Another day with limited macro data on the European side, increasing the focus on tariffs as the White House hardened its position. Base tariffs could be as high at 20% and Canada joins Brazil with threats of higher tariffs (35% now). Despite announcement of a deal last week, Vietnam says it was surprised by the president’s announcement of the 20% (40% pass through) … We are back to a more chaotic approach and markets are overly complacent again.
We start to see more pressure on the long end of curves as we saw in April, before white house retracted from the Liberation Day AI-formula driven tariffs, which are now more or less re-instated with no other logic than political pressure. We note that if the 30yr US remain below the April spike, the 30yr German bund at 3.21% is now above the level reached In April. Stocks are slowly waking up to the new tariff havoc, but many still want to see another escalade to de-escalade episode, hoping for more delays and backing off. It took Bond market pressure to force a reversal in April.
Auctions: not that great
The 30yr auction did not deliver any negative surprise, but as for the 10yr auction it was just OK while the 3yr auction was on the weak side. The trend is still showing a decline in indirect (foreign) bidder’s share for all 3 auctions: 54.1% for 3yr below 66.5% average, lowest since December 2023; 65.4% for the 10yr auction below the 70.75% average, weakest since January; down to 59.8% for the 30yr vs 65.2% average, weakest since May. It also show an increase in Primary dealers’ share in all three auctions. Direct bidders increased significantly: all-time high for the 3yr (since 2003), highest since September for the 10yr, Highest since October 2011 for the 30yr(!)… pointing towards more speculative action.
Ample liquidity now, tighter ahead
The latest Fed balance sheet update shows an $85.5bn increase in reserves week-over-week as of July 9 to $3.3tn (11.2% of GDP). the Treasury General Account declined on Wednesday to $311bn, down -$61.2bn week-over-week, adding on the liquidity front from the -$21.36bn decline in Reverse Repo (-$11.33bn foreign and -$10.03bn domestic).
In yesterday’s speech Chris Waller indicated that reserves will stop being ample at ~9% of GDP (~$2.7tn). The 9% to GDP reserves’ threshold is lower than the general view that frictions would start to appear with reserves at 9.5-10% of GDP, i.e., at about $2.85-$3tn in reserves: not that far off from today’s 3.3tn especially when the TGA is set to increase by ~$540bn in the coming months from today’s $311bn… and no cushion from RR
France inflation is revised up (CPI 1% vs 0.9% preliminary) on upwards revision for energy inflation (-6.7% vs -8% reported before) and a slight increase in Food & non-alcoholic beverages to 1.5% yoy form 1.4%. Core inflation increased to 1.2% from 1.1%. The details shows that the decline in fresh food inflation is almost solely due to lower fresh vegetable prices. As for many other countries we see significantly higher beef & veal and non-alcoholic beverages inflation. Manufactured goods inflation is unchanged at -0.2% yoy but we see a broader group showing higher inflation, but a meaningful decrease in new car inflation (1.8% vs 2.4%). For Services inflation is confirmed up to 2.4% from 2.1%) due to a significant increase in accommodation services inflation (5.5% vs 1.6%), air transport (domestic flights 9.3% vs -0.3%), railways transport (3.4% vs 0.3%), outpatient services (2.1% vs 1.45%) and cultural services (2.8% vs 1.8%). On the other inflation declined for Insurance (9.6% vs 10.2%) - up for motor vehicle but down for housing and health insurance – and package holiday.
Weaker than expected UK May GDP growth down -0.1% m/m (0.5%q/q) after a -0.3% m/m in April (0.7%q/q) when expectations were for an increase of +0.1% m/m. April was unrevised.. Production declined -0.9% m/m after -0.6% m/m in April, with manufacturing down -1% m/m in May following a drop of -0.7% m/m in April (revised up from -0.9%). The fall in manufacturing was driven by pharmaceuticals (-4.2% m/) and transport equipment (-3.2%). Mining & quarrying remains a drag, down -3.2% m/m in May, making a -0.04 negative contribution to the monthly GDP
Construction was also a negative contributor to GDP (0.04 pt contribution) down -0.6% m/m. Services was the only sector posting growth, up 0.1% m/m in May after +0.6% in April. Information & communication was the larger contributor (+0.12pt, +2% m/m), followed by professional, scientific & technical activities (0.06pt contribution) and health & social services (0.03pt contribution, 0.3% m/m). We saw a sharp decline in art & entertainment (-3.1% m/m, -0.04pt contribution) and retail (-1.5% m/m, -0.15pt). Real estate (-0.1% m/m) and financial services (-0.2%) also declined.
