MNI US OPEN - US & Iran Expected to Continue Peace Talks
EXECUTIVE SUMMARY
- US SAYS IRAN TALKS TO CONTINUE DESPITE HORMUZ SKIRMISHES: BBG
- ANDY BURNHAM ON TRACK TO BE NEXT PM AS MOST LABOUR MPS BACK HIM
- JAPAN’S TOP PENSION FUND LIKELY TO BRUSH OFF POLITICAL PRESSURE
- DOWNSIDE SURPRISE TO NORWAY HEADLINE CPI; QUESTION MARKS OVER AUGUST HIKE
Figure 1: Close below 20-day EMA would be key for the USD Index
Source: MNI, Bloomberg Finance L.P.
NEWS
US/IRAN (BBG): US Says Iran Talks to Continue Despite Hormuz Skirmishes
Talks between the US and Iran over a permanent peace deal are continuing, according to a American official, despite two days of clashes that threatened to shatter an already fragile ceasefire. The US is still committed to finding a diplomatic solution with Iran, the official said Thursday, declining to be named discussing sensitive matters. The official described the ongoing discussions as technical talks. The comments are likely to ease fears of a return to all-out war after the US launched strikes on Iranian military targets this week, retaliating against attacks on ships in the Strait of Hormuz. Iran hit back at US bases in the region, including in Kuwait and Bahrain.
US (MNI): Bipartisan Housing Bill to Become Law at Midnight Barring Trump Intervention
The 21st Century ROAD to Housing Act, an overwhelming bipartisan housing deregulation bill, will become law at midnight Friday, unless President Donald Trump vetoes the legislation or signs it first. If Trump vetoes the bill, Republican lawmakers would be forced into a tricky decision to uphold their votes and override the veto. House Speaker Mike Johnson (R-LA) transmitted the bill to Trump on June 29, triggering a 10-day countdown to the bill becoming law, after the President torpedoed the bill, citing the Senate's inaction on the SAVE America Act and claiming the legislation is "of minor importance compared to lower interest rates." With Democrats framing the midterm elections around ‘cost of living’, the housing bill would be valuable for Republicans to tout on the campaign trail. GOP midterm concerns are compounded by Trump’s net -43.4% approval on inflation - by far his weakest issue - according to Silver Bulletin.
FED (MNI INTERVIEW): Fed Could Soon Lean Toward Rate Hikes - Giannoni
MNI interviews former Dallas Fed research director on monetary policy Marc Giannoni. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
MIDEAST (BBG): UAE’s Oil Output Hit Record High in June, IEA Says
The United Arab Emirates boosted crude oil production to an all-time high last month, the most compelling evidence yet of how Abu Dhabi responded more boldly than any of its Persian Gulf neighbors to disruption caused by the Iran war. The country pumped 4.1 million barrels a day on average in June, the International Energy Agency said in its monthly report. That surpasses the peak daily output 4 million a day in 2020 when the country had boosted supply during a brief price war with the Saudi Arabia over OPEC+ policy, and follows its exit from OPEC.
ECB (BBG): Stournaras Sees ECB ‘Back to Square One’ on Inflation Prospects
The euro area might have seen better growth and inflation prospects than predicted if Middle East hostilities hadn’t resumed, European Central Bank policymaker Yannis Stournaras said. The Bank of Greece governor, speaking at an event in Athens on Friday, described how a halt to the war last month prompted an unexpected drop in oil prices, with a corresponding slowdown in headline inflation. “These developments, if sustained, could have led to higher growth and lower inflation compared to previous forecasts,” Stournaras said. “Hostilities started again, so we are back to square one.”
UK (The Times): Andy Burnham on Track to Be Next PM as Most Labour MPs Back Him
Andy Burnham has all but succeeded in his bid to become prime minister without a Labour leadership contest by winning the support of 322 MPs. The former Greater Manchester mayor was just one nomination short of ensuring he will be the only candidate, given a rival would need all remaining 81 votes of Labour’s 403 MPs. He is still certain to emerge as Sir Keir Starmer’s successor, as previously mooted contenders swung behind him, including Angela Rayner and Wes Streeting.
