MNI US OPEN - France's Bayrou Expected to Be Ousted Today
EXECUTIVE SUMMARY
- JAPAN’S PM ISHIBA TO STEP DOWN, PAVING WAY FOR NEW LEADER
- BAYROU TO SPEAK AT 1400BST/1500CET; EXPECTED TO BE OUSTED
- US WEIGHS ANNUAL CHINA CHIP SUPPLY APPROVALS FOR SAMSUNG, HYNIX
- CHINA'S EXPORTS RISE 4.4% IN AUGUST, IMPORTS UP 1.3%
Figure 1: Markets likely partially priced for French fiscal deterioration
NEWS
JAPAN (BBG): Japan’s PM Ishiba to Step Down, Paving Way for New Leader
Japanese Prime Minister Shigeru Ishiba said he’ll step down following weeks of calls for his departure in the aftermath of a second national election setback, setting in motion a leadership race that threatens to unnerve investors. “Having seen the US trade negotiations through, I felt that now is the right time to stand down and give way to my successor,” Ishiba said at a press conference in Tokyo on Sunday. He will stay on as prime minister until his successor takes over.
FRANCE (MNI): Bayrou to Speak at 1400BST/1500CET; Expected to Be Ousted
French PM Bayrou is expected to be ousted by a no-confidence vote today. According to the National Assembly website, Bayrou will deliver a "general policy statement" at
1400BST/1500CET, after which a debate and vote will take place. That means the outcome of today's no-confidence vote will depend on Bayrou's (possibly lengthy) address, and the National Assembly's (possibly lengthy) debate. Looking at the time recent no-confidence vote results were published, there isn't an obvious trend to note. It's possible that the result won't be known until after the cash close.
US/CHINA (BBG): US Weighs Annual China Chip Supply Approvals for Samsung, Hynix
The US is proposing annual approvals for exports of chipmaking supplies to Samsung Electronics Co. and SK Hynix Inc.’s factories in China, a compromise aimed at preventing disruptions to the global electronics industry after Trump officials revoked Biden-era waivers that let the companies more easily get such shipments. Officials in the US Commerce Department last week presented to Korean counterparts a “site license” idea to supplant indefinite authorizations the chipmakers secured under the previous administration, according to people familiar with the matter. Those so-called validated end user, or VEU, designations are set to expire at the end of this year.
US (BBG): Fed Chair Finalist Hassett Backs ‘Mission Creep’ Criticism
Kevin Hassett, a top candidate for Federal Reserve chair, said the US central bank put its independence and credibility in jeopardy by expanding beyond its mandate. “The question is, has the current central bank been as independent as we would like, as transparent as we would like?” Hassett, a top White House economic adviser, said Sunday on CBS’ Face the Nation. “And I think there’s some dispute about that.”
EU/RUSSIA (BBG): EU Weighs New Sanctions on Russia to Hit Banks and Oil Trade
The European Union is exploring new sanctions on about half a dozen Russian banks and energy companies as part of its latest round of measures to pressure President Vladimir Putin to end the war against Ukraine. The package, which would be the bloc’s 19th since Moscow’s full-scale invasion in 2022, could also see the EU target Russia’s payment and credit card systems, crypto exchanges as well as further restrictions on the country’s oil trade, according to people familiar with the matter.
BOJ (MNI EXCLUSIVE): BOJ Vigilant Against JGB Steepening Risk
MNI looks at the BOJ's bond yield concerns. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
CHINA/JAPAN (BBG): Beijing Sanctions Japanese Lawmaker in First Over China Comments
China has sanctioned a Japanese member of parliament for the first time, a move that may inflame ties with Tokyo. Beijing imposed punitive measures including an entry ban on Hei Seki, a Chinese-born author elected to the upper house of Japan’s parliament in July. The Chinese Ministry of Foreign Affairs accused him of interfering in China’s internal affairs and undermining its sovereignty in a Monday statement.