The data support our view for a BoE 25bp cut in August.
On the companies’ front: Gjensidige Forsikring ASA delivered a strong beat on profit, reporting NOK 2,245 million, which was 40% above consensus, driven by favorable weather and lower claim frequencies. The loss ratio improved to 67.1%, significantly outperforming expectations, with all divisions contributing positively. Ems Chemie Holding AG showed resilient profitability despite a 6.2% drop in sales, as EBIT and EBITDA margins improved to 29.0% and 31.7% respectively. The company credited focus on high-margin products and early strategic actions for weathering adverse currency and demand conditions. Fraport AG recorded continued passenger growth at Frankfurt Airport, up 2.9% YoY in June, aided by holiday timing and demand for summer destinations. However, cargo volumes declined 2.3%, showing a divergence between passenger and freight trends. Tryg A/S posted a solid Q2 with insurance service result up to DKK 2,307m and a combined ratio improving to 77.2%, reflecting strong underwriting. Despite a weaker investment result, the dividend was raised 5% YoY, and solvency remains strong at 199%. BP P.L.C. expects Q2 upstream production to rise, especially in oil (bpx energy) and slightly in gas & low carbon segments. However, price effects are likely to reduce earnings by up to $1.1 billion, particularly from Gulf of Mexico and UAE output. Technip Energies NV secured a major FLNG contract in Africa valued between €250–€500 million, extending its LNG portfolio. The deal runs through September 2025 and underscores continued strength in gas infrastructure demand. Brunello Cucinelli SpA achieved strong H1 sales growth of 10.2%, with broad-based performance across all geographies and channels. Management remains confident, reiterating full-year 2025 guidance of +10% revenue growth, supported by new collections and store openings. DNB Bank ASA showed resilient fee and loan growth post-Carnegie integration but missed earnings expectations due to margin compression and rising provisions. Net profit fell 3% YoY to NOK 10.44 billion, 4.6% below consensus. More details on equities here
No-Deal tariffs’ chaos.
Bund 30yr yield above the April high…
Again, just OK 30-year auction, but better than feared.
The Federal Reserve balance sheet snapshot as of Wednesday July 9 posts stable total assets at $6.66tn, up $2.3bn from July 2nd.
After being stable for most of the week, the Treasury General Account declined on Wednesday to $311bn, down -$61.2bn week-over-week, adding on the liquidity front from the -$21.36bn decline in Reverse Repo ($11.33bn foreign and -$10.03bn domestic). The daily data shows some accelerated decrease in the last few days, with the domestic RR down to $183bn (vs $195.4bn as of Wednesday).
At the end reserves increased $85.5bn w/w to $3.3tn (11.2% of GDP) and base money $87.4bn w/w to $5.7tn.
In yesterday’s speech Chris Waller (top less controversial candidate to replace Powell), indicated that reserves will stop being ample at ~9% of GDP (~$2.7tn), and implied that the central bank can reduced its balance further (currently at 22.2% of GDP). Waller also advocates having a lower duration composition of the Fed’s securities holding to match better its liabilities. Another comment that would be well received by the white house on top of his more dovish comments on rates.
The 9% to GDP reserves’ threshold is lower than the general view that frictions would start to appear with reserves at 9.5-10% of GDP, i.e. at about $2.85-$3tn in reserves: not that far off from today’s 3.3tn especially when the TGA is set to increase by ~$540bn in the coming months from today’s $311bn… and no cushion from RR.
The US treasury increased the T-Bills auction size this week (+25bn for the 4 weeks and 8weeks yesterday and +25bn for 6 weeks on the 8th) and will be reflected in the TGA in next week’s snapshot.
For next week, The US treasury maintained the 6-week auction at $70bn but increased the 13-week to $82bn from $76bn previously and the 26-week to $73bn from $68bn previously.
