OIL PRODUCTS: Oil Products Summary At European Close: Cracks Fall

"GERMAN CHANCELLOR BACKS MORE MUSCULAR APPROACH AHEAD OF JULY TALKS DEADLINE - FT
EU READIES RETALIATORY TARIFFS TO SECURE BETTER TRADE DEAL WITH TRUMP - FT" - Reuters

• Full FT article found here: https://www.ft.com/content/3d336a84-ac59-45ee-b857-8a01fc7cd806
• "The EU must make a “credible threat” of retaliation in Donald Trump’s trade war if it wants to get a good deal, a senior official has warned ahead of a looming talks deadline.
• "Bjoern Seibert, the European Commission president’s chief of staff, told the bloc’s ambassadors after the G7 summit in Canada last week that the prospect of a strong response would help convince the US president to reduce stiff tariffs on the EU, according to two EU officials."

us dataCleveland Fed’s Hammack (’26 voter) has a similar view to Fed Chair Powell on the labor data, with it reasonably stable but some weariness that it can turn quickly. US immigration policy could be a barrier to longer-term growth which is something to be watched. 

• “The shift in immigration policy could have a material impact in terms of how we're interpreting [labor] data. So if you look at sort of the breakeven payrolls number that we had needed last year would have been significantly higher than what we'll need this year. We factor that in as we're looking at the weekly claims data and other numbers.”
• “The tricky thing with the labor market is that when it tends to weaken, it tends to weaken quickly. And so you have to be very attentive to it. You have to be watching it carefully as I am for those signs.”
• “Right now we've had very good stability in the employment side.”
• “When I'm out in the district talking with businesses, whether I'm in Toledo or Worcester or Pittsburgh or all the great cities that we have in the Midwest, what I get is really a sense from business leaders that they worked incredibly hard to find and train workers over the past several years coming out of the pandemic, and they're very loathe to let them go. And so we are in this slow hiring, slow firing world, where you're not seeing a lot of layoffs, but if you don't have a job, it's much harder to get a job.”
• “The VU ratio is one that we continue to track closely, and we're still running right around our pre pandemic number. It's come down very significantly from where we had been in the pandemic. But I don't see the labor market as being a source of inflation for the US economy right now. And based on the data that I'm seeing right now, it looks like our labor picture is reasonably stable, partly because of the immigration implications.”
• “It could be a barrier to growth longer term. So that's something that we do need to watch, because if growth weakens, and you could see follow on implications for the labor market as well, but, right now, I think the labor market looks reasonably stable and very healthy in the US.”

With the gov't facing a major rebellion from backbench Labour MPs on proposed welfare reforms that could save GBP5bln/year by 2030, Pippa Crerar at The Guardian posts on X: "Despite Liz Kendall and other cabinet ministers being locked in talks trying to convince welfare rebels not to vote down the bill, I'm told the number of Labour MPs planning to do so has actually gone up - from 108 to 127."

• As noted earlier (see 'UK: Sizeable Backbench Rebellion Looks To Force Gov't U-Turn On Benefits Cuts', 10:52BST), the gov'ts working majority would be wiped out by the scale of the backbench votes for the amendment (not to say the possibility for ministerial resignations over the issue as well). If the amendment is adopted, it would be enough to see the Bill stopped at the second reading on 1 July.
• This scenario leaves PM Sir Keir Starmer with several options. One is facing down the rebels and risking major splits within the party between leftists and moderates. Another is to row back on the proposed reforms, risking market jitters over his gov'ts commitment to fiscal probity. Another is to rely on votes from the main opposition centre-right Conservatives.
• The Conservatives have not yet indicated their intentions with regard to the amendment, or the welfare reform bill in general. Relying on opposition votes would risk further discord within the governing centre-left Labour party and potentially weaken the positionof Starmer, Chancellor of the Exchequer Rachel Reeves, or Secretary of State for Work and Pensions Liz Kendall.