OUTLOOK: Price Signal Summary - Bear Cycle In Oil Still In Place

• Treasuries are off lows although maintain a modest sell-off that has been aided by broader equity strength in Japan following a US-Japan trade deal with 15% tariffs rather than the 25% threatened. Japan PM Ishiba denied media reports that he is set to announce his resignation soon.
• A poorly received JGB auction also helps the steepening bias seen.
• Trade talks: Building on comments from Bessent yesterday, the China Ministry of Commerce says China-US will hold trade talks in Sweden Jul 27-30. Separately, EU’s Sefcovic is to talk to US Commerce Secretary Lutnick this afternoon.
• Today sees existing home sales and 20Y supplybefore Leavitt and then Trump remarks.
• Cash yields are 1-2bp higher with increases led by 10-30Y tenors.
• 2s10s at 52.6bp (+1.1bp), 5s30s at 104.1bp (+0.6bp). 5s30s peaked at 108.5bp last week after Trump-Powell firing headlines.
• TYU5 has lifted a few ticks over the past hour to 111-06+ (-06+) on modest cumulative volumes of 285k.
• It has eased to sit more firmly into yesterday’s range away from the high of 111-14+ which cleared resistance at 111-13+ (Jul 10 high). A clear break of this hurdle would highlight a stronger reversal and open 111-28 (Jul 3 high).  
• Data: MBA mortgage applications (0700ET), Existing home sales Jun (1000ET)
• Coupon issuance: US Tsy $13B 20Y Bond re-open (1130ET). Last month’s 20Y was mixed, drawing a small 0.2bp tail, a higher bid-to-cover and lower indirect take-up.
• Bill issuance: US Tsy $65B 17W bills (1300ET)
• Politics: White House Press Secretary Leavitt (1300ET), Trump remarks at Executive Orders at AI Summit (1700ET)

• Date $MM Issuer (Priced *, Launch #)
• 07/23 $750M JFM (Japan Finance Org for Munis) 5Y SOFR+63
• $4.5B Priced Tuesday

Following on from the earlier bullet regarding the EU-Japan summit (see 'JAPAN-EU: Emphasis On Security & Econ Coercion, No Mention Of Rare Earths Deal', 11:00BST), within the joint statement and attached Competitiveness Alliance, there no detail on the prospective rare earths procurement deal that had been mooted as one of the potential concrete outcomes of the talks. The statement did, though, outline efforts to cooperate on the broader area supply chains for critical minerals. 

• The Competitiveness Alliance highlights the expansion of a High-Level Economic Dialogue, where collaboration "includes addressing threats to the resilience of supply chains, strategic dependencies, economic coercion, non-market policies and practices, as well as overcapacity resulting from them, promotion and protection of critical and emerging technology, research security, the physical and cyber security of critical infrastructure, and export control particularly concerning critical minerals, including the rare earth elements, that pose economic security risks to the EU and Japan."
• The two sides agreed on "increasing supply chain resilience and reducing strategic dependencies, including strengthening and diversifying critical minerals supply chains."
• Both Tokyo and Brussels find themselves caught between China and the US when it comes to procurement of critical minerals. These are required as part of decarbonisation drives (notably for EVs) and efforts to bolster tech development (particularly semiconductor development and manufacturing).