FRANCE (MNI): PS Opts for Narrow Primary, Risking Splits in Centre-Left Pre-2027
Members of the centre-left Socialist Party (PS) voted against a proposal from the party's First Secretary, Olivier Faure, on 9 July, regarding the process of picking a candidate for the 2027 presidential election. Faure had sought to bring about a wide-ranging primary that any supporters of the centre-left could enter for a two-euro fee, with a broad field of candidates intended to boost the bloc's chances in the first round. However, PS members backed the alternative, which only allows candidates from the PS and "parties recognising themselves as part of the socialist bloc," such as prominent MEP Raphael Glucksmann's Place Publique, to run and only PS party members to cast a ballot.
JAPAN (BBG): Japan’s Top Pension Fund Likely to Brush Off Political Pressure
Japan’s biggest public pension fund will likely ignore Finance Minister Satsuki Katayama’s call to boost domestic investment, at least in the short run, because of strict rules governing asset allocation and its public mandate. Katayama sparked a jump in the yen on Friday when she said the government would pursue policies to encourage pension funds to buy more Japanese assets. The Government Pension Investment Fund, one of the world’s largest, follows a rigid investment framework that is reviewed only once every five years. At its latest review, completed in 2025, the fund maintained its equal 25% allocation across four asset classes: domestic stocks, foreign stocks, domestic bonds and foreign bonds. The next scheduled review is in 2030.
JAPAN (MNI EXCLUSIVE): Weak Yen Adds Risk to BOJ's Policy Direction
MNI discusses the BOJ's concerns on the direction of policy. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
PERU (MNI): BCRP Stays on Hold as Expected, Flags El Niño Risks
The BCRP left its reference rate unchanged at 4.25% for a tenth consecutive meeting last night, as was widely expected. The accompanying policy statement struck a similar tone, maintaining the data dependent stance and giving no explicit guidance. However, the Board did sound more cautious on El Niño risks and geopolitical tensions, which it said, “could have more persistent effects on inflation”. Although the BCRP seems set to remain on hold for now, some analysts still see risks of a hike later this year.
DATA
UK DATA (MNI): Footfall Drops Further on June Heatwave, Remaining Subdued
BRC footfall (released overnight) fell further in June, decreasing 3.4% Y/Y, down from -2.6% in May. Record June heat and still subdued consumer confidence are highlighted as drivers by the BRC. The ONS's footfall series also showed Y/Y growth becoming more negative. Declines in footfall may not fully feed through to retail sales as, like in May, warmer temperatures could have boosted sales for some furniture/household appliance categories. Furthermore, Amazon Prime Day sales were held in June rather than July (as last year) which may have both contributed to the reduction in footfall but also potentially boosted retail sales.
FRANCE DATA (MNI): June Final HICP Revised Down 0.02ppt vs Flash
- FRANCE JUN FINAL HICP 2.0% Y/Y (2.0% FLASH, 2.8% MAY)
- FRANCE JUN HICP -0.3% M/M (-0.3% FLASH, 0.1% MAY)
- FRANCE JUN NATIONAL CPI 1.8% Y/Y (1.8% FLASH, 2.4% MAY)
- FRANCE JUN NATIONAL CPI -0.3% M/M (-0.2% FLASH, 0.1% MAY)
- FRANCE JUN NAT CPI SERVICES 1.9% Y/Y (1.8% FLASH, 2.1% MAY)
France final June HICP was unrevised from flash on a rounded basis, seeing a 0.02ppt downward revision to stand at 2.02% Y/Y in the final reading (2.80% May, 2.48% Apr), keeping it around 0.3ppt softer than pre-flash consensus. National CPI saw also saw a -0.02ppt revision to 1.76% Y/Y (2.42% May, 2.16% Apr). The largest downward revisions were seen in manufactured products and energy, mostly offset by a 0.1ppt upward revision to services CPI. Energy CPI was revised -0.14ppt to 11.02% Y/Y (16.57% May, 14.29% Apr). The press release confirms the slowdown in headline CPI is "explained by the sharp deceleration in energy prices".