The final French June CPI is revised up to 1% (0.97%) from 0.9% yoy estimated earlier up from 0.7% yoy in May. Prices are up 0.4% m/m (0.38%) rather than 0.3% m/m reported before. The change comes mainly from an upward revision in energy inflation to -6.7% yoy/ 0.6% m/m from -6.9% yoy / 0.3%m/m flash estimate. Food & non-alcoholic beverages inflation is also revised up to 1.5% yoy from 1.4% (still -0.1% m/m). Manufactured products’ inflation is maintained unchanged from May to -0.2% and services inflation is confirmed up at 2.4% yoy up from 2.1% yoy in May.
The HICP is also revised up to 0.9% yoy from 0.8% yoy reported earlier increasing from 0.6% yoy in May.
The increase in inflation from May to June comes from the higher services inflation and less negative decline in energy prices (was -8% yoy in May). Core inflation is slightly higher at 1.2% yoy up from 1.1% yoy in May.
Energy inflation increased to -6.7% yoy from -8% due mainly to higher liquid fuel prices inflation (gasoline at -7.1% vs -10.8%, Diesel at -6.1% vs -9.7%yoy, up 2.7% m/m) buy inflation is also marginally up for electricity (-13.9% vs 14.0%). Gas prices inflation is down again to 17% from 22.3% in May.
The decline in fresh Food inflation to 1.2% yoy from 1.5% yoy in May is mostly driven by lower fresh vegetables inflation (-4.2% yoy vs -3%, down -4.2% m/m) – as seen in Germany - while we an increase in fresh fruits inflation (6.8% vs 6.3%yoy). Fresh fish inflation is also up slightly at 2.1% vs 2%. Eggs inflation is stable (0.2%) and we see some increase in milk inflation. Meat inflation increased to 0.5% yoy from 0.4%, but with big discrepancies: Beef & veal inflation surged to 4.9% from 3.9% (1.15% m/m), lamb at 7.9% vs 7.5% but pork 0% yoy, Poultry 0.5% yoy, while processed meat inflation is down.
Oil & fats inflation is down to -0.8% yoy from -0.5%. For processed food, we see a decline in flour & cereal inflation.
French non-alcoholic beverages inflation rose in June to 8.4% yoy from 7.6% yoy in May as coffee inflation increased further (16% vs 14.25%) along cocoa-based drinks inflation (17.6% vs 14.9%) along with soft drinks (9.9% vs 9.1%).
For alcoholic beverages, inflation is marginally up to 0.5% yoy in June from 0.3% in May, driven by higher spirits (0.9% vs 0.6%) and beer (0.5% vs 0.3%) while wine inflation is stable (0.1%)
Tobacco inflation is slightly down to 4% from 4.1%
Manufactured products inflation is stable at -0.2% yoy For non-food, non-energy goods we saw a increase in clothing inflation, appliances, furniture, garden tools & furniture, tires, but on the other hand inflation fee for new cars (1.8% vs 2.4%), footwear, and house textiles. Inflation is stable or medical and pharmaceutical products, used cars, utensils…
The increase in Services’ inflation to 2.4% from 2.1% is due to a significant increase in accommodation services inflation (5.5% vs 1.6%), air transport (domestic flights 9.3% vs -0.3%), railways transport (3.4% vs 0.3%), outpatient services (2.1% vs 1.45%) and cultural services (2.8% vs 1.8%). On the other inflation declined for Insurance (9.6% vs 10.2%) - up for motor vehicle but down for housing and health insurance – and package holiday (0.85% vs 4.6%). Inflation for restaurant, rent, and social protection was stable.
Detailed table
May UK monthly GDP growth surprised on the downside at -0.1% m/m (0.5%q/q) after a -0.3% m/m in April (0.7%q/q). April was unrevised. Expectations were for an increase of +0.1% m/m.
Production declined -0.9% m/m after -0.6% m/m in April, with manufacturing down -1% m/m in May following a drop of -0.7% m/m in April (revised up from -0.9%). The fall in manufacturing was driven by pharmaceuticals (-4.2% m/) and transport equipment (-3.2%). For overall production mining & quarrying remains a drag, down -3.2% m/m in May, making a -0.04 negative contribution to the monthly GDP. Production made a -0.12-point contribution to the monthly GDP out of which -0.09 from manufacturing. Production is only up 0.2% q/q (manufacturing 0.4% q/q).
