MNI ASIA OPEN: Atl Bostic Sees 1 Cut, US/Canada Talks Back on

EXECUTIVE SUMMARY

• MNI FED: Atlanta's Bostic: 1 Cut In 2025, 3 In 2026 Amid Lingering Tariff Risks
• MNI MIDEAST: Netanyahu Could Visit White House As Soon As Next Week - JPost
• MNI US-EU: Sefcovic To Travel To US & Continue Trade Talks
• MNI US DATA: Chicago Business Barometer™ - Held At 40.4 In June

US

MNI FED: Atlanta's Bostic: 1 Cut In 2025, 3 In 2026 Amid Lingering Tariff Risks

Atlanta Fed Pres Bostic tells an MNI Connect event that he eyes potential for tariff inflation impact to extend into 2026, as part of a "continuous evolution" of prices as opposed to the textbook one-off impact: "It'll take a while for all these businesses to figure out exactly where their endpoint is. And you know, by some estimates, this could stretch into 2026 before businesses do all the things they're going to do, and that assumes that the tariff situation is not extended even further moving forward... I think the further implication of this is that what we will see with prices is such a more continuous evolution over time, as opposed to the textbook story of tariffs, which is a one time step up, right?... This doesn't look like it's going to be like a step like that, it would be much more incremental over time, and we'll have to see sort of what that means for overarching inflation dynamics."

NEWS

MNI MIDEAST: Netanyahu Could Visit White House As Soon As Next Week - JPost

Amichai Stein at the Jerusalem Post reporting that "advanced talks" are underway for Israeli Prime Minister Benjamin Netanyahu to travel to Washington, D.C. for a meeting with US President Donald Trump, with sources suggesting the trip could happen as soon as next week. The trip comes after Trump signalled he could leverage US military aid to Israel to halt corruption proceedings against Netanyahu - a move that appears to be aimed at securing a ceasefire in Gaza.

MNI US-EU: Sefcovic To Travel To US & Continue Trade Talks

European Trade and Economic Security Commissioner Maros Sefcovic has confirmed that he will travel to Washington, D.C., on 1 July for trade talks with US officials as Brussels seeks to avoid the imposition of substantial reciprocal tariffs on 9 July. It is widely expected that if any agreement can be reached by the deadline, it will not be a fully-fledged trade deal but a much looser framework of an agreement, in a similar vein (although with different details) of that reached between the US and UK that came into force today.

MNI FRANCE: Bayrou Faces 1 July Censure Motion, But Main Threat Comes In Autumn

Prime Minister Francois Bayrou and his government face a motion of no confidence in the National Assembly on 1 July after the centre-left Socialist Party (PS) put forward the measure over the breakdown in talks over controversial pension reforms pushed through by President Emmanuel Macron in 2023. Bayrou is set to survive the vote, with the far-right Rassemblement National (RN, National Rally) having said they will abstain, denying the PS and other parties of the left the requisite majority to remove Bayrou. No set time for the censure motion yet, but debate on the Dec 2024 motion got underway ~16:00CET. 

US TSYS

MNI US TSYS: Tsys Near Late Session Highs with Stocks, US$ at March '22 Lows

• Treasuries look to finish near late Monday highs, curves bull flattening amid mildly cautious risk-on tone after Canada withdrew last Friday's plans to implement a digital tax on US tech companies, trade talks to resume with US, Hassett said.
• Tsy Sep'25 10Y trades +10 at 112-04 after the bell, key resistance above at 112-23 (High May 1), 2s10s -2.210at 50.476, 5s30s -1.630 at 98.714.
• Amid the renewed focus on rate differentials in FX, the bull flattening move for the US curve has helped the US dollar extend its most recent weakness, with the dollar index falling around 0.5% to fresh cycle lows (March 2022 levels).
• The moves come amid President Trump stepping up his criticism of Fed Chair Powell and his ‘entire board’ over the level of US interest rates. Notably, Goldman Sachs have also pulled forward their call for the next Fed cut to September.
• Also note: Morgan Stanley strategists suggest buying SFRZ5 futures ahead of tomorrow's May Jolts and Thursday's June Non-Farm Payrolls release that may underpin rate cut projections that are over halfway between 50bp to 75bp in rate cuts by year end. "Downside risks to US labor market data remain underpriced, especially considering the potential for near 0k payroll prints starting as soon as July," MS suggested in a recent strategy piece.
• Stocks extended late Monday session highs - either caution to the wind ahead of a heavy data (shortened) week (markets are closed for the Independence Day holiday Friday, which draws the June employment release one day forward). Or month-end tied buying as money managers reallocated funds.

