EXECUTIVE SUMMARY
US
MNI SECURITY: US Evacuation of Baghdad Embassy Supportive for Crude
The US embassy in Baghdad is readying for an evacuation amid rising regional security tensions, likely linked to concerns over failed nuclear talks with Iran, Reuters reported. Iran threatens to target US. bases if nuclear talks fail, heightening fears of military conflict, Reuters said.
MNI FED: Trump Admin Reiterates Calls For Rate Cuts After CPI
Unsurprisingly, the Trump administration has taken to social media calling for Fed rate cuts since the CPI data crossed: President Trump posted the following on Truth Social: “PI JUST OUT. GREAT NUMBERS! FED SHOULD LOWER ONE FULL POINT. WOULD PAY MUCH LESS INTEREST ON DEBT COMING DUE. SO IMPORTANT!!!”
MNI US: Bessent Says "Rebalancing" Between US And China Is Possible
US Treasury Secretary Scott Bessent said in his opening address: “…Treasury has just completed its most successful tax filing season in years—and we did so while improving efficiencies and cutting costs at the IRS.” Bessent noted that, “April receipts this year were up 9.5% over the previous year. And receipts in May were up 14.7% over the previous year... against the backdrop of one of the most consequential tax proposals ever to come before Congress,” referring to the One Big Beautiful Bill.
NEWS
MNI TARIFFS: New US-China "Deal" Rates Look Like May 12 Figures Maintained
There isn't enough detail in the Trump announcement on social media to determine what the 55% tariff on China refers to. It could be interpreted as: 10% reciprocal tariff + 20% IEEPA tariff, plus the Section 301 tariffs which were pre-existing on some products which went up to 25% for a max 55% rate.
MNI US-CHINA: China VP-Two Sides Should Safeguard 'Hard Won Outcome' From Talks
Reuters reporting comments from Chinese Vice Premier He Lifeng, who led China's delegation in the talks with the US that took place in London over 9-10 June. VP says: "China's stance on trade issues with the US is clear and consistent." Says that the "Two sides should enhance consensus, strengthen cooperation, and jointly safeguard the hard-won outcome from the dialogues." He Lifeng: China and US "should maintain communication" and "push for table and long-term China-US trade and economic ties." The VP says "China is sincere in trade and economic consultations, but has its principles."
MNI JAPAN: PM Denies 'Cash Handouts' As Oppo. Seen To Back Off From No Conf. Motion
Speaking as part of the final leaders' debate of the current session of the House of Representatives, PM Shigeru Ishiba counters recent reports about the prospect of cash handouts ahead of the House of Councillors election due by late July. Reuters reports Ishiba saying that it is "not true that the gov't is currently considering providing cash handouts" and that people "should be cautious about any plans that would deteriorate already tattered state finances."
MNI ISRAEL: Haredi Parties Key To Possible Gov't Ouster; US Spker To Address Knesset
Tzvi Joffre at Unpacked posts on X: "Several meetings are ongoing now in an attempt to prevent the Haredim from voting in favor of dissolving the Knesset and sparking elections. Reportedly, the efforts now are focused on trying to put together a list of principles for a draft law that would satisfy the Haredim and also get approval from the AG and courts."
US TSYS
MNI US TSYS: Extending Late Session Highs: ME Risk Adds to Soft CPI Support
OVERNIGHT DATA
MNI US DATA: CPI Dispersion Metrics Point To Only Mild Uptick For Core Goods
Taking a step back, dispersion metrics of CPI inflation saw a mild uptick with 33% of ~190 items in the overall basket growing in excess of 3% Y/Y vs 29% in April. It’s the highest since February and before that May 2024, with the share having bottomed out at 28% in December. For context, it averaged 24% in 2019 or 19% in 2015-19.
MNI US DATA: Headline CPI Comes In Soft, But No Thanks To Food And Energy
Headline inflation came in below-expected at 0.08% M/M (0.20% MNI median) - but this was due entirely to the downside miss in core items. Food prices rose 0.29% (-0.08% prior, 0.20% median) with energy down 1.0% M/M (Corrected from earlier bullet) (-1.2% median, 0.7% prior).
MNI US DATA: CPI Services Surprise Softer For Both Rents and Supercore
Supercore below all six estimates seen beforehand:
Rental inflation also below any analyst estimate we'd seen, especially for primary rents.
MNI US DATA: Widespread Downside Surprises In Core Categories
Driving the lower-than-expected core CPI readings: pretty much every major category, with surprising deflation in core goods prices (-0.54%, led by used and new vehicles and apparel, vs +0.06% in April), with core services also on the soft side at 0.17% (0.29% April) - shelter and airfares the major downside surprises. See table:
MNI US DATA: Mortgage Applications Jump Despite Steady Rates
Weekly MBA mortgage applications jumped 12.5% W/W in the Jun 6 week, fully reversing the 3.9% drop a week earlier. That jump moves the composite index back to levels it hasn't seen since early April, after which rising mortgage rates dampened demand.
MNI CANADA DATA: April Building Permits Lowest Since June 2024 On Housing
Building permits fell to lowest since last June, -6.6% in April to CAD11.7B, as multi-family residential units in British Columbia posted declines. Residential permits in April -12% to CAD 7.4B after from a peak of CAD9.1B in Dec 2024. Consumer confidence has been hit by U.S. trade war.
