US NATGAS: Waha Natgas Fundamentals

• We wrote on Friday on the German Minimum Wage Commission’s proposal to raise the national minimum wage by 8.4% in Jan 2026 and 5.0% in Jan 2027, including how it could contribute to at least some stickiness in services inflation. See more on the announcement here and here.
• Goldman Sachs meanwhile write that next year’s increase will catch up to negotiated wage growth since 2022 before likely surpassing it the following year.
• “We estimate that the minimum wage increases in 2026 and 2027 will cumulatively boost the wage level by 0.4%. This is substantially less than the estimated 1.2% boost from the 22% increase of the minimum wage in 2022.”
• “The pass-through of minimum wage increases to prices depends on the size of the increase and the economic environment. Similar to other cost push shocks, pass-through rates for larger increases and for increases during times of higher inflation were stronger in the past. Pass-through of the coming minimum wage increases is likely to be closer to pass-through in 2015 than in 2022, as we expect inflation to be close to 2% through 2027 and the minimum wage increases are substantially smaller than 2022.”
• “Using the 2015 pass-through rate, we estimate that the minimum wage increases could raise the 2027 price level by 0.4%. With an alternative approach using wage-price pass-through, we estimate a boost to the price level of 0.14%. Taken together, this implies limited upside to our inflation outlook but—given ongoing disinflation—does not materially change the inflation outlook for Germany.”

Wires are reporting that the EU parliament is to debate a motion of no confidence vs the European Commission, with a debate on Monday before a vote on Thursday. 

“*EU PARLIAMENT TO DEBATE MOTION OF NO-CONFIDENCE VS COMMISSION
*EU NO-CONFIDENCE DEBATE MONDAY, VOTE THURSDAY,ECR'S SIMION SAYS” – bbg

Politico run a similar story citing six officials, with the full story here.

• "It is the first time in more than a decade that the head of the Commission has faced such a move."
• "The latest challenge to the European Commission president [Ursula von der Leyen], in what is proving to be a rocky first year in her second term in power, will see the German forced to appear in a debate about her leadership among lawmakers in Strasbourg on Monday, followed by the vote three days later."
• “At this stage, the vote is mainly symbolic — the majority of political groups have already signaled that they will vote against the motion of no confidence — but it underscores the growing anger with her in Brussels after a string of controversial moves and scandals.”
• "If the no-confidence motion were to pass, it would lead to the resignation of the entire Commission and trigger the complex process of appointing 27 new European commissioners."

 There had been reports on the matter earlier in the day but it’s now seen as being official. 

This from Simion on X: 
@georgesimion "????It's official!

Motion of No-Confidence against @EU_Commission led by #UrsulavonderLeyen will be debated next Monday and voted next Thursday in the plenary session.

Time to be held accountable!"

• RES 4: 1.3852 1.764 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 3: 1.3835 High Oct 20 2021
• RES 2: 1.3800 Round number resistance
• RES 1: 1.3789 High Jul 01
• PRICE: 1.3599 @ 16:10 BST Jul 2
• SUP 1: 1.3586/63 20-day EMA / Low Jul 02
• SUP 2: 1.3439 50-day EMA
• SUP 3: 1.3338 Trendline support drawn from the Jan 13 low 
• SUP 4: 1.3140 Low May 12 and key support

A bull cycle in GBPUSD remains in play and a fresh cycle high Tuesday reinforces bullish conditions. This maintains the price sequence of higher highs and higher lows. Note too that moving average studies are in a bull-mode position, highlighting a dominant medium-term uptrend. Today’s move lower appears to be a correction. Support to watch lies at 1.3586, the 20-day EMA. A break would signal scope for a deeper corrective pullback.