Macro

• UK inflation surged 0.2pp beyond the consensus again in June, with underlying inflation measures broadly inconsistent with the target and headlines moving the wrong way.
• The consensus is failing to learn the lesson of intense underlying pressures. The CPI rate rose 0.6pp since Jan instead of falling 0.4pp and is 1.4pp higher than called a year ago.
• Policymakers seem infected with dovish fear about the labour market ahead of August’s meeting. CPI is 0.9pp higher in our year-ahead forecast, and we were right a year ago.

• GDP / China’s GDP growth slows to 5.2% as domestic demand, property continue to weigh
• Railway /: Global interest in China’s high-speed rail tech picks up speed
• Consumption /In Depth: The consumption conundrum dividing China’s economists

• Bank Indonesia cut its benchmark rate by 25bp to 5.25% in July 2025, marking the fourth easing since September amid low inflation and strong foreign exchange reserves.
• The decision reflects confidence in 1.87% June inflation staying within the 2.5±1% target range, the stable rupiah supported by a robust intervention framework, and the need for growth stimulus.
• Future easing depends on continued inflation anchoring, currency stability, and global developments, including US trade policy and Federal Reserve actions affecting capital flows.

• Rebounding headline and core US inflation in June understated the underlying growth, with shelter rising at its slowest pace since August 2021. Tariff pain crept in belatedly.
• Commodities, less food, energy and car prices grew by 0.3% m-o-m, the fastest since Feb-23, and services (ex-shelter) hit 0.4% m-o-m, both inconsistent with the target.
• Less than half of the post-election surge in expectations has survived so far. Further rises remain likely, even if sustained avoidance smooths and reduces the full impact.

• In this insight, we discuss Korean government’s new task force for Korea to be included in a major global index. 
• Prior to this major market moving event, there will be some important signals. 
• One of the most important signals could be major global securities companies (such as IBKR/TD Ameritrade) allowing trading of Korean stocks to customers world-wide. 

• Given the copper tariff announcement this week, it seemed worthwhile to sketch out where the US gets its copper from, as the situation is not nearly as dire as a 50% tariff makes it out to be.
• We think a little context goes a long way in this situation and leads us to believe that the tariff is a wholly unnecessary impediment to a well-functioning market.
• If Trump were serious about achieving self-sufficiency in copper, he would focus on permitting reform, as we have plenty of domestic copper and only lack the smelting/refining capacity.

• The investment implications of Trump’s One Big Beautiful Bill are underweight US government debt and overweight US equities. 
• The bill is just plain old fashion demand side fiscal stimulus. 
• Favour momentum stocks with a sectoral bias towards  consumer discretionary, tech, industrials, traditional energy, defence. Underweight renewables and Treasuries and increase exposure to Bitcoin.

• Therapy /Cover Story: Controversial mind-body therapy attracts 1 million Chinese seeking miraculous cures
• Kindergarten /China province elevates probe into kindergarten lead-poisoning scandal
• Dialysis /In Depth: The illicit drug trade lurking behind ‘free’ dialysis

• Core PCE and CPI inflation remained at 4-year lows in Apr-May’25 despite Trump’s tariffs, although June core CPI inflation crept up MoM after further tariff hikes (on steel and aluminium).
• M2 growth of just 5.2%YoY (May’25) is a restraining factor on inflation. However, tariff hikes have been much higher than we expected, with most trading partners failing to negotiate reductions. 
• For consistency with 2024 cuts, the FOMC likely will cut rates this month. But the tariff hikes on most trading partners will push core inflation toward 3%, disallowing further cuts. 

• Europe’s Group II base oils prices hold unusually firm versus vacuum gasoil at start of Q3 2025.
• Europe’s Group II base oils price-differentials hold unusually firm vs Group I and Group III base oils at start of Q3 2025.
• Europe’s Group II base oils price-premium to Asia/US prices trends higher from early-Q2 2025.

• US Group II base oils price-premium to heating oil edges lower, stays in narrow range since start of Q2 2025.
• Base oils price-premium stays rangebound even with expected improvement in supply and slowdown in demand in coming weeks.
• US base oils supply could rise more swiftly in coming weeks following completion of plant-maintenance work.

• Asia heavy-grade base oils price-premium to Singapore gasoil holds at elevated levels even as it slips from recent highs.
• High heavy-grade margins point to firm supply-demand fundamentals, incentivize refiners to maintain or raise output of the grades.
• Besides firm margins, outperformance of regional Group I SN 500 price relative to other grades and other regions points to even stronger fundamentals for that product.

