EXECUTIVE SUMMARY
Fig 1: USD BBDXY Index & Nominal US 10yr Tsy Yield
Source: Bloomberg Finance L.P./MNI
UK
BOE (MNI BRIEF): The IMF needs to put the spotlight on countries running excessive deficits or surpluses, putting pressure on to tackle them, to lower the risk of nation states attempting to tackle them through tariffs and other trade restrictions which hit global growth, Bank of England Governor and Financial Stability Board head Andrew Bailey said in a speech.
MARKETS (BBG): " The UK’s Labour government will create a taskforce to help bring new listings to the London Stock Exchange, underscoring the concern around the lack of initial public offerings on the capital’s shrinking exchange."
GROWTH (BBG): "Chancellor of the Exchequer Rachel Reeves pledged to shake up post-crisis rules that are meant to shield consumers’ money from the vagaries of investment banking as the UK government looks to the finance sector to help spur economic growth."
EU
UKRAINE/RUSSIA (RTRS): “U.S. President Donald Trump said on Tuesday that Ukrainian President Volodymyr Zelenskiy should not target Moscow and that Russian President Vladimir Putin should agree to a ceasefire deal by a 50-day deadline or sanctions will kick in.” .
FRANCE (BBG): " French Prime Minister Francois Bayrou proposed scrapping two national holidays, part of a drastic effort to repair public finances that’s set to unleash a parliamentary backlash in the fall."
US
TARIFFS (BBG): “ President Donald Trump said he was likely to impose tariffs on pharmaceuticals as soon as the end of the month and that levies on semiconductors could come soon as well, suggesting that those import taxes could hit alongside broad “reciprocal” rates set for implementation on Aug. 1.”
FED (MNI): Federal Reserve Bank of Boston President Susan Collins said Tuesday the impact of tariffs may be lessened somewhat by an ability of firms to absorb lower profit margins, but added that an “actively patient” approach to monetary policy is appropriate amid uncertainty.
FED (MNI): Federal Reserve Bank of Dallas President Lorie Logan said Tuesday U.S. monetary policy is well positioned to hold tight for some time at modestly restrictive levels, but noted a potential scenario of softer inflation and a weakening labor market calling for lower rates fairly soon.
FED (MNI POLICY): The Federal Reserve system could face wide ranging reforms under a possible leadership of former governor Kevin Warsh, including a repurposing of its 12 regional reserve banks to focus on specific areas of research in which they might have a competitive advantage, people familiar with his thinking told MNI.
INFLATION (MNI BRIEF): U.S. CPI inflation accelerated to 0.287% in June from 0.1% the previous month as tariffs began to have an impact on consumer prices, and core inflation to 0.228% from 0.1%, meeting analyst expectations. Over the past 12 months, headline inflation rose to 2.7% from 2.4% and core to 2.9% from 2.8%, the Bureau of Labor Statistics said Tuesday.
CRYPTO (BBG): " House Republican leaders’ plan to pass three industry-backed crypto regulatory measures appeared to be back on course Tuesday night after President Donald Trump said he had convinced holdout conservatives to move forward with the legislation."
OTHER
CANADA (MNI BRIEF): Prime Minister Mark Carney told reporters Tuesday no country has been able to lift all U.S. tariffs, a shift from prior "elbows up" talk focused on removing every sanction on Canada that he had called a violation of an earlier trade deal.
BRAZIL (BBG): “The Office of the US Trade Representative on Tuesday opened an investigation into Brazil over its trade practices and whether they are unfairly restricting US exports to the country, a week after President Donald Trump threatened a 50% tariff on the country.”
CHINA/AUSTRALIA (YICAI): “China and Australia will jointly review their decade-old Free Trade Agreement to identify areas for improvement or expansion, while continuing to implement the existing agreement, according to a Memorandum of Understanding signed by Commerce Minister Wang Wentao and Foreign Affairs and Trade Secretary Jan Adams, Yicai.com reported.”
CHINA
CONSUMPTION (MNI BRIEF): China is launching targeted campaigns to boost consumption and create broader markets for global enterprises, while leading developing countries to participate in global industrial and supply chains, said vice premier He Lifeng, at the China International Supply Chain Expo in Beijing on Wednesday.
