MNI ASIA OPEN: FOMC Minutes Team Transitory in the Minority

EXECUTIVE SUMMARY

• MNI FED: Team Transitory Seemingly In The Minority On FOMC
• MNI FED: Minutes Clearly Signal A July Hold, While Keeping Future Options Open
• MNI TARIFFS: Pres Trump Publishes Latest US Tariff Rates On 6 Countries
• MNI UKRAINE: Zelenskyy Set To Meet w/US Envoy On Rome Visit
• MNI US DATA: Mortgage Purchase Applications Gaining Traction As Rates Dip

US

MNI FED: Team Transitory Seemingly In The Minority On FOMC

There was not much that was really new on the inflation outlook in the June minutes vs what we have heard from FOMC participants in the last 3 weeks. Overall, "participants noted that the progress in returning inflation to target had continued even though that progress had been uneven" (and in a nod to the hawks and perhaps a little surprising given decent inflation readings, "a few participants noted that there had been limited progress recently in reducing core inflation.").

MNI FED: Minutes Clearly Signal A July Hold, While Keeping Future Options Open

The June meeting minutes captured a Committee that was leaning in a slightly more hawkish direction than earlier in the year, though probably no more than should have been expected. The Dot Plot released at the meeting already captured most of the story: a divided Committee retains its overall easing bias but needs varying degrees of certainty before supporting a resumption of the easing cycle. 

MNI FED: FOMC Fears Tariff Inflation, Split On Rate Path- Minutes

NEWS

MNI TARIFFS: Pres Trump Publishes Latest US Tariff Rates On 6 Countries

US President Trump announces tariff rates (via the now-usual Truth Social "letters") on:

• the Philippines (20%, vs 17% reciprocal tariff announced on "Liberation Day")
• Moldova (25% vs 31%)
• Algeria (30%, unchanged)
• Brunei (25%, vs 24%)
• Iraq (30% vs 39%)
• Libya (30% vs 31%)

MNI TARIFFS: Trump Issues New Tariff Letters On Truth Social

US President Donald Trump has issued a raft of new tariff letters on his Truth Social account, imposing unilateral tariff rates on six trading partners. The letters target Algeria (30%), Libya (30%), Moldova (25%), Iraq (30%), Brunei (25%), and the Philippines (20%). 

• The letters follow a nearly identical template to the tariff letters issued to 15 trading partners on Monday and Tuesday. They note that goods "transshipped" via the targeted country will be subject to the tariff of the origin country, widely understood to be directed at Chinese goods. As with the other tariff letters this week, today's letters state that implementation will take place on August 1, opening the door for negotiations to lower the tariff rate.

MNI US-EU: Sefcovic To MEPs: Hope For Satisfactory Result On Trade In Coming Days

European Trade Commissioner Maros Sefcovic has just finished updating the European Parliament on the state of talks with the US intended to mitigate the impact of tariffs on EU-US trade. Sefcovic says that "Our priority is a negotiated solution with the US", and that trade talks "continue remotely every day." Claims that the two sides have "made good progress on the text of an agreement in principle" and that he "hopes to achieve a satisfactory result in the coming days." Acknowledges that even with a skeleton deal, "a degree of rebalancing" will be needed in future transatlantic trade. 

MNI RUSSIA: Kremlin Spox Looks To Cast Doubt On Trump "Threat" To Bomb Moscow

Kremlin spox Dmitry Peskov speaks on US President Donald Trump's comments at a Cabinet meeting on 8 July, Peskov says that "We are quite calm about this", adding "Trump has a rather tough style in the phrases he uses." Asked about a series of massive air and drone strikes on Ukrainian cities, Trump said, “I’m not happy with Putin, I can tell you that much right now, because he’s killing a lot of people. We get a lot of bulls--- thrown at us by Putin. You want to know the truth. He is very nice all the time, but it turns out to be meaningless.” Trump added that he was looking at the prospect of stricter sanctions on Russia "very strongly". 