• US base oils demand could ease as seasonal slowdown in consumption coincides with rise in supply.
• Demand could get support from tighter surplus supply at start of Q3 2025 following recent plant-maintenance work in domestic and overseas markets.
• Tighter surplus supply curbs prospect of any imminent price-adjustments at time of year when fundamentals typically weaken.

• Not surprised by recent events in the equity market, as it aligns with forecasted growth trends in Asia
• Transitory factors such as front loading and transshipment contributing to expected decline in H2 growth
• Expectation for central banks in the region to potentially ease rates in response to current economic conditions

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• President Trump’s tariff policy seemingly follows a random walk with a drift towards deals. Path dependency raises risks and uncertainty around his volatile whims.
• Corporate avoidance measures have spared their customers from most of the pain, but Vietnam’s deal as a template could belatedly bring more of the pain to bear.
• We assume most countries stay at 10%. The impact of others rising to 20% may be smaller than the anti-avoidance hit, with the total now worth less than 0.4% to UK GDP.

• Plant closures signal Europe’s industrial competitiveness crisis  
• Regulatory burdens over Europe’s retreading sector future  
• Weak enforcement and oversight cloud UK ELT exports   

• We are introducing a new regular series called “Korea: Short Selling Data Analysis.” We will try to provide this insight on a quarterly basis.
• Net short balance ratio for top 20 stocks in KOSPI averaged about 1.7% three months ago, much lower than current levels (3%).
• The average short interest ratio of these top 20 stocks in KOSPI with the highest short balance ratio was 2.6x as of 10 July 2025. 

• Asian currencies bottomed out in early April. FII flows turned positive in May. Flows into Taiwan are recovering the fastest, followed by those into Korea. India’s recovery is relatively tepid. 
• Flows into ASEAN remain negative – the lack of recovery, we think, is due to lack of macroeconomic catalysts, declining EPS estimates and trade related worries. We remain underweight ASEAN.
• We are overweight Korea (recovering EPS, cheapest, flows accelerating). We like Taiwanese tech, key beneficiary of investors’ renewed AI enthusiasm. Overweight on India, despite its overvaluation, stems from bottom-up ideas.

• Discussion covers topics including dollar signals, $CNY fixes, tariffs, and observations on Swiss and sterling
• Dollar remains bearish despite some systematic signals turning less bearish or even bullish
• Client sentiment may be shifting tactically towards throwing in the towel on the bearish dollar trend due to technical patterns, but long-term view remains unchanged

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• Trump announced a 50% Section 232 base tariff on copper imports starting August 1st
• The details of the tariff, including which products it applies to and any exemptions, remain unknown
• The arbitrage between London LME prices and US Comex prices has widened following the tariff announcement, with implications for copper prices in both regions.

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• While it may seem as a logical step to compare the current cash price with the forward futures contract, that’s unfortunately way too easy to justify such a statement.
• In fact, it is even miss-information.
• What makes more sense is to look at the input cost factors and the forecasts for these components that the USDA is providing. 

• In Japan, disastrous showing of the LDP party in the Tokyo local elections, was its political Kamikaze. The true test will come with this month’s Upper House elections. 
• Voter frustration is mounting over the high cost of living. Real wages are contracting and retail sales volumes weakening.
• The Bank of Japan has changed tack and Trading Post is following suit, now forecasting that the policy interest rate will stay on hold for the rest of 2025.

• Asia’s base oils demand shows signs of facing weaker-than-usual pressure from expected seasonal slowdown in consumption coming weeks.
• Firmer prices for light grades relative to heavy grades, for Group I SN 500, and for prices in India point to ongoing pockets of buying interest even with seasonal slowdown in demand.
• Prices for Group II heavy grades by contrast weaken vs light grades and vs Group I base oils.

• We have been fairly cautious on equities in the past, but that’s changing. There is a bullish elephant in the room that is becoming evident and can’t be ignored.
• Market psychology had panicked and became overly concerned about left-tail risk. . Better, or less bad, news emerged and price momentum became dominant.
• Our base case scenario calls for the rally to continue into the August–September time frame.

• The passage of the Big Beautiful Bill in the US has raised concerns about the sustainability of sovereign debt across the world’s major economies. Demand for US Treasuries remains high.
• The seizure of Russia’s foreign exchange reserves raised concerns about the wisdom of holding dollar reserve assets, but there are currently no viable alternatives to US sovereign debt exposure.
• Governments have a range of choices for debt management, ranging from austerity to growth. The US is unlikely to ever embrace austerity and is better positioned to pursue growth strategies.