PBOC POLICY (NATIONAL BUSINESS DAILY): “The People’s Bank of China still has room for cuts in the reserve requirement ratio and interest rates, given low inflation, stable yuan and major economies’ rate-cutting cycle, said Sheng Songcheng, dean at the China Chief Economist Forum Institute.”
PROPERTY (BBG): “ China Vanke Co. is seeking to extend some of its domestic bank loans by as much as 10 years, according to people familiar with the matter, a move that could help the state-backed developer reduce liquidity risks.”
MNI: PBOC Net Injects CNY444.6 Bln via OMO Wednesday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY520.1 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY444.6 billion after offsetting the maturity of CNY75.5 reverse repo today, according to Wind Information.
MNI: PBOC Sets Yuan Parity Higher At 7.1526 Weds; +1.40% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 7.1526 on Wednesday, compared with 7.1498 set on Tuesday. The fixing was estimated at 7.1901 by Bloomberg survey today.
MARKET DATA
NEW ZEALAND JUNE NON RESIDENT BOND HOLDINGS 62.7%; PRIOR 61.9%
SOUTH KOREA JUNE UNEMPLOYMENT RATE 2.6%; MEDIAN 2.7%; PRIOR 2.7%
SOUTH KOREA JUNE EXPORT PRICE INDEX Y/Y -4.5%; PRIOR -2.6%
SOUTH KOREA JUNE IMPORT PRICE INDEX Y/Y-6.2%; PRIOR -5.1%
MARKETS
US TSYS: Asia Wrap - Quiet Session As Bonds Consolidate Overnight Move
The TYU5 range has been 110-08+ to 110-12+ during the Asia-Pacific session. It last changed hands at 110-11+, up 0-02 from the previous close.
Fig 1: 10-Year US Yield Hourly Chart
Source: MNI - Market News/Bloomberg Finance L.P
JGBS: Cash Bond Twist-Flattener, 40Y Rallies Strongly, 40Y Auction On July 23
JGB futures are weaker but off session lows, -8 compared to the settlement levels.
AUSSIE BONDS: Modestly Cheaper, June Jobs Data Tomorrow
ACGBs (YM -3.0 & XM -3.0) are cheaper with narrow ranges.
BONDS: NZGBS: Closed Near Session Bests With A Steeper Curve
NZGBs closed slightly mixed with a steepener 2/10 curve. Benchmark yields finished 1bp lower to 1bp higher.
FOREX: Asia FX Wrap - BBDXY Surges Above 1200, Can It Build On This ?
The BBDXY has had a range of 1206.31 - 1208.31 in the Asia-Pac session, it is currently trading around 1207, -0.05%. The BBDXY surged higher with US yields in response to the CPI print. “Today’s inflation print showed that tariffs are having an impact on core goods and that impact is likely to get larger from here, limiting how much the Fed can cut and boosting the dollar,” said a currency strategist at Barclays” - BBG
Fig 1: GBP/USD Spot hourly Chart
Source: MNI - Market News/Bloomberg Finance L.P
JPY: Asia Wrap - USD/JPY Is Not Backing Off, Eyes The 150.00 Area
The Asia-Pac USD/JPY range has been 148.71 - 149.18, Asia is currently trading around 149.10, +0.15%. USD/JPY surged higher overnight with US yields in response to the US CPI showing clear signs that tariffs are beginning to impact the core goods data. The USD/JPY relentless march higher has been pretty telling, challenging a market positioned the wrong way. This time USD/JPY has not given the JPY longs any respite and the powerful move back above 148.00 does not bode well. Dips should now be well supported in the short-term, will Asset Managers start paring back their extensive JPY longs now ? The first decent buy zone is now back towards the 147.00 area.
