CHINA: Retail Sales Weakest Since 2022

US President Donald Trump is shortly due to deliver remarks "to young voters" at a Turning Point USA event in Phoenix, Arizona, the grassroots conservative organisation founded by the late Charlie Kirk. Other speakers at the event include Erika Kirk and members of the state’s House delegation, Andy Biggs (R-AZ), Eli Crane (R-AZ), and Paul Gosar (R-AZ). LIVESTREAM

• Politico notes, “Nevada and Arizona are ground zero for this cycle’s swingiest Latino voters, a bloc that proved pivotal to Trump’s 2024 victory and are on the margins of some of the biggest toss-up House races. It’s the Sun Belt where the demographic growth of Latinos is booming. And it’s where the GOP stands to lose as much as it gained nearly two years ago.”
• A Republican strategist said, “Young voters, that’s where Trump is hurting the most. Turning Point is the largest consortium of younger voters out there. They may not necessarily like what’s going on in Washington, D.C. but, deep down, they still stand by Trump.”

Moody's has downgraded Belgium's long-term issuer and senior unsecured bond ratings to A1 from Aa3, while changing the "negative" outlook (where it had been since 2024) to "stable".

• Moody's: "The decision to downgrade Belgium's ratings to A1 reflects three interrelated developments that relate to the fiscal outlook, growth perspectives and Belgium's institutional set-up. Debt-to-GDP is increasing despite significant consolidation measures that have been undertaken by the government. Modest medium-term growth, higher interest expenses and structural increases in expenditure due to the social risks associated with ageing as well as defence have compounded an already-challenging government budget picture. At the same time, Belgium's institutional setup is constraining the government's ability to address these fiscal pressures."
• Additionally, "A stable outlook reflects our view that fiscal deterioration will continue while being balanced by Belgium's enduring credit strengths."
• MNI noted in its preview of the ratings review: "On balance, we think a downgrade to A1 could be avoided, but stress that the risk of a downgrade is larger than was faced by France last week. If a move to A1 is realised, we wouldn't be surprised to see renewed underperformance of OLOs versus OATs, given ratings divergence and the fact OLOs have fared slightly better than OATs since the Iran war started."

Friday's US rates/bond options flow included: 

• SFRK6 96.43/96.56cs, bought for half in 10k
• SFRN6 96.37/96.50/96.62c fly, bought for 1.75 in 5k, done on the pit and screen
• SFRU6 96.50/96.81/97.12c fly vs 96.00/95.75ps, bought the fly for 1.5 in 2.5k
• SFRZ6 96.00p, bought for 8.25 in 5k
• TYM6 112.50 calls, paper paid 0-13 on ~10.4K all day
• TYM6 110.50p x2 vs 110p/109.5p strip x1, bought the package for 22 in 10k (20kx10kx10k)
• USM6 116.00 calls 5K given at 0-27