OVERNIGHT DATA

MNI US DATA: Chicago Business Barometer™ - Held At 40.4 In June

The Chicago Business Barometer™, produced with MNI, fell 0.1 points to 40.4 in June. The index is now 7.2 points below March’s year-to-date high of 47.6 and has now been below 50 for nineteen consecutive months. The slight decrease was driven by a fall in Supplier Deliveries, Production, Employment and Order Backlogs. This was almost fully offset by a rise in New Orders.

• New orders rebounded 4.1 points, but remain below the year-to-date average. The increase was driven by a lower proportion of respondents reporting fewer new orders compared to May.
• Supplier deliveries eased 6.8 points.
• Production pared 2.7 points to 41.2. This was the third consecutive decline, with the index now at its lowest since January.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 275.5 points (0.63%) at 44094.77
S&P E-Mini Future up 27 points (0.43%) at 6250.5
Nasdaq up 96.3 points (0.5%) at 20369.73
US 10-Yr yield is down 4.1 bps at 4.2358%
US Sep 10-Yr futures are up 8/32 at 112-2
EURUSD up 0.0062 (0.53%) at 1.178
USDJPY down 0.66 (-0.46%) at 144.01
WTI Crude Oil (front-month) down $0.53 (-0.81%) at $64.99
Gold is up $33.86 (1.03%) at $3308.34

European bourses closing levels:
EuroStoxx 50 down 22.4 points (-0.42%) at 5303.24
FTSE 100 down 37.95 points (-0.43%) at 8760.96
German DAX down 123.61 points (-0.51%) at 23909.61
French CAC 40 down 25.64 points (-0.33%) at 7665.91

US TREASURY FUTURES CLOSE

3M10Y -3.28, -6.311 (L: -13.865 / H: -3.176)
2Y10Y -1.235, 51.451 (L: 50.242 / H: 54.118)
2Y30Y -1.523, 106.992 (L: 105.002 / H: 110.445)
5Y30Y -0.932, 99.412 (L: 97.627 / H: 101.595)
Current futures levels:
Sep 2-Yr futures up 1/32 at 104-0.5 (L: 103-30.75 / H: 104-01)
Sep 5-Yr futures up 4.25/32 at 109-0 (L: 108-25.5 / H: 109-01.5)
Sep 10-Yr futures up 8.5/32 at 112-2.5 (L: 111-22 / H: 112-05.5) 
Sep 30-Yr futures up 25/32 at 115-8 (L: 114-06 / H: 115-17)
Sep Ultra futures up 1-0/32 at 118-25 (L: 117-13 / H: 119-07)

MNI US 10YR FUTURE TECHS: (U5) Holding On To Its Recent Gains

• RES 4: 114-14   High Apr 7 and key resistance
• RES 3: 113-07   76.4% retracement of the Apr 7 - 11 bear leg
• RES 2: 112-23   High May 1 and key resistance
• RES 1: 112-05 Intraday High
• PRICE:‌‌ 111-31 @ 11:16 BST Jun 30
• SUP 1: 111-11+/110-27 Low Jun 25 / 50-day EMA       
• SUP 2: 110-10+/109-28 Low Jun 16 / Low Jun 6 / 11
• SUP 3: 109-12+ Low May 22 and the bear trigger
• SUP 4: 109-09+ Low Apr 11 and key support

Treasury futures traded higher last week and the contract is holding on to its gains. Resistance at 111-14+, the Jun 5 high and 61.8% of the May 1 - 22 downleg, has been cleared. The break strengthens a bullish cycle. Note too that  last Thursday’s gains delivered a print above 111-30, 76.4% of the May 1-22 downleg. A clear break of this level would strengthen current conditions. Initial pivot support to watch lies at 110-27, the 50-day EMA. 

