Elections in the UK, cooling of the economy, central bank rates, corporate news of companies
• The main event in Europe will be the UK elections, where the only real unknown is how big Labor's majority will be. Bookmakers are betting on Labor and even Tory ministers have admitted they are facing a record defeat. It's possible a tactical vote could push the Conservatives into third place, making the centrist Lib Dems the main opposition and altering the traditional balance of power in Parliament. It is the opposition that asks questions in parliament, and the centrist agenda is likely to be very different from the typical right-wing one. Markets appear unfazed by the likely change in power, with FTSE futures stable and sterling close to a three-week high against the dollar. The Tories' reputation for economic management has been so badly tarnished by the bond market crash that followed Liz Truss's mad budget that Labor no longer seems fiscally scary.
• On the prospect of a Fed rate cut in September, futures now price the probability at 74%, up from 65% before the weaker data, helping push the 10-year yield down 8 basis points. The Treasury market is closed for the July 4 holiday, but futures suggest the 10-year yield is holding at 4.35%. Although it's worth noting that the surprising weakness seen in the ISM survey was completely at odds with the strength seen in that PMI. the same service sector. The ISM used to have a better correlation with the economy, but that has collapsed somewhat since the pandemic and this report may overstate the slowdown.
• Japan's broad Topix index broke its 1989 peak to hit an all-time high, led by banks and autos, while Taiwan's main index also hit all-time highs, fueled by the current craze for all things AI. Taiwan Semiconductor Manufacturing Co (TSMC) ( 2330.TW ) opens a new tab, breaking the NT$1,000 mark for the first time, up 70% for the year.
• Biden said he is weighing whether to continue participating in the election race - NYT. Vice President Kamala Harris is the leading alternative if Biden drops out of the race.
Of all the possible Democratic candidates, only Michelle Obama could beat Trump in the November election - Reuters poll.
Harris has little chance of beating Trump, according to all polls and bookmakers' odds.
The replacement looks weak. And Michelle Obama doesn’t want to go to the polls yet, journalists say.
A defiant (Marketwatch quote) President Joe Biden vowed Wednesday to continue running for re-election
, rebuffing growing pressure from Democrats to withdraw his candidacy after a disastrous debate performance.
"Let me say this as clearly as I can, as simply and as bluntly as I can: I'm running... no one is ousting me," Biden said during a call with his campaign staff. "I'm not quitting. I'm in this race until the end, and we will win."
•China's central bank will borrow government bonds with possible sale - Nikkei, which is seen as a step towards their sale to stabilize the overheated market.
Financial institutions are investing in government bonds as they try to find good lending opportunities amid a slump in China's real estate market, pushing up prices and lowering bond yields.
China's 10-year yield fell to 2.183% at one point on Monday, its lowest since 2000, according to London Stock Exchange data.
• Italy plans to buy hundreds of tanks from Rheinmetall at a cost of about 20 billion euros. This is the largest order in the history of the German defense concern.
• World Bank: The BRICS share in global GDP reached a record 35.7%, while the weight of the G7 economies was 29%.
Putin and Xi met at a summit in Central Asia, demonstrating deepening cooperation. The SCO summit is attended by the leaders of the Russian Federation, China, Kazakhstan (host), Pakistan, Tajikistan, Uzbekistan, Kyrgyzstan, Belarus, Pakistan, Turkey and Azerbaijan.
And also the UN Secretary General. India will represent the Foreign Minister, not Prime Minister Modi.
• The EU wants to impose a duty on cheap goods from Chinese online stores. The European Union is drawing up plans to impose tariffs on cheap goods from Chinese online retailers including Temu, Shein and AliExpress.
At the end of this month, the European Commission will propose scrapping the current €150 threshold below which goods can be bought duty-free.
• The US economy is reporting mixed but overall slowing data.
- ADP Nonfarm Employment showed an increase in the number of jobs by only 150 thousand (163 thousand were expected).
- The number of applications for unemployment increased to 238 thousand (from 233 thousand).