MNI EU-RUSSIA: Slovakia Maintains Veto On Latest Sanctions Package

Slovakia continues to act as a brake on EU efforts to impose an 18th round of sanctions on Russia, with diplomatic sources telling Euronews that at the 9 July Coreper II meeting of EU permanent representatives, the Slovakian ambassador once again vetoed the package. Euronews reports the latest sanctions "target Russia's financial and energy sectors, including the Nord Stream pipelines. A move to lower the price cap on Russian crude oil is uncertain to succeed due to the White House's reluctance." 

MNI UKRAINE: Zelenskyy Set To Meet w/US Envoy On Rome Visit

President Volodymyr Zelenskyy's Press Secretary Serhiy Nikiforov has confirmed to reporters that as part of his visit to Rome for the Ukraine Recovery Conference 2025, Zelenskyy will meet with US presidential envoy for Russia and Ukraine, Keith Kellogg. Initially reported on 8 July, the meeting comes as the White House's rhetoric towards Zelenskyy and Ukraine, particularly from President Donald Trump, has become much more positive in recent days amid clear irritation with Russian President Vladimir Putin's perceived stalling on peace talks. 

MNI FRANCE: Bardella Denounces Police Raid On RN HQ

Jordan Bardella, president of the right-wing nationalist Rassemblement National (National Rally, RN), has expressed outrage after the Financial Brigade of the Paris Judicial Police executed a raid on the RN's headquarters, including the leader's office, at around 08:50CET. Bardella calls the police's actions "a serious attack on pluralism and democratic change", adding, "Never has an opposition party faced such relentless targeting under the Fifth Republic."

US TSYS

MNI US TSYS: June FOMC Minutes Signal July Hold, Forward Options Open

OVERNIGHT DATA

MNI US DATA: Mortgage Purchase Applications Gaining Traction As Rates Dip

The MBA mortgage applications market composite index rose 9.4% W/W in the week of July 4 (2.7% prior), the biggest increase in a month to the highest level in 13 weeks (all on a seasonally-adjusted basis). 

• Gains were more or less equally attributable to purchases (+9.4%) and refinancings (+9.2%). While refis hit a 12-week high, this was the highest purchases index since February 2023.
• As such it appears that there is some life returning to the mortgage market, though both purchases and refis are below levels seen both during the 2020-21 boom (indeed refis are currently 20% of those levels) and prior to the pandemic.
• The latest uptick appears to have been triggered by a pullback in mortgage rates, with 30Y conforming at a 13-week low 6.77% having fallen 16bp in the last month.
• Indeed the last time purchase applications were this high, 30Y conforming yields were 6.18%, with buyers taking advantage of what had fallen to what was at that time a 21-week low.
• Activity both then and now confirms sensitivity to mortgage rates, which at current levels continue to strain affordability.
• One additional note is that 30Y jumbos at 6.69% are trading inside regular rates by 8bp, the most since October 2023.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 217.54 points (0.49%) at 44458.3
S&P E-Mini Future up 37 points (0.59%) at 6309
Nasdaq up 192.9 points (0.9%) at 20611.34
US 10-Yr yield is down 5.9 bps at 4.3399%
US Sep 10-Yr futures are up 16/32 at 111-9
EURUSD down 0.0008 (-0.07%) at 1.1717
USDJPY down 0.11 (-0.08%) at 146.47
WTI Crude Oil (front-month) down $0.02 (-0.03%) at $68.31
Gold is up $11.12 (0.34%) at $3312.99

European bourses closing levels:
EuroStoxx 50 up 73.7 points (1.37%) at 5445.65
FTSE 100 up 12.84 points (0.15%) at 8867.02
French CAC 40 up 111.75 points (1.44%) at 7878.46

US TREASURY FUTURES CLOSE

3M10Y -6.145, -2.114 (L: -2.768 / H: 5.381) 
2Y10Y -2.211, 48.243 (L: 47.412 / H: 51.607)
2Y30Y -1.368, 101.603 (L: 100.772 / H: 104.547)
5Y30Y +0.324, 95.507 (L: 94.011 / H: 96.171)
Current futures levels:
Sep 2-Yr futures up 3/32 at 103-23.5 (L: 103-20.375 / H: 103-23.625)
Sep 5-Yr futures up 9/32 at 108-13.5 (L: 108-03.5 / H: 108-14.25)
Sep 10-Yr futures up 16/32 at 111-9 (L: 110-23.5 / H: 111-10)
Sep 30-Yr futures up 1-3/32 at 114-4 (L: 112-31 / H: 114-06)
Sep Ultra futures up 1-12/32 at 117-12 (L: 115-30 / H: 117-15)