Construction was also a negative contributor to GDP (-0.04 pt contribution) down -0.6% m/m.
Services was the only sector posting growth, up 0.1% m/m in Amay after +06% in April but is now only up 0.4%q/q versus 0.6% q/q in April. Information & communication was the larger contributor (+0.12pt, +2% m/m), followed by professional, scientific & technical activities (0.06pt contribution) and health & social services (0.03pt contribution, 0.3% m/m). Education contributed 0.02 (0.4% m/m), transport and storage (0.3% m/m). Accommodation & food services (0.2% m/m) also had a positive contribution (0.01pt each), but we saw a sharp decline in art & entertainment (-3.1% m/m, -0.04pt contribution) and retail (-1.5% m/m, -0.15pt). Real estate (-0.1% m/m) and financial services (-0.2% m/m) also saw lower activity in May.
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Friday, July 11, 2025 | ||
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GJF | |||
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NOK |
283.20 |
+8.09% | |
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GJF |
Norwegian insurer Gjensidige Forsikrin reported strong results, driven by favorable claims conditions and supportive market performance. | ||
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EMSN | |||
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CHF |
650.50 |
+4.58% | |
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EMSN |
Net sales declined by 6.2% year-on-year to CHF 1,020 million, impacted by a stronger Swiss Franc and softer global demand. Currency effects alone accounted for a 2.5% drag on revenues. | ||
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FRAS | |||
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EUR |
31.80 |
+2.58% | |
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FRAS |
Frankfurt Airport welcomed approximately 5.8 million passengers in June 2025, an increase of 2.9 percent compared to the same month last year. This year’s June figures received an additional boost from the later timing of the Whitsun school vacation, which fell in May in year 2024. Warm-weather destinations in Europe benefited from the holiday period and saw particularly strong demand during the reporting month. As a result, FRA – Germany’s largest aviation hub – recorded traffic growth for the fourth consecutive month in June. Cargo volumes in Frankfurt (including airfreight and airmail) slipped by 2.3 percent year-on-year to 174,262 metric tons in June. Across the Group, the airports in Fraport’s international network also experienced growth in June 2025. At Ljubljana Airport (LJU) in Slovenia’s capital city, traffic surged by 10.4 percent year-on-year to 163,516 passengers. | ||
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TRYG | |||
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EUR |
22.20 |
+2.30% | |
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TRYG |
Tryg reported an insurance service result of DKK 2,307m (DKK 2,020m) and a combined ratio of 77.2% (78.8%) in Q2 2025. The higher insurance service result was supported by a growth of 4.0% (3.9%) in local currencies and a continued underlying profitability improvement. The investment result was at DKK 110m (DKK 538m). Pre-tax profit was DKK 2,035m (DKK 2,129m) and profit after tax was DKK 1,531m (DKK 1,642m). Ordinary dividend of DKK 2.05 (DKK 1.95) per share for the quarter, is an increase of more than 5% from last year. The reported solvency ratio at the end of Q2 2025 was 199% (195% Q1 2025), supportive of future shareholder remuneration. | ||
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BP. | |||
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GBp |
397.35 |
+2.21% | |
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BP. |
Updated 2Q25 guidance | ||
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TE | |||
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EUR |
36.92 |
-0.32% | |
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TE |
Technip Energies has been awarded a large contract (between €250-€500m) to perform preliminary activities for a Floating Liquefied Natural Gas (FLNG) unit in Africa. | ||
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BC | |||
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EUR |
107.60 |
-1.47% |
Cucinelli Release |
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BC |
Net revenues rose by 10.2% year-on-year to €684.0 million (Consensus €680m), up from €620.7 million in H1 2024, with a 10.7% increase at constant exchange rates. Growth was well-balanced across geographies: Europe (+10.0% to €243.1 million), the Americas (+8.7% to €245.2 million), and Asia (+12.5% to €195.7 million), with China showing especially robust demand. | ||
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DNB | |||
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NOK |
261.60 |
-8.05% | |
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DNB |
DNB’s Q2 showed resilient lending and fee growth post-Carnegie acquisition, but bottom-line performance was dampened by margin squeeze and rising provisions. | ||
Versus early hours
SECTOR PERFORMANCE
Versus early hours:
Indices
Versus early hours
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