• We had called iron ore Iron Ore: Small Bounce From 96 to 100 USD/Ton As China Mill Margins Turn Positive, and we are now at 99 USD/ton.
• We continue to see mill margins benefit and the restock in the chain, including coking coal, which has started to move up, and forecast a gradual uptick to 110 USD/ton.
• We express our bullishness through owning Fenix Resources (FEX AU), a small-cap iron ore miner (read: Fenix Resources (FEX AU): Q3 FY25 Concall Update + CZR News ) 

• The Hong Kong Alpha portfolio has significantly outperformed the Hong Kong indexes in June and since inception. Outperformance range is 17% to 23% since inception.
• At the end of June, we sold positions in the tech sector after substantial gains. The portfolio’s exposure to the consumption sector was also trimmed, both discretionary and staples.
• The portfolio added exposure to the metals refining sector and initiated positions in conglomerates Shanghai Industrial Holdings (363 HK) and Citic Ltd (267 HK) .

• Silver prices have rallied ~24% over the past 12 months, driven by strong industrial demand (solar, EVs) and renewed investor interest amid inflation concerns.
• With a fourth consecutive market deficit and accelerating demand from clean energy applications, the setup points to a multi-year bullish cycle—especially if real rates remain subdued.
• This report provides a comprehensive analysis of the silver market’s recent performance, long-term demand-supply dynamics, key producers’ sensitivity to price movements, and valuation-driven investment opportunities.

• Trump kicked the tariff can a few weeks to 1 August, leaving other policymakers and markets in a wait-and-see mode. Pricing was little changed amid little news elsewhere.
• We thematically explored the market implications of resilience rolling cuts later, how healthy the US labour market data is, and dug into the UK’s political problems.
• Next week’s UK labour market and inflation data are critical ahead of an August BoE decision we believe remains finely balanced. US and EA inflation are other highlights.

• Amid the uncertainty surrounding the trade negotiations, Asian economies will have to provide fiscal and monetary boost to their domestic economies. They can’t rely on exports to sustain their growth.
• Asian economies shall likely provide more monetary stimuli than fiscal. Rapidly declining inflation affords their central banks larger wiggle room. China, Korea India, Indonesia, Philippines have room to cut rates.
• Fiscal stimulus is more contentious. China and Indonesia have articulated targets of expanding fiscal deficit and public debt. Korea’s low public debt and low bond yield affords some fiscal room. 

• Japan faces falling real wages and persistent inflation, with policy inaction likely to continue until late 2025.

• The Vietnam-US trade deal risks undermining WTO rules and global trade norms.

• China’s falling producer prices reflect healthy economic adjustment through market-driven consolidation.

• Trump signs executive order reducing tariffs on UK exports and lowering taxes on Chinese goods
• US and China announce reduction in tariffs, leading to relief for Americans and investors
• Despite initial shock and market volatility, US economy appears to be holding up despite tariff impacts

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• India’s $736.3 billion external debt creates liquidity risks with 42.4% short-term obligations, while ECB borrowings surge five-fold to $7.8 billion in Q4 FY25.
• Trump’s 26% reciprocal tariff threat appears as negotiating theater rather than economic warfare, with 90-day suspension revealing choreographed concessions strategy.
• India’s $696.65 billion forex reserves provide 11-month import cover, but widening trade deficits and debt vulnerabilities challenge long-term resilience narratives.

• Iron ore demand remains strong as supply tightens from Australia and Brazil, and China pushes for industrial reforms that could support raw material prices.
• Despite macroeconomic headwinds and Malaysian tariffs on Chinese steel, robust mill profits, and limited production curbs are expected to sustain iron ore demand.
• Prices are trading above key moving averages, suggesting ongoing upside momentum, while the MACD above its signal line confirms the prevailing bullish bias.

• Property / In Depth: The scam that turned China’s housing slump into a cash machine
• Education /In Depth: China’s preschoolers are stilling cramming for first grade
• Thailand /: Thailand’s casino plans stall amid political turmoil

• Despite headlines about BRICS alternatives, gold hoarding, and China’s reduced U.S. Treasury holdings, the data shows no structural shift away from the dollar.
• A 10% decline in the DXY under six months is not an uncommon  occurence from a longer term perspective.  
• The dollar’s weakness is driven by a historically overvalued real effective exchange rate (REER)  and falling oil prices, not a structural decline.