TURKEY (MNI): Turkish Assets Fall as Police Blockade Opposition Istanbul HQ
Turkish police officers blocked access to the main opposition party’s Istanbul headquarters as a court appointee prepares to take over its local leadership. Republican People’s Party (CHP) officials called the blockade a “siege” and rallied supporters around the building on Sunday night. The police presence has remained in place as of Monday morning. As a reminder, former lawmaker Gursel Tekin was appointed as the CHP’s new provincial head last week after a court ruling removed the Istanbul leadership of the party over corruption allegations. The CHP has condemned Tekin’s appointment as illegal and said it won’t recognise any appointees. Tekin is expected to arrive at the headquarters around noon local time.
THAILAND (MNI): Thaksin Shinawatra En Route to Thailand, PM Anutin Takes Office
Former Prime Minister Paetongtarn Shinawatra confirmed that her father and Pheu Thai Party's (PTP's) de facto leader Thaksin Shiawatra would return to the country today ahead of an imminent court ruling on his '14th floor' case, as their rival Bhumjaithai Party (BJT) leader Anutin Charnvirakul received royal assent for his appointment to the position of Prime Minister. Thaksin's unexpected trip to Dubai last week triggered speculation that he might have been mulling an escape, but the veteran politician is on his way back to the country. His private jet is the most tracked flight on FlightRadar again and is scheduled to touch down in Bangkok within a few minutes.
INDONESIA (BBG): Indonesia Plans Finance Ministry Changes, Prompting Stocks Slump
Indonesian President Prabowo Subianto is set to announce changes to his cabinet, including the finance ministry, just days after violent demonstrations rocked the nation. Stocks and rupiah forwards erased earlier gains. No specific posts or replacements were announced in the brief statement made by State Secretary Prasetyo Hadi on Monday afternoon.
DATA
UK DATA (MNI): KPMG-REC Report on Jobs Shows Steepest Increase in Candidates Since Nov'20
The KPMG-REC Report on Jobs showed further labour market softening - the most notable of which was the "steepest upturn in candidate availability since November 2020." The report notes that this was driven by vacancies falling "sharply" again alongside redundancies. The availability of staff index has now moved above 70. The Report has been flagging that starting salaries have been increasing at below average rates for some time. For permanent employees the increase was the report notes it is the weakest in 4.5 years.
GERMANY DATA (MNI): Firmer July IP Carried by Manufacturing
- GERMANY JUL IND PROD +1.3% M/M
Industrial Production marginally stronger than expectations (1.3% M/M vs 1.0% cons), with the print being bolstered by a material June upward revision to -0.1% (from -1.9%). Remember that the weak June print was a contributor to the 0.2pp Q2 GDP downward revision to -0.3% Q/Q. Excluding construction and energy, (manufacturing) production does now indeed stand noticeably above cycle lows. However, for the total IP print, the picture looks less favourable: "The less volatile three-month on three-month comparison showed that production was 0.1% lower in the period from May 2025 to July 2025 than in the previous three months", Destatis comments.
GERMANY JUL TRADE BALANCE EUR +14.7 BLN (MNI)
GERMANY JUL EXPORTS -0.6% M/M; IMPORTS -0.1% M/M (MNI)
CHINA DATA (MNI): China's Aug Exports Up 4.4%, Imports Up 1.3%
- CHINA YTD TRADE SURPLUS +CNY56.42 TRLN
- CHINA AUG EXPORTS +4.4% Y/Y VS MEDIAN +5.4% Y/Y
- CHINA AUG IMPORTS +1.3% Y/Y VS MEDIAN +3.5% Y/Y
MNI (Beijing) China's exports increased 4.4% y/y in August, while imports rose 1.3%, data released by China Customs showed on Monday. Exports in August reached USD321.8 billion, up 4.4% y/y, slowing down from the prior month's 7.2% growth, and behind the forecasted 5.4%. Imports rose 1.3% in August, down from July's 4.1% rise and failed meeting the market consensus of a 3.5% increase. China’s trade surplus in August hit USD102.33 billion, larger than the consensus of USD99.3 billion, taking Jan-Aug’s final surplus to USD785.3 billion.