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA down 8.88 points (-0.02%) at 42857.59
S&P E-Mini Future down 20.5 points (-0.34%) at 6024.75
Nasdaq down 105.2 points (-0.5%) at 19609.78
US 10-Yr yield is down 5.7 bps at 4.4124%
US Sep 10-Yr futures are up 14.5/32 at 110-21
EURUSD up 0.0058 (0.51%) at 1.1483
USDJPY down 0.26 (-0.18%) at 144.61
WTI Crude Oil (front-month) up $2.84 (4.37%) at $67.82
Gold is up $23.67 (0.71%) at $3347.27
European bourses closing levels:
EuroStoxx 50 down 22.23 points (-0.41%) at 5393.15
FTSE 100 up 11.27 points (0.13%) at 8864.35
German DAX down 38.66 points (-0.16%) at 23948.9
French CAC 40 down 28.43 points (-0.36%) at 7775.9
US TREASURY FUTURES CLOSE
3M10Y -7.307, 5.339 (L: 4.351 / H: 14.272)
2Y10Y +2.368, 47.126 (L: 44.381 / H: 48.49)
2Y30Y +6.074, 96.591 (L: 90.115 / H: 97.604)
5Y30Y +5.876, 89.881 (L: 82.038 / H: 90.188)
Current futures levels:
Sep 2-Yr futures up 4.375/32 at 103-20.5 (L: 103-12.5 / H: 103-20.75)
Sep 5-Yr futures up 10.5/32 at 108-1 (L: 107-14.25 / H: 108-01.75)
Sep 10-Yr futures up 14.5/32 at 110-21 (L: 109-28 / H: 110-23)
Sep 30-Yr futures up 22/32 at 113-8 (L: 111-30 / H: 113-13)
Sep Ultra futures up 19/32 at 116-14 (L: 115-00 / H: 116-25)
MNI US 10YR FUTURE TECHS: (U5) Bearish Threat Still Present
The recent reversal in Treasury futures was partially erased Wednesday on the back of the soft US CPI print, keeping markets cognizant of the underlying bullish theme for Treasury prices. Key short-term resistance remains 111-14+, a Fibonacci retracement and the Jun 5 high. Clearance of this hurdle would be bullish. First resistance at the 110-19+ 50-day EMA has been pierced. Any extension lower would expose support at 109-26, the May 29 low, where a break would open key support and the bear trigger, at 109-12+, the May 22 low.
SOFR FUTURES CLOSE
Jun 25 +0.010 at 95.688
Sep 25 +0.050 at 95.90
Dec 25 +0.075 at 96.165
Mar 26 +0.080 at 96.380
Red Pack (Jun 26-Mar 27) +0.075 to +0.085
Green Pack (Jun 27-Mar 28) +0.070 to +0.075
Blue Pack (Jun 28-Mar 29) +0.065 to +0.070
Gold Pack (Jun 29-Mar 30) +0.045 to +0.060
REFERENCE RATES (PRIOR SESSION)
US TSYS: Repo Reference Rates
STIR: FRBNY EFFR for prior session:
FED Reverse Repo Operation
RRP usage climbs to $204.625B this afternoon from $182.725B yesterday, total number of counterparties at 46. 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: Corporate Bond Update: $1.2B Citadel Securities 2Pt Launched
MNI BONDS: EGBs-GILTS CASH CLOSE: Early Steepening Holds After Soft US CPI
European curves steepened modestly Wednesday.
Closing Yields / 10-Yr EGB Spreads To Germany
MNI FOREX: Softer-Than-Expected US Inflation Data Weighs on Greenback
THURSDAY DATA CALENDAR
Date | GMT/Local | Impact | Country | Event |
12/06/2025 | 0600/0700 | ** | ![]() | UK Monthly GDP |
12/06/2025 | 0600/0700 | ** | ![]() | Trade Balance |
12/06/2025 | 0600/0700 | ** | ![]() | Index of Services |
12/06/2025 | 0600/0700 | *** | ![]() | Index of Production |
12/06/2025 | 0600/0700 | ** | ![]() | Output in the Construction Industry |
12/06/2025 | 0900/1100 | ![]() | ECB Schnabel Visits "House of the Euro" | |
12/06/2025 | 1200/1400 | ![]() | ECB de Guindos At Financial Integration Conference | |
12/06/2025 | 1220/1420 | ![]() | ECB Schnabel At Financial Integration Conference | |
12/06/2025 | 1230/0830 | *** | ![]() | Jobless Claims |
12/06/2025 | 1230/0830 | ** | ![]() | WASDE Weekly Import/Export |
12/06/2025 | 1230/0830 | * | ![]() | Household debt-to-income |
12/06/2025 | 1230/0830 | *** | ![]() | PPI |
12/06/2025 | 1400/1000 | * | ![]() | Services Revenues |
12/06/2025 | 1415/1615 | ![]() | ECB Elderson At Senior Supervisors Conference | |
12/06/2025 | 1430/1030 | ** | ![]() | Natural Gas Stocks |
12/06/2025 | 1530/1130 | * | ![]() | US Bill 08 Week Treasury Auction Result |
12/06/2025 | 1530/1130 | ** | ![]() | US Bill 04 Week Treasury Auction Result |
12/06/2025 | 1600/1200 | *** | ![]() | USDA Crop Estimates - WASDE |
12/06/2025 | 1700/1300 | *** | ![]() | US Treasury Auction Result for 30 Year Bond |
13/06/2025 | 2301/0001 | ** | ![]() | KPMG/REC Jobs Report |
13/06/2025 | 0430/1330 | ** | ![]() | Industrial Production |