SOFR FUTURES CLOSE

Sep 25 +0.005 at 95.990
Dec 25 +0.020 at 96.330
Mar 26 +0.025 at 96.595
Jun 26 +0.030 at 96.815
Red Pack (Sep 26-Jun 27) +0.030 to +0.035
Green Pack (Sep 27-Jun 28) +0.030 to +0.035
Blue Pack (Sep 28-Jun 29) +0.035 to +0.040
Gold Pack (Sep 29-Jun 30) +0.045 to +0.045

REFERENCE RATES (PRIOR SESSION)
​​​​​​​
US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.39% (-0.01), volume: $2.775T
• Broad General Collateral Rate (BGCR): 4.37% (-0.01), volume: $1.083T
• Tri-Party General Collateral Rate (TCR): 4.37% (-0.01), volume: $1.058T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $122B
• Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $262B

FED Reverse Repo Operation

RRP usage surged to $460.731B this afternoon (highest since December 31) from $285.742B Friday, total number of counterparties climbs to 62. Usage had fallen to $54.772B on Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B.

MNI PIPELINE: Late Corporate Bond Update: Venture Global 2Pt Upsized to $4B

$11.75B to Price Monday

• Date $MM Issuer (Priced *, Launch #)
• 06/30 $4B #Venture Global Plaquemines $2B 8.5NCL 6.5%, $2B 10.5NCL 6.75%
• 06/30 $4B #SMFG $700M 6NC5 +87, $900M 6NC5 SOFR+119, $700M 8NC7 +97, $700M 11NC10 +102, $1B 21NC20 +102
• 06/30 $1.5B *ABN Amro $750M 3Y +50, $750M 3Y SOFR+75
• 06/30 $1.25B #Niagara Mohawk Power $500M +5Y +85, $750M 30Y +120
• 06/30 $1B *SoftBank $500M 5Y +90, $500M 10Y +110

MNI BONDS: EGBs-GILTS CASH CLOSE: Bunds Underperform Despite Softer German Inflation

Gilts outperformed Bunds Monday despite softer-than-expected Eurozone inflation readings.

• Early data showed a downside surprise in German state-level inflation tracking, with national HICP turning out 0.2pp below the pre-consensus, which helped Bunds (and Gilts) catch an early bid.
• A de-escalation in US-Canada trade tensions also appeared to help Global FI early.
• The session was more notable for idiosyncratic moves that had no apparent immediate macro or headline drivers.
• A selloff in Gilts to yields' session highs (10Y 4.514%) in early afternoon trade quickly faded. Later in the afternoon Bunds dropped sharply, again with no apparent macro driver but instead appeared to be flow-related with large selling at around 1530 London time.
• The German curve bear steepened on the day, with the UK's twist steepening.
• Periphery/semi-core EGB spreads mostly tightened modestly, with BTPs outperforming.
• Tuesday's calendar includes panel appearance with both ECB's Lagarde and BOE's Bailey, May ECB inflation expectations, and the second reading of the welfare reform bill in the UK.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 0.1bps at 1.861%, 5-Yr is up 0.7bps at 2.17%, 10-Yr is up 1.5bps at 2.607%, and 30-Yr is up 3bps at 3.1%.
• UK: The 2-Yr yield is down 2.2bps at 3.817%, 5-Yr is down 1.8bps at 3.95%, 10-Yr is down 1.5bps at 4.489%, and 30-Yr is up 0.7bps at 5.279%.
• Italian BTP spread down 1.2bps at 86.9bps / French OAT down 0.5bps at 67.4bps  