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
AUD: Asia Wrap - AUD/USD Finds Some Demand Towards 0.6500
The AUD/USD has had a range of 0.6512 - 0.6534 in the Asia- Pac session, it is currently trading around 0.6525, +0.18%. The USD has surged higher on the back of the US CPI showing clear signs that tariffs are beginning to impact the core goods data. US yields and the USD have both reacted as the market further reduces rate cut expectations for the year. This has seen currencies take a hit across the board, the AUD/USD has fallen quickly back to the lower end of its recent 0.6500/0.6600 range, its fortunes clearly tethered to the USD and if it can continue to pressure a short market then the AUD/USD could probe its support just below 0.6500. A Sustained break through this level opens up the potential for a further pullback towards the 0.6350 area.
Fig 1: AUD/USD spot Hourly Chart
Source: MNI - Market News/Bloomberg Finance L.P
NZD: Asia Wrap - NZD/USD Has Broken Support, Risk Is A Move Back To 0.5850
The NZD/USD had a range of 0.5944 - 0.5966 in the Asia-Pac session, going into the London open trading around 0.5945, +0.01%. The USD has surged higher on the back of the US CPI showing clear signs that tariffs are beginning to impact the core goods data. US yields and the USD have both reacted as the market further reduces its rate cut expectations for the year. NZD/USD has broken below its recent support just below 0.6000 and the price action now suggests we could have a look back towards the important 0.5850 support area. Look for supply now on bounces back towards 0.6000 to cap initially.
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
ASIA STOCKS: Taiwan, Indonesia Firmer, Philippines Down, Modest Shifts Elsewhere
Asian equities are trading in a mixed fashion so far in Wednesday trade. There is a modestly negative bias for US and EU futures as markets digest Tuesday's US CPI data. US Tsy yields are little changed so far today though. The best performer in the region has been Taiwan, while the Philippines bourse has fallen but close to 1.8%.
OIL: Modest Gain for Oil in Asia Today as Equities Mixed
Gold Posts Modest Gains in Asia Trading Day
Source: Bloomberg Finance LP / MNI
UP TODAY (TIMES GMT/LOCAL)
Date | GMT/Local | Impact | Country | Event |
16/07/2025 | 0600/0700 | *** | ![]() | Consumer inflation report |
16/07/2025 | 0800/1000 | *** | ![]() | HICP (f) |
16/07/2025 | 0900/1100 | * | ![]() | Trade Balance |
16/07/2025 | 1100/0700 | ** | ![]() | MBA Weekly Applications Index |
16/07/2025 | 1215/0815 | ** | ![]() | CMHC Housing Starts |
16/07/2025 | 1230/0830 | *** | ![]() | PPI |
16/07/2025 | 1230/0830 | *** | ![]() | PPI |
16/07/2025 | 1315/0915 | *** | ![]() | Industrial Production |
16/07/2025 | 1315/0915 | ![]() | Cleveland Fed's Beth Hammack | |
16/07/2025 | 1400/1000 | ![]() | Fed Governor Michael Barr | |
16/07/2025 | 1430/1030 | ** | ![]() | DOE Weekly Crude Oil Stocks |
16/07/2025 | 1800/1400 | ![]() | Fed Beige Book | |
16/07/2025 | 2230/1830 | ![]() | New York Fed's John Williams | |
17/07/2025 | 0130/1130 | *** | ![]() | Labor Force Survey |
17/07/2025 | 0600/0700 | *** | ![]() | Labour Market Survey |
17/07/2025 | 0900/1100 | *** | ![]() | HICP (f) |
17/07/2025 | 0900/1000 | ** | ![]() | Gilt Outright Auction Result |
17/07/2025 | - | ![]() | ECB Cipollone At G20 Meeting | |
17/07/2025 | 1230/0830 | *** | ![]() | Jobless Claims |
17/07/2025 | 1230/0830 | ** | ![]() | WASDE Weekly Import/Export |
17/07/2025 | 1230/0830 | * | ![]() | International Canadian Transaction in Securities |
17/07/2025 | 1230/0830 | *** | ![]() | Retail Sales |
17/07/2025 | 1230/0830 | ** | ![]() | Import/Export Price Index |
17/07/2025 | 1230/0830 | ** | ![]() | Philadelphia Fed Manufacturing Index |
17/07/2025 | 1230/0830 | *** | ![]() | Retail Sales |