• Rising continuing claims in recent months have been heralded as a canary warning of belated suffering in the labour market. But the problem is ending before it ever began.
• US employment growth is still aligned with its long-run average, and the unemployment rate is unchanged on the year. Openings and quits are also steady with averages.
• The Fed needs excess disinflation to cut, and we believe this won’t materialise. That also avoids demand and policy pressure on the BoE and ECB, helping them hold rates.

• Rubber Board undertakes nationwide EUDR sensitization drives  
• Geo-mapping and traceability systems scaled up across states  
•  Low-risk status to come under EU review in 2026

• Inflation could once again fall below 4.0% in July, reflecting a base effect.
• In recent months, inflation has rebounded, reaching its highest point in May at 4.42%.
• This increase reflects the seasonal pressure typically seen in agricultural products during July and August.

• Solar / In Depth: China’s polysilicon majors plan to bail out rest of glut-stricken industry
• Tariffs /: Vietnam imposes anti-dumping tariffs on Chinese steel amid rising U.S. pressure
• Alzheimer /: China halts experimental Alzheimer’s surgery, leaving patients in limbo

• In the second half of June, inflation stood at 0.16% biweekly, contributing to a decline in the annual rate to 4.13%.
• We expect this downward trend to continue in the short term.
• The figure came in slightly above both the market consensus and our forecast, which were both at 0.13% biweekly.

• The Bank of Korea held its base rate at 2.50% as expected, pausing its easing cycle after household loans surged 6.5 trillion won in June and housing prices accelerated in Seoul, demonstrating that financial stability concerns now outweigh immediate growth support needs.
• While economic growth remains subdued with a revised 0.8% forecast for 2025 and trade uncertainty persists, the Committee prioritised evaluating recently strengthened household debt management measures over additional monetary stimulus, signalling a defensive policy stance.
• Future rate cuts remain contingent on financial stability developments and external conditions, with September presenting the next likely opportunity for easing if household debt growth moderates and US-Korea trade relations stabilise.

• A year of lackluster growth plans in the Industrial Real Estate sector doesn’t mean that opportunities aren’t there.
• While our outlook in the overall Real Estate industry is neutral, we are mostly positive on Industrial Real Estate, given its long-term horizon, tenant stickiness, and diversification between internal (i.e., in logistics and e-commerce) and external (i.e., in manufacturing) drivers.
• While we expect growth to slow down this year due to current trade uncertainties and the high growth exhibited by these companies in the last couple of years, 2026 onwards could turn to a more positive trend.

• Labour failed to campaign on a platform up to the UK’s structural problems, depriving it of the support to deliver change in its first year. Reform UK now lead most polls.
• Spending cut U-turns compound the fiscal hole exposed by the slippage of optimistic assumptions, making further tax hikes and more persistent deficits seem inevitable.
• Far-centrism has been rejected, but challenges to Labour’s right and left break its ability to triangulate back towards success. Investors may not stay so forgiving.

• Germany’s GDP declined 0.2% in 2024, Japan’s industrial production contracted 1.1%. Meanwhile, America’s service-focused economy outperforms manufacturing-heavy competitors consistently.
• Tooling costs are 10x higher in America than China. Even 145% tariffs insufficient—need 350% tariffs to make domestic manufacturing viable.
• US services exports surpass lost manufacturing profits. Services employ 84% of private sector, pay more than manufacturing ($36 vs $35/hour).

• Surface Strength, Underlying Fragility: Despite record highs in U.S. equities, narrow market breadth, inter-market divergences, and macro-cycle pressures signal growing instability beneath the surface.
• Rising Tail Risks: Geopolitical tensions (e.g., fragile Iran-Israel ceasefire) and shifting U.S. trade policy (potential 70% tariffs) threaten to disrupt market momentum and trigger volatility.
• Prepare for Inflection: Timing models and liquidity indicators point to a Q3 turning point; investors should rebalance toward quality, raise cash, and deploy tactical hedges ahead of possible late-year turbulence.

• The RBNZ unanimously held the OCR at 3.25% after six consecutive cuts, marking the first pause in its easing cycle as inflation edges towards the top of the 1-3% target band.
• The Committee maintains an explicit easing bias, signalling that further rate cuts are expected if medium-term inflation pressures continue to ease as projected.
• Future monetary policy decisions will be heavily influenced by global trade tensions, domestic economic recovery momentum, and inflation expectations amid an explicitly uncertain outlook.