MNI FOREX: USD Downtrend Extends as Trump Steps Up Rhetoric on Fed Rates

• Amid the renewed focus on rate differentials in FX, the bull flattening move for the US curve has helped the US dollar extend its most recent weakness, with the dollar index falling around 0.5% to fresh cycle lows (March 2022 levels). The moves come amid President Trump stepping up his criticism of Fed Chair Powell and his ‘entire board’ over the level of US interest rates. Notably, Goldman Sachs have also pulled forward their call for the next Fed cut to September.
• Gains across G10 have been led by the likes of CHF (+0.71%) AUD (+0.72%) and NZD (+0.64%) as the continued resilience for major equity benchmarks underpins the firm sentiment for risk. For AUDUSD, this promotes spot to a fresh cycle high above 0.6570. A clear break of key resistance and the bull trigger, at 0.6552, would confirm a resumption of the trend and initially opening 0.6603, the Nov 11 2024 high.
• USDCHF now tracks around 0.7930 as the move below the psychological 0.80 handle extends. Indeed, CHFJPY has had an impressive bounce of the early morning lows at 180.20 to trade at a fresh record high once more above 181.75.
• EURUSD has also edged to fresh session/cycle highs Monday, continuing to track at the best traded levels since September 2021 above 1.1770. Last week’s gains reinforced the uptrend, emboldened by a breach of the bull trigger at 1.1631, the Jun 12 high. Immediate sights are on 1.1783, a Fibonacci projection, before 1.1821, the Sep 16 2021 high.
• Rates/dollar dynamics may place a greater focus than usual on this week’s US employment report, notably scheduled on Thursday owing to the July 4th holiday. Separately, ISM and JOLTS data are scheduled tomorrow. The global calendar kicks off with the release of Eurozone HICP.

TUESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
01/07/2025	0630/0830	**	CH	Retail Sales
01/07/2025	0715/0915	**	ES	S&P Global Manufacturing PMI (f)
01/07/2025	0740/0940		EU	ECB de Guindos Chairs Sintra Panel
01/07/2025	0745/0945	**	IT	S&P Global Manufacturing PMI (f)
01/07/2025	0750/0950	**	FR	S&P Global Manufacturing PMI (f)
01/07/2025	0755/0955	**	DE	Unemployment
01/07/2025	0755/0955	**	DE	S&P Global Manufacturing PMI (f)
01/07/2025	0800/1000	**	EU	ECB Consumer Expectations Survey
01/07/2025	0800/1000	**	EU	S&P Global Manufacturing PMI (f)
01/07/2025	0830/0930	**	GB	S&P Global Manufacturing PMI (Final)
01/07/2025	0840/1040		EU	ECB Elderson Chairs Sintra Panel
01/07/2025	0900/1100	***	EU	HICP (p)
01/07/2025	1040/1240		EU	ECB Schnabel Chairs Sintra Panel
01/07/2025	-	***	US	Domestic-Made Vehicle Sales
01/07/2025	1255/0855	**	US	Redbook Retail Sales Index
01/07/2025	1330/1430		GB	BOE Bailey On Panel At Sintra Conference
01/07/2025	1330/0930		US	Fed Chair Jerome Powell
01/07/2025	1330/1530		EU	ECB Lagarde On Sintra Panel
01/07/2025	1345/0945	***	US	S&P Global Manufacturing Index (final)
01/07/2025	1400/1000	***	US	ISM Manufacturing Index
01/07/2025	1400/1000	*	US	Construction Spending
01/07/2025	1400/1000	***	US	JOLTS jobs opening level
01/07/2025	1400/1000	***	US	JOLTS quits Rate
01/07/2025	1400/1000	*	US	Construction Spending
01/07/2025	1430/1030	**	US	Dallas Fed Services Survey
02/07/2025	0130/1130	*	AU	Building Approvals
02/07/2025	0130/1130	**	AU	Retail Trade