MNI ASIA OPEN: Israel/Iran Armed Conflict on Hold For Now
EXECUTIVE SUMMARY
- MNI US CPI Preview: Monthly Moderation But Still Too High
- Fitch Lowers Global Sovereigns Sector Outlook on War Impact
- MNI BOC WATCH: Macklem Hold Seen With Two-Sided Future Risk
- MNI IRAN: Fars News: Halt to Armed Forces Operations is Announced
- MNI MIDEAST: Netanyahu: If Iran Resumes Attacks We Will Respond Forcefully
- MNI US DATA: NY Fed Inflation Expectations Remain Far Steadier Than U.Mich
US
MNI INTERVIEW: US Financial Stability Risks Mounting-Ghamami
Risks to the U.S. financial system are high and rising as the Iran energy shock exposes vulnerabilities like unprecedented growth in private credit and an increasingly debt-fueled boom in AI, former Fed and Treasury economist Samim Ghamami told MNI. “The combination of all these factors would tell me that the level of risk in the financial system in the U.S. and globally is high currently,” said Ghamami, who worked in the Treasury's Office of Financial Research, created after the Global Financial Crisis to monitor threats to stability.
CANADA
MNI BOC WATCH: Macklem Hold Seen With Two-Sided Future Risk
The Bank of Canada is seen maintaining a 2.25% policy rate Wednesday and keeping options open to hike, cut or hold in coming months depending on where oil prices and U.S. tariffs take inflation. With core CPI around 2% and the headline gauge gaining a bit less than the 3% officials had predicted for April, there's little need to advance a scenario mentioned at the last decision, which would have called for consecutive hikes to contain an energy-driven price surge. Canada has also avoided Governor Tiff Macklem's trigger for a cut around a major escalation of U.S. tariffs.
EUROPE
MNI ECB WATCH: ECB To Hike, Stay Data Dependent
The European Central Bank is set to raise its key deposit rate to 2.25% on Thursday, hiking for the first time since June 2025 amid a worsening outlook for both inflation and economic activity that is likely to see policymakers stick to their data-dependent, meeting-by-meeting approach.
NEWS
Fitch Lowers Global Sovereigns Sector Outlook on War Impact - Fitch changed its 2026 global sovereign sector outlook to “deteriorating” from “neutral,” citing the effects of the US-Iran war. “We expect the conflict will weaken GDP growth, raise inflation and bond yields, and heighten geopolitical risks. However, recent resilience of the global economy and financing conditions temper risks.”
MNI MIDEAST: Netanyahu: If Iran Resumes Attacks We Will Respond Forcefully
Israeli PM Benjamin Netanyahu has delivered a televised address, his first public comments since the exchange of fire between Iran and Israel that started on Sunday night. Select comments identified below:
- Netanyahu on the initial strikes in 2025 and Feb/March 2026: "We carried out a historic preemptive strike against Iran's efforts to acquire nuclear weapons. We neutralised this immediate threat and also took out Khamenei. If we had not acted in a timely and forceful manner, we would not be here today. And I emphasise once again that Iran will never acquire nuclear weapons."
- On the 2024 Lebanon war "We acted also against Hezbollah. Hezbollah planned to storm into the Galilee and destroy Israeli towns with 150,000 rockets. [...] We continue to remove all military infrastructure along the security zone, [...]. Iran and Hezbollah are weaker than ever, and we are stronger than ever, but our campaign against them is not yet over."
- On the past 24 hrs: "...Iran and Hezbollah tried to impose a new equation. This equation is unacceptable in that they will launch attacks from Lebanon and Iran on Israel, and that Israel will not respond. This will not happen, not on my watch [...]. I am adamant to maintain our right to respond to such attacks..."
- "I instructed the IDF to carry out attacks and strikes in Beirut, and after Iran attacked Israel, I instructed [them] to carry out attacks against military facilities in Iran... And after we did that, Iran stopped attacking us. If Iran makes the mistake and resumes its attacks against us, we will respond forcefully... I tell you, citizens of Israel, as I say to my friend President Trump, we will defend Israel [with] determination...and together we will bring back security to northern Israel".
MNI IRAN: Fars News: Halt to Armed Forces Operations is Announced
Fars News Agency – “a halt to the operations of the armed forces is announced” – full post: The Central Headquarters of the Seal of the Prophets (PBUH): Following the aggressions and evils of the brutal Zionist regime in southern Lebanon and the Dahiya region, which were carried out with the support of the criminal America, the powerful armed forces of the Islamic Republic of Iran, in support of the oppressed people of Lebanon, gave a painful response to this regime.