JAPAN DATA (MNI): Japan Q2 GDP Revised Up on Consumption
- JAPAN Q1 ANNUALIZED GDP REV 2.2%; PRELIM 1.0%; MEDIAN 1.2%
- JAPAN Q2 GDP REV 0.5% Q/Q; PRELIM 0.3%; MEDIAN 0.3%
Japan’s economy expanded faster in April–June than initially estimated, as stronger private consumption offset weaker capital investment, second preliminary GDP data from the Cabinet Office showed Monday. GDP rose 0.5% q/q, or an annualised 2.2%, up from the first estimate of 0.3% q/q, or 1.0% annualised. Private consumption, which makes up about 60% of GDP, was revised up to 0.4% from 0.2%, contributing 0.2 pp to growth instead of 0.1 pp. Capital investment increased 0.6% q/q, down from the initially reported 1.3%, with its contribution cut to 0.1 pp from 0.2 pp.
JAPAN DATA (MNI): Japan Aug Sentiment Index Rises for 4th Month
Japan’s Economy Watchers sentiment index rose for the fourth straight month in August, though the government maintained its overall assessment, data released Monday by the Cabinet Office showed. The index for current economic conditions climbed to a seasonally adjusted 46.7 from 45.2 in July, while the outlook index for two to three months ahead rose to 47.5 from 47.3. Indicators linked to households and businesses improved, but the labour market component fell. The outlook index for two to three months ahead also rose for the fourth straight month in August.
FOREX: JPY Weaker as Ishiba Resignation Opens Up Uncertainty
- JPY remains weaker against all others early Monday. For much of last week, markets were speculating over the chances of Ishiba in a potential LDP vote to
bring forward a party leadership election, but the PM has gotten ahead of any further uncertainty by announcing his resignation. So why is JPY weaker? Thatcherite MP Sanae Takaichi is a front-runner among many opinion polls - and also ran against Ishiba in the last leadership race, triggering JPY vol. While politically conservative, she's made clear her preference for easy monetary policy and a bigger role for fiscal spending - reminiscent of the Abenomics policy set from 2012 - 2020. - EUR/JPY rallied to 173.91 overnight, but has stalled since. 173.97 remains the bull trigger here, clearance of which puts the rate at the best levels since last year. AUD, NZD extend their recent spell of strength, with NZD/USD just below Friday's highs of 0.5918. A rally through here and 0.5927 would break downtrendline resistance drawn off the early July highs.
- Firmer equity sentiment since the open has allowed the likes of AUD and NZD to outperform in G10 currency markets on Monday, capitalising on the bearish dollar sentiment following the softer-than-expected US employment report. As a result, AUDUSD (+0.41%) has traded within one pip of the Friday highs and the latest price action has helped the pair consolidate above short-term resistance of 0.6569, which was cleared last week. This places the market’s interest back on the 0.66 handle, of which we have only had one daily close above since the US election related volatility back in November 2024.
- Focus this week remains on the US inflation picture, with PPI and CPI prints due on Wednesday and Thursday respectively. With a September Fed rate cut now all but assured - a weaker price turnout this week could trigger further speculation over an easing step of over 25bps at next week's committee meeting.
BONDS: 10-Year Gilt/Bund Spread Widens 1bp, Market Awaiting Fresh Cues
The 10-year Gilt/Bund spread is 1bp wider today at 199bps, amid a fairly subdued start to the weak. The spread reached a multi-month closing high of 203bps on August 27.
- Data hasn’t had a discernible impact on FI market pricing: German July industrial production was stronger-than-expected at 1.3% M/M (vs 1.0% cons; prior revised to -0.1% from -1.9% initial) while the September Euro Sentix survey was weak at -9.2 (vs -2.0 cons, -3.7 prior). In the UK, the KPMG-REC report on jobs continued to portray a softening labour market.
- The German curve has lightly twist flattened, but 5s30s is only 0.7bps flatter at 106.9bps.
- Meanwhile, Gilt yields are 0.5-1.5bps higher, with a bear flattening dynamic in play. UK 5s30s is hovering around trendline support drawn from the November 2024 low, currently at 144.9bps.
- Futures ranges have been tight, with Bunds -2 ticks at 129.07 and Gilts -4 ticks at 91.19.
- 10-year EGB spreads to Bunds are up to 1bp tighter, led by BTPs. The BTP/Bund spread is back at 83bps after testing 90bps last week.
