Senate Banking Comm Wednesday. Projected rate hike pricing regained momentum around midday - rising vs. late Thursday levels (*) & October back to pricing first 25bp hike: Jul'26 at +8.4bp (6.5bp), Sep'26 at +21.6bp (+18.4bp), Oct'26 at +27.4bp (+23.8bp), Dec'26 +37.1bp (+33.2bp).

• SOFR Options:
  • SFRZ6 96.375/96.50cs +.75/3k, bid (95.95
  • +15,000 SFRZ6 96.75/97.00 call spds, 0.75 ref 95.965
  • +1,000 OQV6/2QV6 96.00 straddle strip vs OQX6/2QX6 96.00 straddle strip, 11.0 net
  • +2,500 SFRH7 96.50/96.75/97.00 call flys, 1.0 vs. 95.91 -.905/.05%
  • +2,000 SFRZ6 96.50/97.00/97.50 call trees, 0.25 ref 95.97
  • +2,500 SFRQ6 95.93/96.00 put spds, 1.25 ref 96.125
  • 3,000 0QQ6 95.50/95.75 put spds ref 95.955
  • 2,000 SFRQ6 96.12/96.18/96.25/96.37 call condors ref 96.135
  • Block: 7,500 SFRU6 95.81/95.87/96.00/96.06 put condors, 1.25 ref 96.135
• Treasury Options:
  • +3,500 TYU6 108/110 strangles, 36 vs. 109-07/0.07%
  • 4,600 TYU6 108 puts, 16 ref 109-05.5
  • 3,000 TYU6 109.5 calls ref 109-06
  • over 7,000 FVV6 108 calls, 10.5
  • Update, 8,000 TYU6 111 calls, 6-8 ref 109-10.5
  • 4,000 USQ6 113 calls, 10 last
  • -2,500 USU6 114/116 call spds, 14-15 ref 111-19 to -16
  • +7,000 wk2 TY 109.25 puts, 4 ref 109-10.5 (exp today)
  • +7,000 FVQ6 106/106.5 put spds, 10 ref 106-25
  • +3,000 TYU6 113 calls, 2 ref 109-08

MNI BONDS: EGBs-GILTS CASH CLOSE: Second Day Of Gains Fails To Pare Weekly Losses

European yields fell for a second consecutive session Friday, but remained far above levels seen at the start of the week.

• Overnight gains in global FI spurred in part by a JGB rally (Japan FinMin calling on pension funds to purchase domestic assets) would fade as oil prices picked up off lows on continued lingering concern over the US-Iran situation heading into the weekend.
• Such concerns appeared to prove well-founded around 1.5 hours before the European cash close, when US President Trump declared on social media that the ceasefire was "over". 10Y core yields rose a quick 2+bp to session highs: Bund to 3.091% with Gilt to 4.907%.
• But yields would descend from there into the close, in part because Trump also noted talks would continue, and Axios later reported that another round of US-Iran negotiations is expected next week.
• Yields closed at/near the lows, and on the day the UK and German curves bull flattened, with Gilts outperforming Bunds. Periphery/semi-core EGB spreads tightened for a second day, with BTPs outperforming.
• On the week, the UK curve bear flattened (2Y yield +10bp, 10Y +9bp) while Germany's bear steepened (2Y +11bp, 10Y +13bp).
• Next week's calendar is lighter in terms of data, with UK monthly activity and final Eurozone June inflation reports due. We also hear from BOE's Bailey and Pill, along with pre-quiet period commentary from ECB's Schnabel and Nagel.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is unchanged at 2.647%, 5-Yr is down 0.5bps at 2.761%, 10-Yr is down 1.9bps at 3.065%, and 30-Yr is down 2.1bps at 3.605%.
• UK: The 2-Yr yield is down 2bps at 4.221%, 5-Yr is down 2.3bps at 4.406%, 10-Yr is down 2.5bps at 4.872%, and 30-Yr is down 2.6bps at 5.598%.
• Italian BTP spread down 1.7bps at 73.7bps / French OAT down 0.3bps at 76.8bps

MNI OPTIONS: Prevalence Of Call Condors / Spreads Buying Continues

Friday's Europe rates/bond options flow included:

• RXQ6 126.50/127.00 call spread paper paid 7 on 2.7K
• ERU6 97.37/97.31/97.12p fly, bought for -0.5 in 5k
• ERH7 97.50/97.37/96.93p ladder, bought for -0.75 in 4k
• ERM7 97.50/97.75/98.00c fly, bought for 4.75 in 8k
• SFIU6 96.15/96.20/96.25c fly, bought for 1.25 in 3k
• SFIZ6 96.25/96.35cs, bought for 1.25 in 10k.
• SFIZ6 96.40/96.50/96.65/96.75 call condor bought for 0.5 in 20k

MNI FOREX: Japanese Yen Ending Week on Firmer Footing

• The dollar index tilts marginally lower on Friday owing to another dip lower for crude futures improving risk sentiment somewhat on the session. Overnight lows for the DXY of 100.60 have remained intact as we approach the close, and overall, the index has been in consolidation mode this week. Markets will be monitoring a daily close below the 20-day EMA, which has been supportive of the bullish trend currently in place.
• USDJPY (-0.63%) volatility was stoked by comments from Finance Minister Satsuki Katayama, who said the government wants to encourage pension funds, including the Government Pension Investment Fund, to increase investment in domestic financial assets.
• USDJPY quickly fell from levels around 162.40 to session lows of 161.29 during APAC trade, and despite a slow grinding recovery across most of the session, spot has edged back towards the lows as we approach the weekend close. Overall, a bullish theme remains firmly intact and key support is not seen until 160.39, the 50-day EMA.
• General dollar weakness and firmer risk sentiment have prompted solid performance for the likes of AUD, NZD and CAD, with the latter also benefitting from an above expected jobs gain in June and a downtick in the unemployment rate to 6.5%. This has helped USDCAD extend its corrective pullback as the pair is pressured back towards 1.41.
• Both EUR and GBP are close to unchanged on the session, and this dynamic is helping EURGBP consolidate a 0.5% selloff this week. Session lows for the cross practically matched the Jun 27 ’25 low at 0.8508, while also in focus down here is the base of the bear channel, which intersects at 0.8495 today.
• All focus turns to next week’s inflation data from the US, while Fed Chair Warsh will also testify on the Semi-annual Monetary Policy Report.