- Composite PMI rose from 54.5 to 54.8 (54.6 expected)
- Services PMI rose from 54.8 to 55.3 (55.1)
- Non-manufacturing PMI fell from 53.8 to 48.8 (52.6)
- Industrial orders fell 0.5% (0.2% expected)
- The EU Producer Price Index (PPI) was -4.2% year on year. It was -5.7%, expected -4.1%.
• The European economy is cooling as expected - PMI indices show
- S&P composite fell from 52.2 to 50.9
- S&P services fell from 53.2 to 52.8 (52.6)
- Germany composite PMI fell from 52.4 to 50.4 (50.6)
- Germany services PMI fell from 54.2 to 53.1 ( 53.5)
- France composite PMI fell from 48.9 to 48.8 (48.2)
- France services PMI rose from 49.3 to 49.6 (48.??
- UK services PMI fell from 52.9 to 52.1 (51.2)
• China is the leader in artificial intelligence patents: it has surpassed the United States many times over. China is far ahead of other countries in generative AI inventions such as chatbots, filing six times more patents than its closest rival, the United States.
This was reported by Reuters with reference to a UN report. But we need to distinguish between the quantity and quality of patents.
• The USDC stablecoin issuer was the first to receive a license in the EU under the new rules of the MiCA law. Circle, the issuer of the second-largest stablecoin USDC by capitalization, has received a license in the EU in accordance with the new rules introduced by the MiCA law.
Circle became the first global stablecoin issuer to meet the requirements of the MiCA crypto asset markets regulation, and began issuing USDC and EURC directly to European clients on July 1.
• Microsoft agreed to pay $14 million due to employee discrimination - Reuters. That's because the California agency claims it illegally punished workers who took leaves for health or parental reasons, the agency said Wednesday.
• The average rate on a 30-year mortgage rose to just under 7% for the first time since late May. The rate rose to 6.95% from 6.86% last week, mortgage buyer Freddie Mac said Wednesday.
• Oil remains near two-month high - Bloomberg. After a government report showed U.S. oil inventories fell the most in nearly a year.
• Ozempic linked to rare cases of vision loss in Harvard study. Novo Nordisk A/S's best-selling diabetes and weight-loss drugs Ozempic and Vegova appear to be associated with a higher risk of a rare form of vision loss, according to an analysis by doctors at the Harvard-affiliated Massachusetts Eye and Ear Infirmary.
• Redstone and Skydance have agreed to a new deal with Paramount, but "a lot of uncertainty" remains. Paramount shares jumped after the Wall Street Journal reported on the media giant's new merger with Skydance Media.
• Jeff Bezos to sell nearly $5 billion worth of Amazon shares as shares hit record high - Reuters.
Once the sale plan is implemented, Bezos will own about 912 million Amazon shares, or 8.8% of shares outstanding.
• Reuters writes that banks will publish information about the risks associated with crypto assets from 2026. Global banking regulators have approved templates for banks to disclose their exposure to crypto assets from January 2026, they said on Wednesday, a year later than previously planned.
• Reuters - General Motors will pay $146 million in fines. A US government investigation found excessive emissions from approximately 5.9 million GM vehicles.
• Extreme cocoa shortage will finally end -Bloomberg. The resumption of cocoa production by the world's largest producers should end the widespread shortage of cocoa beans that has led to record price increases this year.
• Chief Strategist Marko Kolanovic is leaving JPMorgan. Most likely, he was “left” from the bank. Kolanovic has been warning about a market collapse for more than 2 years.
• Fed Minutes: The US economy is cooling. But a rate hike may be justified if inflation rises.
• NVDA, AVGO and TSLA rose rapidly in price yesterday. What united them was Nancy Pelosi. As a result of the mandatory report, people learned that she bought call options on AVGO, NVDA shares and sold TSLA and V. TSLA shares actually rose in price after the magical reversal of people's opinions about the company from "horror-horror" to "eternal love", from " "an ordinary car company" to "the leader of a new technological revolution."
• Despite the weakening of the US dollar along with a drop in US government bond yields, Bitcoin dived below $60 thousand. “Digital gold” fell by 2%, and real gold rose by 1%.
Today
- US stock markets will be closed for Independence Day celebrations.
- The EU plans to begin imposing provisional tariffs of between 17.4% and 38.1% on electric vehicles from China within four months.