MNI US 10YR FUTURE TECHS: (U5) Bear Cycle Remains In Play

• RES 4: 113-07   76.4% retracement of the Apr 7 - 11 bear leg
• RES 3: 112-23   High May 1 and key resistance
• RES 2: 112-12+/15 High Jul 1 / 61.8% of the Apr 7 - 11 sell-off
• RES 1: 111-28   High Jul 3 
• PRICE:‌‌ 111-09 @ 16:59 BST Jul 09
• SUP 1: 110-17   61.8% of the May 22 - Jul 1 bull leg      
• SUP 2: 110-10+ Low Jun 16
• SUP 3: 110-03   76.4% of the May 22 - Jul 1 bull leg
• SUP 4: 109-28   Low Jun 6 and 11 

Treasury futures maintain a softer short-term tone following the retracement that started Jul 1. Price has traded through support at the 50-day EMA, at 110-30+. This undermines a recent bull theme and paves the way for an extension lower near-term. Sights are on 110-17 next, a Fibonacci retracement point. A break would strengthen a bearish threat. Resistance to watch is at 111-28, the Jul 3 high.    

SOFR FUTURES CLOSE

Sep 25 +0.025 at 95.880
Dec 25 +0.040 at 96.175
Mar 26 +0.055 at 96.435
Jun 26 +0.055 at 96.655
Red Pack (Sep 26-Jun 27) +0.055 to +0.065
Green Pack (Sep 27-Jun 28) +0.065 to +0.075
Blue Pack (Sep 28-Jun 29) +0.070 to +0.075
Gold Pack (Sep 29-Jun 30) +0.080 to +0.085

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

• Secured Overnight Financing Rate (SOFR): 4.34% (+0.01), volume: $2.765T
• Broad General Collateral Rate (BGCR): 4.32% (+0.01), volume: $1.118T
• Tri-Party General Collateral Rate (TCR): 4.32% (+0.01), volume: $1.088T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $117B
• Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $262B

FED Reverse Repo Operation:

RRP usage climbs to $227.273B this afternoon from $219.415B yesterday, total number of counterparties at 37. Usage had fallen to $54.772B on Wednesday, April 16 -- lowest level since April 2021 - compares to yesterday's (July 1) $460.731B highest usage since December 31.

MNI PIPELINE: Corporate Bond Update: $11.25B NTT Finance 7-Pt Launched

NTT Finance 7-tranche debt issuance is the largest issuer since Mars issued $26B over 8 tranches on March 5. 

• Date $MM Issuer (Priced *, Launch #)
• 07/09 $11.25B #NTT Finance Corp: $1.25B 2Y +72, $1.5B 3Y +82, $500M 3Y SOFR+108, $2.5B 5Y +97, $500M 5Y SOFR+131, $2.5B 7Y +107, $2.5B 10Y +117
• 07/09 $3.75B #Romania $2B +5Y +185, $1.75B +10Y +230 (also E1.5B 2039 Tap +415)
• 07/09 $1.6B #Viper Energy $500M 5Y +100, $1.1B 10Y +140
• 07/09 $900M #Gulfstream Natural Gas System 10Y +125
• 07/09 $Benchmark Western-Southern 3Y +70
• Expected Thursday:
• 07/09 $500M World Bank 2030 Tap SOFR+43a
• 07/10 $2.25B Nissan Motor $750M Each: 5Y 7.25%a, 7Y 7.75%a, 10Y 8%a

MNI EGB BONDS: EGBs-GILTS CASH CLOSE: Gilt Curve Flattens As BOE Mulls QT

The multi-session rise in yields took a breather Wednesday, with Gitls outperforming Bunds.