MNI US STOCKS: Late Equities Roundup: Remain Geo-Pol Headline Sensitive

• US equity indexes are back to trading mild- to modestly higher late Friday, early market swings tied to US/Iran cease-fire and/or negotiation headlines that make the rounds every couple hours.
• Case in point: Treasuries and stocks reversed modest gains - extending lows after Pres Trump social media post confirming dozens of headlines over the last 24 hours: the US/Iran ceasefire is over even as he agrees to ongoing negotiations.
• Currently, the DJIA is +0.34%, SPX eminis +0.4%, the Nasdaq +0.3%.
• The top three stocks leading advances in the second half: Meta Platforms +5.91% after analysts suggested "potentially lower" AI infrastructure costs would underpin Meta shares while expanding capacity efficiencies.
• Weyerhaeuser recovered from midweek selling to gain near 4% Friday after Raymond James upgraded the timber products company.
• Several stocks rallied 3-4% for no other reason than pre-weekend short-covering after trading lower earlier in the week: NIKE Inc, Dollar Tree, Pentair, A O Smith, Lululemon Athletica, Smurfit Westrock and Brown-Forman Corp.
• On the flipside, big-pharma and technology sector shares underperformed. At midday, Moderna trades -11.2% on profit taking after the drug maker rallied 48% in June. Meanwhile Gilead Sciences declined 3.6%.
• Weaker tech shares included Crowdstrike Holdings -5.49%, Datadog -3.66%, Palo Alto Networks -3.88% and Fortinet Inc -3.97%.

MNI EQUITY TECHS: E-MINI S&P: (U6) Trend Needle Still Points North

• RES 4: 7700.00 Round number resistance
• RES 3: 7693.75 High Jun 2 and the bull trigger
• RES 2: 7652.75 High Jun 5 
• RES 1: 7648.75 High Jun 15 
• PRICE: 7603.25@ 14:37 BST Jul 10
• SUP 1: 7357.25/7292.25 Low Jun 26 / 11 and key support
• SUP 2: 7200.00 Round number support
• SUP 3: 7135.00 Low Apr 23 
• SUP 4: 7047.75 50.0% retracement of the Mar 31 - Jun 1 bull cycle

The trend condition in S&P E-Minis is unchanged, the set-up remains bullish. Note that moving average studies are in a bull-mode position and this continues to highlight a dominant uptrend. The rally on Jun 29 was a bullish engulfing candle - a reversal signal. It suggests the end of the recent corrective pullback. Key support lies at 7292.25, the Jun 11 low. A continuation higher would open 7693.75, the Jun 2 high and bull trigger.

COMMODITIES July 10- Americas End of Day Oil Summary: Crude Falls

US OIL: July 10- Americas End of Day Oil Summary: Crude Falls 

WTI Oil ended lower as markets take an optimistic approach to current mediation efforts to de-escalate tensions between the US and Iran. Trump confirmed talks would continue though also said the ceasefire was over, muddying the situation for markets.

• Baker Hughes US Total Rigs rose 1 to 581 Rigs for the week ending July 10th, up 44 from the prior year. Canada total rigs declined 11 to 179 rigs for the week ending July 10th, up 17 from the prior year.
• Overall, the lack of fighting would indicate both sides remain committed to diplomacy though the status of the Strait of Hormuz also remains unclear.
• Oil remains higher for the week as traffic out of the Persian Gulf slows.
• All the major Gulf producers had been scaling up output over recent Middle East optimism. Saudi allocations, soon to be reported, will help indicate how much hope they have of transit recovering.
• US Central Command said “Iran does not control the Strait of Hormuz,” according to a post on X.
• Crude came under slight pressure earlier from the latest IEA report, which suggested that the UAE’s oil output hit a record high of 4.1m b/d in June, higher than previous estimates from other outlets.
  • WTI Aug futures were down 1% at $71.41/bbl
  • WTI Sep futures were down 0.8% at $71.35/bbl

MONDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
13/07/2026	0925/0525		US	Fed Vice Chair Michelle Bowman
13/07/2026	-	***	CN	Money Supply
13/07/2026	-	***	CN	New Loans
13/07/2026	-	***	CN	Social Financing
13/07/2026	1200/0800	*	US	NY Fed SOFR
13/07/2026	1300/0900	*	US	NY Fed EFFR
13/07/2026	1530/1130	*	US	US Treasury Auction Result for 13 Week Bill
13/07/2026	1530/1130	*	US	US Treasury Auction Result for 26 Week Bill
13/07/2026	1630/1230		US	Fed Governor Christopher Waller
13/07/2026	1645/1845		EU	ECB Schnabel Keynote and Panel, Munster
13/07/2026	1800/1400	**	US	Treasury Budget
13/07/2026	1800/1900		GB	BOE Pill Speech on FinReg/Innovation/Growth
14/07/2026	2301/0001	*	GB	BRC-KPMG Shop Sales Monitor
14/07/2026	0430/1330	**	JP	Industrial Production