• BNM trimmed the OPR to 2.75%, a move anticipated by just over half of surveyed economists, reflecting a mildly surprising tilt towards accommodation.
• Future rate decisions hinge on tariff negotiations, subsidy rationalisation, and whether subdued core inflation persists within the 1.5%–2.5% comfort band.
• With liquidity bolstered by an earlier SRR cut and inflation benign, the MPC retains scope for one further 25 bp reduction should external demand weaken further, but ringgit stability and fiscal adjustments will temper the pace of any additional easing.

• Beijing’s push to cut inefficient capacity may support steel margins and create a steady floor for iron ore prices.
• Malaysia’s anti-dumping tariffs of 3.86-57.90% target Chinese steel exports, posing limited short-term impact but signalling broader risks to China’s iron ore demand over time.
• Portside inventories may continue rising as iron ore arrivals increase and weak pig iron output slows cargo pick-up across Chinese ports.

• Huawei /: Huawei cedes some control over sales to automaking partners, sources say
• IPO /: Li Ka-shing’s son takes insurer FWD public in Hong Kong
• Hikvision /: Chinese surveillance-gear maker fights Canadian ban

• Dovish market fears from April have unwound for the Fed, yet deepened for the BoE, despite broadly resilient data and cautious guidance from policymakers reluctant to cut.
• Equity prices have relied on this resilience to recover, yet expectations for extended rate-cutting cycles imply it breaks. Payrolls only forced half of the gap to close.
• We expect ongoing resilience to keep rolling market pricing for rate cuts later, with the unnecessary easing ultimately never being delivered by the BoE, Fed, or ECB.

• Trump offers another three weeks of reprieve on reciprocal tariffs with an extension of the deadline to 1 Aug from 9 July
• Tariffs remain cumbersome for Asia despite some reductions. Japan and Malaysia see 1ppt increase.
• Ongoing development reinforce our core views of a slowdown in H2 and more monetary easing. However, relative forecasts are subject to re-evaluation.

• Global upstream oil and gas development spending is expected to decline by about 1.1% to $543 billion, with reductions in all regions except the Middle East
• Major Chinese National Oil companies, US E&P operators, and Russian companies like Gazprom are all cutting their capital spending in response to lower oil prices and increased costs due to tariffs
• Despite strategic shifts towards low carbon projects, there is a significant reduction in investment in these areas, with upstream investment not seeing any benefits

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• Market participants should look at a bigger picture view of positioning in US equities, rather than narrow metrics like IMM or market participants only
• European countries, as well as Canada and Australia, are large holders of US equities, with pension funds being major players
• Australian pension funds have over 800 billion in US equities, with a flow rate of 1.2% of GDP going into foreign equities, and have low FX hedge ratios which could be raised in the future

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• Overall bearish market conditions in China
• Mixed trade data underscore tepid demand conditions
• Arbitrage window might open as spread between Chinese and international prices narrows 

• U.S. Copper Market Gap: 1.3 Mt refined copper supply gap due to limited 0.4 Mt refining capacity against 1.7 Mt demand, despite 1.1 Mt mined ore.
• Impact on Market and Users: 50% tariff may raise prices 15–25%, adding $200–400/vehicle and 3–5% construction costs, while boosting refining investment.
• Way Forward: Expand refining capacity, streamline permitting, and ensure policy stability to process exported ore and cut import reliance by 2030.

• COMEX spreads blew out to over 2,500 USD/ton (a ~25% premium) last night as President Trump announced a likelihood of a 50% import tariff on the metal. 
• We believe this move will deplete inventories further at the LME (to be shipped to the COMEX) and lead to a rally in copper prices on the LME as well.
• Follow our prior insight, Copper Breaches 10k USD: Easy Journey to 11k USD/Ton On Lower Inventories In The Short Term 

• The podcast episode discusses the shift towards systematic global macro investing and the advantages of using quantitative models and algorithms.
• The sources highlight the importance of technology and data in driving this shift, but also emphasize the value of human judgment in certain situations.
• Listeners are encouraged to explore the freely available Google Colab Jupyter notebook for replicating sector performance analysis discussed in the episode.