MNI MIDEAST: Israeli Def Min-Attacks On North Will Mean Renews Strikes On Beirut
Israel's N12 reports comments from Defence Minister Israel Katz, saying "The rule for Dahieh in Beirut is the same as the northern settlements", indicating that any Hezbollah attack on Israel's northern communities will result in renewed Israeli strikes on the southern suburbs of the Lebanese capital, which are a stronghold of support for Hezbollah. Katz adds, "We categorically reject Iran's threats. Any Iranian attempt to link Lebanon and Iran and attack Israel will be met with great force".
US TSYS
MNI US TSYS: Cease Fire Hopes Gradually Ablated
- Treasuries look to finish weaker for the most part, well off early highs after sentiment jumped on US/IRAN/Israel cease-fire hopes.
- Early "demand" by Pres Trump that Iran & Israel cease fire immediately cooled as saber rattling headlines emerge: "ISRAEL REJECTS IRAN’S WARNING NOT TO HIT LEBANON: KATZ" via Bbg.
- Treasuries reverse course to largely weaker again, low end of session range: TYU6 trades -2 at 109-00.5 vs. 108-25 overnight low - initial technical support. The bear trigger lies at 108-08+, the May 19 low. Clearance of this level would confirm a resumption of the downtrend.
- US equity indexes are running mixed at the moment, scaling off first half highs as US/Iran war de-escalation hopes started to fade. Currently, the DJIA is -.014%, SPX emini +.17% while the tech heavy Nasdaq gained 0.8%.
- WTI Crude ended higher following Iran-Israel strikes overnight and through Monday morning, though pared gains after Iran announced a halt to its military response. The ceasefire is likely to face fresh tests amid continued Israel/Hezbollah conflict in Lebanon. US data this week includes CPI on Wednesday, which is likely to reflect the impact of energy prices on inflation.
OVERNIGHT DATA
MNI US CPI Preview: Monthly Moderation But Still Too High
Monthly inflation is expected to moderate to a still elevated pace in May, with MNI unrounded consensus pointing to 0.51% M/M for headline CPI and 0.23% M/M for core CPI. It should see headline CPI jump further to 4.2% Y/Y with a risk of 4.3% (either strongest since Apr 2023) whilst core CPI would see a more modest acceleration to 2.8-2.9% Y/Y (strongest since Sep 2025).
MNI US DATA: NY Fed Inflation Expectations Remain Far Steadier Than U.Mich
The NY Fed consumer survey for May saw 1Y inflation expectations surprisingly soften and longer-term measures hold steady, continuing to undershoot the magnitude of the rise in inflation expectations seen in the U.Mich equivalent. 3Y expectations have only seen a modest increase during the ongoing Middle East conflict although remain above pre-pandemic levels for longer-term context.
- 1Y inflation expectations surprisingly dipped in May to 3.46% (cons 3.7, albeit from a survey of just three analysts) to reverse the rise to 3.64% in April after 3.42% in March. It compares with a 2019 average of 2.6% or 2017-18 average of 2.8%.
- 3Y inflation expectations were steady at 3.13% in May after 3.15% in April, 3.08% in March and a string of ~3.0% readings prior to the Middle East conflict. It compares with a 2019 average of 2.6% or 2017-18 average of 2.9%.
- 5Y inflation expectations were steady at 3.02% after 3.01% in April, 3.05% in March and also a string of readings averaging ~3.0% before the Middle East conflict. This series only started in 2022.
MNI US INFLATION: Analyst Expectations Of Key Sequential Drivers For May CPI Report
Energy inflation should see a similarly strong increase as in April but food might moderate after a strong April:
- Energy (small +ve to neutral): Energy prices are expected to show another strong increase of ~4.0% M/M (range 3.4-4.7%) after 3.8% M/M in April following the booming 10.9% M/M in March.
- Food (-ve): Expected to moderate to 0.3% M/M after a surprisingly strong 0.5% M/M in April, which had in turn been driven by the food at home category jumping 0.68% M/M (highest since Aug 2022) in a potential sign of passthrough from higher transportation and fertilizer costs.