- French PM Bayrou is expected to be ousted by a no-confidence vote this afternoon. Market prices may already incorporate an expectation for a new administration to make budget concessions, potentially limiting the scope for further OAT/Bund spread widening following the vote.
EQUITIES: Corrective Bear Cycle in Eurostoxx 50 Futures Remains in Play
A corrective bear cycle in Eurostoxx 50 futures remains in play. Recent weakness resulted in a breach of 5368.74, the 50-day EMA. The clear break of this average strengthens a short-term bearish threat and signals scope for a deeper retracement towards 5166.00, the Aug 1 low and a key support. On the upside, initial resistance to watch is 5378.06, the 20-day EMA. A clear break of it would be a bullish development. A bull cycle in S&P E-Minis remains intact and the latest pullback has once again proved to be a shallow correction. The contract traded to a fresh cycle high last week, breaching the Aug 28 high of 6523.00. This confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 6543.75 next, a Fibonacci projection. Initial support to watch is 6447.06, the 20-day EMA.
- Japan's NIKKEI closed higher by 625.06 pts or +1.45% at 43643.81 and the TOPIX ended 32.89 pts higher or +1.06% at 3138.2.
- Elsewhere, in China the SHANGHAI closed higher by 14.327 pts or +0.38% at 3826.841 and the HANG SENG ended 215.93 pts higher or +0.85% at 25633.91.
- Across Europe, Germany's DAX trades higher by 146.27 pts or +0.62% at 23747.65, FTSE 100 higher by 13.83 pts or +0.15% at 9223.21, CAC 40 up 13.66 pts or +0.18% at 7690.56 and Euro Stoxx 50 up 20.81 pts or +0.39% at 5339.49.
- Dow Jones mini up 88 pts or +0.19% at 45541, S&P 500 mini up 14.75 pts or +0.23% at 6504.25, NASDAQ mini up 83.25 pts or +0.35% at 23765.5.
Time: 10:00 BST
COMMODITIES: Last Week's Gains Reinforce Bullish Conditions for Gold
A bear cycle in WTI futures remains intact and the latest bull phase appears to have been a correction. The pullback from last Tuesday’s high highlights a possible reversal and the end of the corrective phase. Initial resistance to watch is $66.56, the Aug 4 high. Key short-term resistance has been defined at $69.36, the Jul 30 high. A stronger resumption of weakness would pave the way for a move towards $57.71, the May 30 low. Gold remains in a clear bull cycle and last week’s gains reinforce current conditions. The yellow metal has breached a key resistance at $3500.1, the Apr 22 high, delivering a fresh all-time high. The break also confirms a resumption of the primary uptrend and an extension of the sequence of higher highs and higher lows. The next objective is $3623.1, a Fibonacci projection. Initial firm support lies at $3440.0, the 20-day EMA.
- WTI Crude up $1.05 or +1.7% at $62.9
- Natural Gas up $0.1 or +3.15% at $3.142
- Gold spot up $24.34 or +0.68% at $3611.69
- Copper up $1.1 or +0.24% at $456.05
- Silver up $0.16 or +0.4% at $41.1771
- Platinum up $19.42 or +1.41% at $1398.84
Time: 10:00 BST
| Date | GMT/Local | Impact | Country | Event |
| 08/09/2025 | 1500/1100 | ** |  US | NY Fed Survey of Consumer Expectations |
| 08/09/2025 | 1530/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 08/09/2025 | 1530/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 08/09/2025 | 1900/1500 | * | US | Consumer Credit |
| 09/09/2025 | 2301/0001 | * |  GB | BRC-KPMG Shop Sales Monitor |
| 09/09/2025 | 0645/0845 | * |  FR | Industrial Production |
| 09/09/2025 | 0900/1000 | ** | GB | Gilt Outright Auction Result |
| 09/09/2025 | 1000/0600 | ** | US | NFIB Small Business Optimism Index |
| 09/09/2025 | 1150/1350 |  CH | SNB's Schlegel at BIS fireside chat | |
| 09/09/2025 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 09/09/2025 | 1515/1615 | GB | BOE Breeden Moderates BIS Fireside Chat | |
| 09/09/2025 | 1700/1300 | *** | US | US Note 03 Year Treasury Auction Result |