GERMANY JUN FINAL HICP 2.4% Y/Y (2.4% FLASH, 2.7% MAY) (MNI)
GERMANY JUN HICP -0.2% M/M (-0.2% FLASH, -0.1% MAY) (MNI)
GERMANY JUN NATIONAL CPI 2.3% Y/Y (2.3% FLASH, 2.6% MAY) (MNI)
GERMANY JUN NATIONAL CPI -0.3% M/M (-0.3% FLASH, -0.2% MAY) (MNI)
NORWAY DATA (MNI): Downside Surprise to Headline CPI; Question Marks Over August Hike
Headline CPI surprised by 0.4ppt to the downside at 2.7% Y/Y. Initial drivers appear to be "foods and non-alcoholic beverages" at 2.3% Y/Y (from 3.4% Y/Y), transport (1.7% Y/Y from 2.6% Y/Y), "Information and communication" (1.8% Y/Y from 5.7%), "Recreation, sport and culture (3.0% from 3.8%) and "Personal care, social protection and misc goods (-2.4% Y/Y from -1.5%). Regarding the "Information and communication" division - note that in the May release there was a surprisingly strong 13.5% M/M print in "08.1.3 Information processing equipment" - so this looks as though it may have been reversed. Overall, we would still describe this as a soft print and market pricing may well flip from being slightly in favour of an August hike to a slightly lower probability. However, we think the market will wait for the CPI-ATE release to reflect the full move.
JAPAN DATA (MNI): Japan June CGPI Rises 7.1% Y/Y; Import Price Rises
- JAPAN JUNE CORP GOODS PRICE INDEX +7.1% Y/Y; MAY +6.6%
- JAPAN JUNE CORP GOODS PRICE INDEX +0.4% M/M; MAY +1.1%
Japan's corporate goods price index rose 7.1% y/y in June, the fastest pace since March 2023's 7.4%, accelerating from May's revised 6.6%, Bank of Japan data released on Friday showed. Import prices, measured in yen terms, rose 29.7% y/y in June, the highest since October 2022's 42.3% increase and the seventh consecutive monthly gain, accelerating from May's revised 26.1%, reflecting higher crude oil prices. The rise in the CGPI was driven by petroleum and coal products, which increased 22.8% y/y from 13.7% in May, and lumber and wood products, which accelerated to 8.0% from 6.1%.
FOREX: USDJPY Volatile Overnight, USD Index Threatens Close Below 20-Day EMA
- The dollar tilts marginally lower again on Friday owing to another dip lower for crude futures and slightly lower US yields on the session. The aggressive move south for USDJPY overnight prompted the DXY to break out of its contained range this week, and print a 100.60 low which closely coincides with the lows from last week.
- Subsequently, we have moved back into the prior 100.80-101.20 range. This consolidating price action keeps 20-day EMA support intact on a closing basis, and the bullish trend in place for now.
- USDJPY volatility was stoked by comments from Finance Minister Satsuki Katayama, who said the government wants to encourage pension funds, including the Government Pension Investment Fund, to increase investment in domestic financial assets.
- USDJPY fell from levels around 162.40 to session lows of 161.29, before slowly grinding back to current levels around 161.70. Overall, a bullish theme remains firmly intact and key support is not seen until 160.39, the 50-day EMA.
- Alongside the contained price action for the dollar overall, EURUSD has had an extremely slow week trading within a 70pip range. While a short-term corrective cycle is in play, and there have been technical threats of a stronger recovery, a bearish trend condition remains intact overall, bolstered by some notable weakness in the crosses. We have flagged the recent medium-term breakdown for EURGBP through 0.8610, and a lower low in every session this week underscores the bearish momentum.
- Elsewhere, AUDNZD continues its weakening trend overnight, falling as low as 1.2014 in APAC trade. Momentum may have picked up on a break of trendline support, and the cross has significantly narrowed the gap to next key support at 1.1985.
- Canada June employment data headlines the Friday calendar.
BONDS: Cross-Market Inputs Dominate in Early London Trade
Bonds off early session highs as crude oil finds a base and participants realise that wider core global FI may see flow-based headwinds if Japanese pension funds adopt the repatriation idea floated by the country’s Finance Minister (the resulting rally in JGBs initially spilled over into wider core global FI markets overnight/in early London trade).
- Bund futures failed to break Wednesday’s high (125.77), leaving the bearish technical cycle intact. Initial support located at Wednesday’s low (125.04).
- German yields 0.5-1.5bp lower, curve leans flatter.
- 10s back below 3.10% after the benchmark roll factored into the break above 3. That level yesterday. May highs at ~3.20% remain untested.
- German 2s10s and 5s30s curve have failed to move meaningfully beyond respective June highs.
- EGB spreads vs. Bunds little changed to 1bp tighter.
- BTP supply was digested smoothly, with spreads vs. Bunds tightening following the auction (crude recovery also stalls in the same window).