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• Property / Cover Story: Developers impose deeper ‘haircuts’ on creditors in latest debt overhauls
• Livestreaming /In Depth: China’s livestreaming apps face a reckoning over gambling
• Refugees /: Global displaced population hits record as UN refugee agency faces funding cuts

• The RBA surprised markets by maintaining the cash rate at 3.85%, rejecting consensus expectations for a cut and citing the need for further confirmation that inflation is sustainably on track to the 2.5% midpoint.
• The decision reflects persistent uncertainty in the global economic environment and a domestic outlook characterised by robust labour market conditions but only gradual recovery in household demand, with risks on both sides of the inflation outlook.
• The Board’s split vote and explicit data-dependent stance signal that future interest rate decisions will be highly sensitive to forthcoming inflation and labour market data, as well as evolving international developments.

• Economic activity is robust with a tight labour market.
• Price and wage inflation are generally above 2%.
• Despite predictions of a downturn, the current economic regime remains stable.

• Structural drivers of the USD’s dominance are weakening, but powerful network effects, unrivalled market depth and lack of viable alternatives will prevent a full dethronement.   
• Rather than a single replacement, a multicurrency reserve system is set to emerge — which includes several Asian currencies — especially in trade settlement and funding. 
• Given Asia’s extensive holdings of USD assets, even a slight shift in allocations could send reverberations across currency and financial markets.

• Crude oil soared on conflict and sank just as fast on ceasefire. Prices surged to a 5-month high following the U.S. strikes on three Iranian nuclear facilities.
• June’s price action was driven by geopolitical shocks, not sustained fundamentals. Oversupply concerns remain dominant.
• On 05/Jul, eight key members of OPEC+ alliance agreed to raise oil output in August. Instead of the anticipated 411kbpd increase, the group opted for a steeper hike of 548kbpd.

• It had looked like the big story for June was going to be how Build Back Better, the Globalist Mantra used to cover for a huge increase in spending on the Green Industrial Complex, was being attacked by the proposed spending constraints under a different BBB, the Big Beautiful Bill that is now in the process of going through the Senate.
• Until that is we got a third BBB, the Bunker Busting Bomb as the US bombed Iran.
• As we discussed in the Ratchet and the Sausage Machine, the fall out over the BB Bill between Trump and Musk was less one of direction and more one of ideological purity; Musk despises the pork barrel nature of US political horse trading while Trump 2.0 recognises what is needed to get things done – in this case fulfil his pre election promises and prevent his previous tax cuts from being reversed.

• It is essential to track and evaluate the global economy amid a multitude of negative and positive shocks at this time
• My experimental Diffusion of Growth Indicator (DoGI) offers a timely directional view of the global economy
• The signals from the DoGI combined with the breadth of GDP contractions can effectively assess the likelihood of a global recession

• During the week, Trump muscled his Big Beautiful Bill through a divided congress. With that, the bill got passed even right before 4th of July.
• The nearly-900 page bill includes a tax-cut and spending package that is projected to increase the national debt by $3.3 trillion over a decade.
• Cost-saving to reduce the government debt seems to be completely from the table. The DODGE department seems compared to this bill like a joke.

• Asia’s base oils price-premium to Singapore gasoil price stays at elevated levels for heavy grades, lower-than-usual levels for light grades.
• Base oils margins incentivize refiners to maintain higher production levels for heavy grades, and to consider adjusting production levels for light grades.
• Any such moves to maintain or adjust output would coincide with rise in regional production capacity following completion of most plant-maintenance work.

• For the week ending 03/Jul, U.S. natural gas prices fell by 8.8% due to cooler weather forecasts, rising output, and U.S. natural gas storage builds.
• For the week ending 27/Jun, the EIA reported that U.S. natural gas inventories rose by 55 Bcf, higher than analyst expectations of a 48 Bcf build.
• Henry Hub OI PCR rose to 0.86 on 03/Jul compared to 0.85 on 27/Jun. Call OI grew by 4.5% WoW, while put OI increased by 5.3%.

• US Group II export base oils price-premium to vacuum gasoil starts Q3 2025 at slightly lower levels than at start of Q3 2024.
• In Q3 2024, US base oils price premium to VGO extends rise after surging from end-Q1 2024.
• US base oils price-premium to VGO extends surge in Q3 2024 even with less feasible arbitrage to outlets like Europe, Middle East and India.

• Global base oils values mostly hold firm versus feedstock/competing fuel prices, even as they remain down from recent highs in Q2 2025.
• Firm base oils margins coincide with strong diesel premium to crude oil that incentivizes refiners to boost output of the motor fuel.
• Any such move would likely impact light-grade base oils more than heavy grades, whose firm margins incentivize refiners to maintain high output of the product.