• Yields dipped slightly at the open, picking up through the morning in contained fashion as market participants digested overnight tariff rate announcements from the US.
• But the rally proved short lived, with German and UK supply and upside in equities and oil prices capping gains.
• The Gilt curve edged flatter as BoE Governor Bailey reaffirmed the idea that the recent curve steepening will factor into the BoE's decision on QT.
• US Treasuries led a modest rally through the afternoon, as President Trump renewed calls to call for the Federal Reserve to cut rates.
• 10Y instruments remained confined within the prior session's ranges throughout. The UK curve twist flattened, with the German curve leaning bull steeper.
• Periphery/semi-core EGB spreads widened slightly, with OATs underperforming.
• Thursday's calendar includes varying industrial production data and final June inflation for some Eurozone countries, with appearances by ECB's Cipollone, Escriva, and Villeroy, and BOE's Breeden scheduled.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 1.2bps at 1.86%, 5-Yr is down 1.5bps at 2.239%, 10-Yr is down 1.4bps at 2.673%, and 30-Yr is down 1bps at 3.162%.
• UK: The 2-Yr yield is up 0.8bps at 3.88%, 5-Yr is down 0.1bps at 4.041%, 10-Yr is down 2.1bps at 4.612%, and 30-Yr is down 3.2bps at 5.422%.
• Italian BTP spread up 0.1bps at 85.1bps / French OAT up 1bps at 68.8bps  

MNI FOREX: USD Index Consolidates Corrective Move Higher

• A relatively subdued session for foreign exchange has allowed the greenback to consolidate its most recent recovery from multi-year trendline support, with the DXY hovering around 1.25% above the July 01 cycle lows.
• EURUSD tilts lower on the session, with the pair slipping back to the 1.1700 handle. The latest pullback in appears corrective, given the underlying bullish trend condition. Note too that corrections have been shallow so far, reinforcing the trend condition. Key short-term support to watch lies at 1.1646, the 20-day EMA.
• NZDUSD has also consolidated its recent pull lower, having printed below 0.5980 overnight following the RBNZ’s decision to hold the OCR at 3.25%. The pair continues to exert pressure on the 50-day EMA, of which spot has not closed below since April 09. Continued weakness would signal scope for a move towards 0.5883 and 0.5847 (double bottom seen in mid-May and an important pivot level).
• AUDNZD has also extended its recovery to a seven-week high above 1.0900. Trendline support drawn from the April lows has helped underpin the latest bounce for the cross, targeting 1.0922 (May 15 high) initially, before the early April highs just above 1.10.
• Separately, USDJPY is a touch lower on Wednesday, having notably reversed from the overnight highs of 147.18 and tracking around 146.45 as we approach the APAC crossover. USDJPY has lost all downside momentum for now and trending back towards the upper bound if its broader 142.00 - 148.00 range. The Market is long JPY and should the USD manage to extend its correction higher, this will further challenge the conviction of Yen longs.
• Thursday’s data calendar is highlighted by US jobless claims, before the focus turns to Canadian employment data on Friday.

THURSDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
10/07/2025	0600/0800	***	NO	CPI Norway
10/07/2025	0600/0800	**	SE	Private Sector Production m/m
10/07/2025	0600/0800	***	DE	HICP (f)
10/07/2025	0700/0900		EU	ECB Cipollone Digital Euro Lecture
10/07/2025	0800/1000	*	IT	Industrial Production
10/07/2025	-	***	CN	Money Supply
10/07/2025	-	***	CN	New Loans
10/07/2025	-	***	CN	Social Financing
10/07/2025	1230/0830	***	US	Jobless Claims
10/07/2025	1230/0830	**	US	WASDE Weekly Import/Export
10/07/2025	1400/1000		US	St. Louis Fed's Alberto Musalem
10/07/2025	1430/1030	**	US	Natural Gas Stocks
10/07/2025	1500/1600		GB	BOE Breeden On Climate Change
10/07/2025	1530/1130	**	US	US Bill 04 Week Treasury Auction Result
10/07/2025	1530/1130	*	US	US Bill 08 Week Treasury Auction Result
10/07/2025	1700/1300	***	US	US Treasury Auction Result for 30 Year Bond
10/07/2025	1715/1315		US	Fed Governor Christopher Waller
10/07/2025	1830/1430		US	Fed's Mary Daly at MNI