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA down 46.73 points (-0.09%) at 50816.1
S&P E-Mini Future up 17.25 points (0.23%) at 7416.75
Nasdaq up 224 points (0.9%) at 25929.41
US 10-Yr yield is up 2.6 bps at 4.5562%
US Sep 10-Yr futures are down 2.5/32 at 109-0
EURUSD up 0.0011 (0.1%) at 1.1533
USDJPY down 0.06 (-0.04%) at 160.23
WTI Crude Oil (front-month) up $0.64 (0.71%) at $91.19
Gold is down $1.21 (-0.03%) at $4327.09
European bourses closing levels:
EuroStoxx 50 up 0.22 points (0%) at 6062.29
FTSE 100 up 5.15 points (0.05%) at 10373.2
German DAX down 142.83 points (-0.58%) at 24616.22
French CAC 40 down 18.95 points (-0.23%) at 8199.29
US TREASURY FUTURES CLOSE
Curve update:
3M10Y +2.212, 83.791 (L: 79.939 / H: 85.449)
2Y10Y +1.738, 39.652 (L: 36.778 / H: 39.927)
2Y30Y +2.704, 87.158 (L: 82.403 / H: 87.264)
5Y30Y +1.957, 74.453 L: 70.285 / H:74.677)
Current futures levels:
Sep 2-Yr futures up 0.125/32 at 102-31.5 (L: 102-28.75 / H: 103-01.75)
Sep 5-Yr futures down 0.75/32 at 106-18.75 (L: 106-12.75 / H: 106-24.25)
Sep 10-Yr futures down .5/32 at 109-0 (L: 108-25 / H: 109-09)
Sep 30-Yr futures down 12/32 at 111-12 (L: 111-06 / H: 112-00)
Sep Ultra futures down 19/32 at 113-22 (L: 113-20 / H: 114-14)
MNI US 10YR FUTURE TECHS: (U6) Outlook Remains Bearish
- RES 4: 111-02+ High Apr 24
- RES 3: 110-28+ High May 7
- RES 2: 110-05+ 50-day EMA
- RES 1: 109-19+/110-00+ 20-day EMA / High May 29
- PRICE: 108-30 @ 11:12 BST Jun 8
- SUP 1: 108-25 Intraday low
- SUP 2: 108-08+ Low May 19 and the bear trigger
- SUP 3: 108-04 1.382 proj of Apr 17 - May 4 - 7 swing
- SUP 4: 107-29 1.618 proj of the Apr 17 - May 4 - 7 price swing
Treasuries are trading lower today. The latest move down reinforces a M/T bearish theme and also potentially provides an early signal that the corrective cycle that started May 19, is over. Note that recent gains have allowed an oversold trend condition to unwind. Resistance to watch is 110-05+, the 50-day EMA. The bear trigger lies at 108-08+, the May 19 low. Clearance of this level would confirm a resumption of the downtrend.
SOFR FUTURES CLOSE
Current White pack (Jun 26-Mar 27):
Jun 26 -0.008 at 96.328
Sep 26 -0.015 at 96.185
Dec 26 -0.005 at 96.035
Mar 27 steady00 at 95.925
Red Pack (Jun 27-Mar 28) +0.005 to +0.015
Green Pack (Jun 28-Mar 29) -0.005 to +0.010
Blue Pack (Jun 29-Mar 30) -0.005 to -0.005
Gold Pack (Jun 30-Mar 31) -0.015 to -0.01
REFERENCE RATES
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 3.63% (+0.01), volume: $3.131T
- Broad General Collateral Rate (BGCR): 3.61% (+0.02), volume: $1.304T
- Tri-Party General Collateral Rate (TCR): 3.61% (+0.02), volume: $1.265T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 3.62% (+0.00), volume: $117B
- Daily Overnight Bank Funding Rate: 3.62% (+0.00), volume: $254B
FED Reverse Repo Operation
RRP usage at $1.832B with 16 counterparties this afternoon vs. $0.761B Friday. Compares to last year's highest excess liquidity measure: $460.731B on June 30.