- Gilt futures pierce the July 8 high (87.93), with the next upside target coming in at the 20-day EMA (88.59).
- UK yields ~2bp lower across the curve.
- 10s back below 4.90% after bears failed to challenge the 5.00% mark during the sell off seen in the earlier part of the week.
- UK 2s10s and 5s30s also back from highs seen earlier in the week, after the May highs capped the steepening.
- Cross-market inputs are set to dominate into the weekend, with little in the way of tier 1 risk events scheduled in Europe & the UK.
EQUITIES: E-Mini S&P Trend Set Up Remains Bullish
The trend needle in EuroStoxx 50 futures continues to point north, however, a sell-off this week highlights a corrective cycle that remains in play for now. The contract has traded through the 20-day EMA and attention turns to the next key support area around the 50-day EMA - at 6159.19. A clear break of the 50-day average would strengthen a bear threat. Key resistance is at 6462.00, the Jul 6 high. The trend condition in S&P E-Minis is unchanged, the set-up remains bullish. Note that moving average studies are in a bull-mode position and this continues to highlight a dominant uptrend. The rally on Jun 29 was a bullish engulfing candle - a reversal signal. It suggests the end of the recent corrective pullback. Key support lies at 7292.25, the Jun 11 low. A continuation higher would open 7693.75, the Jun 2 high and bull trigger.
- Japan's NIKKEI closed higher by 813.88 pts or +1.2% at 68557.73 and the TOPIX ended 15.71 pts higher or +0.39% at 4036.08.
- Elsewhere, in China the SHANGHAI closed lower by 40.426 pts or -1% at 3996.162 and the HANG SENG ended 144.94 pts higher or +0.6% at 24175.12.
- Across Europe, Germany's DAX trades lower by 8.62 pts or -0.03% at 25109.68, FTSE 100 higher by 2.04 pts or +0.02% at 10474.6, CAC 40 up 1.09 pts or +0.01% at 8327.91 and Euro Stoxx 50 down 15.36 pts or -0.24% at 6268.74.
- Dow Jones mini up 22 pts or +0.04% at 52793, S&P 500 mini down 14.25 pts or -0.19% at 7575.5, NASDAQ mini down 154 pts or -0.51% at 29789.75.
Time: 10:00BST/05:00ET
COMMODITIES: This Week's WTI Rally Considered Corrective
A bearish trend structure in WTI futures remains intact and this week’s gains are considered corrective. The contract has recently traded through a key support at $75.45, the Apr 17 low. This strengthened the bear theme and opens $65.95, 76.4% of the Dec 16 - May 18 bull leg. Note too that moving average studies remain in a bear-mode position, highlighting a dominant downtrend. Initial firm resistance is at $79.51, the 50-day EMA. The trend set-up in Gold is unchanged, it remains bearish and the latest shallow recovery is considered corrective. Note that MA studies are in a bear-mode position - this highlights a dominant downtrend. Furthermore the recent breach of $4024.0, the Jun 11 low, confirmed a resumption of the medium-term downtrend. A continuation of the bear leg would open the $3900.00 handle next. Firm resistance is at the 50-day EMA at $4318.0.
- WTI Crude down $0.09 or -0.12% at $72
- Natural Gas down $0.04 or -1.2% at $2.977
- Gold spot down $25.71 or -0.62% at $4096.7
- Copper down $0.25 or -0.04% at $626.4
- Silver down $0.46 or -0.76% at $59.4867
- Platinum up $0.84 or +0.05% at $1616.31
Time: 10:00BST/05:00ET
| Date | GMT/Local | Impact | Country | Event |
| 10/07/2026 | - | *** |  CN | Money Supply |
| 10/07/2026 | - | *** | CN | New Loans |
| 10/07/2026 | - | *** | CN | Social Financing |
| 10/07/2026 | 1200/0800 | ** |  BR | Brazil Final CPI |
| 10/07/2026 | 1200/0800 | * |  US | NY Fed SOFR |
| 10/07/2026 | 1230/0830 | * |  CA | Building Permits |
| 10/07/2026 | 1230/0830 | *** | CA | Labour Force Survey |
| 10/07/2026 | 1300/0900 | * | US | NY Fed EFFR |
| 10/07/2026 | 1600/1200 | *** | US | USDA Crop Estimates - WASDE |
| 10/07/2026 | 1700/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