MNI PIPELINE: Corporate Bond Update: $2B CIBC & $1.75B Intuit Debt Launched
$8.5B Corporate debt issued on the day:
- Date $MM Issuer (Priced *, Launch #)
- 06/08 $2B #CIBC $1B each: 3NC2 +57, 6NC5 +77
- 06/08 $1.75B #Intuit $750M 5Y +70, $1B 10Y +100
- 06/08 $1.5B #Dominion Energy $1B 30.5NC5.25 6.15%, $500M 30.5NC10.5 6.25%
- 06/08 $1B #Equitable America Global Unding 5Y +85
- 06/08 $1B #GM 5Y +85
- 06/08 $750M #Jackson Financial+10Y +162.5
- 06/08 $500M #Blue Owl Cr 5Y +255
- Later this week:
- 06/09 $Benchmark EIB 7Y SOFR+39a
- 06/09 $Benchmark Kommuninvest 1.75Y SOFR+20a
EGBS
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is up 1.4bps at 2.706%, 5-Yr is up 2.1bps at 2.789%, 10-Yr is up 2.2bps at 3.06%, and 30-Yr is up 2.2bps at 3.593%.
- UK: The 2-Yr yield is up 4bps at 4.378%, 5-Yr is up 4bps at 4.504%, 10-Yr is up 4bps at 4.943%, and 30-Yr is up 3.6bps at 5.624%.
- Italian BTP spread vs Bunds is up 1.1bps at 77.4bps
MNI FOREX: USD Off Highs, NZD & SEK Modest Outperformers Amid Equity Recovery
- Major equity benchmarks have been edging higher on Monday, recovering from the sharp declines following last week’s US employment report and ensuing risk off. This dynamic has placed the USD under modest pressure to start the week, and the higher beta plays such as NZD (+0.36%) and SEK (+0.32%) are the best performers across the G10 FX space.
- Overall, the USD index is holding close to 100 and is within close range of the year’s best levels just above the 100.50. Greenback optimism reflects the market digesting the plethora of firmer US data in recent weeks, while uncertainty surrounding the ceasefire negotiations in the Middle East continue to keep energy prices elevated.
- Downside EURUSD momentum stalled at 1.1500 today and spot has recovered to the 1.1540 region ahead of the APAC crossover. Overall, the recent close below 1.16 and extension of weakness has confirmed the recent underlying bearish trend. The pair has spent the majority of the session trading below the bear channel base, which intersects at 1.1541. The downside focus now turns to 1.1411 which remains the key support, the March 13 and 16 lows.
- Today’s GBPUSD low print came within 3 pips of the next key support at 1.3303, the May 18 low. Clearance of this price point would strengthen a bearish threat and pave the way for an extension towards initial targets of 1.3212 and 1.3159. June 18 remains a pivotal data for GBP, given it is the BOE meeting and the Makerfield by-election and the associated potential to stoke political and fiscal uncertainty in the UK.
- Elsewhere, overnight highs in USDJPY of 160.39 mean the pair has further narrowed the gap to key resistance of 160.72, the pre-intervention highs reached on April 30. Spot has subsequently drifted back to 160 as intervention worries remain present.
- China trade, German IP and US trade balance and existing home sales highlight the tier-two releases on Tuesday, before Wednesday’s US CPI release and BOC decision.
TUESDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 09/06/2026 | 0600/0800 | ** |  DE | Trade Balance |
| 09/06/2026 | 0600/0800 | ** | DE | Industrial Production |
| 09/06/2026 | 1000/0600 | ** |  US | NFIB Small Business Optimism Index |
| 09/06/2026 | - | *** |  CN | Trade |
| 09/06/2026 | 1200/0800 | * | US | NY Fed SOFR |
| 09/06/2026 | 1215/0815 | *** | US | ADP Employment Report |
| 09/06/2026 | 1230/0830 | ** | US | Trade Balance |
| 09/06/2026 | 1230/0830 | ** | US | Trade Balance |
| 09/06/2026 | 1230/0830 | ** |  CA | International Merchandise Trade (Trade Balance) |
| 09/06/2026 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 09/06/2026 | 1300/0900 | * | US | NY Fed EFFR |
| 09/06/2026 | 1400/1000 | *** | US | NAR existing home sales |
| 09/06/2026 | 1400/1000 | ** | US | Wholesale Trade |
| 09/06/2026 | 1400/1000 | ** | US | Wholesale Trade |
| 09/06/2026 | 1530/1130 | ** | US | US Treasury Auction Result for 52 Week Bill |
| 09/06/2026 | 1700/1300 | *** | US | US Note 03 Year Treasury Auction Result |
| 09/06/2026 | - |  EZ | European Central Bank Meeting | |
| 09/06/2026 | - | CA | Bank of Canada Meeting | |
| 10/06/2026 | 0130/0930 | *** | CN | CPI |
| 10/06/2026 | 0130/0930 | *** | CN | Producer Price Index |
