Daily Brief Macro: BoE Surveys Sustain Resilience and more

• The Decision Maker Panel and Credit Conditions Surveys remained resilient. Price and wage inflation are stuck at excessive levels, and US trade policy makes little difference.
• Default rates are falling while the availability and demand for credit are rising to reveal a loosening of monetary conditions. There is no evidence of policy being too tight.
• Inflation and labour market data matched BoE forecasts from May, when most members were biased to slow easing. Resilient surveys should discourage it from cutting again.

• FX volumes expected to remain steady in the next month and a half before potentially increasing later in Q3
• Dollar risk reversals are priced expensively for puts, suggesting the need for alternative option structures
• Consideration of bullish yen option trades in lower beta crossian underlyings like CNH as alternatives to dollar yen positions due to stretched spec positioning and high carry costs

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Exam / In Depth: Can China provide middle-schoolers long-promised exam relief?
• Tourism /: Thailand falls out of favor with Chinese tourists
• Drugs /: China cuts new path for commercial insurance holders to get pricey drugs

• China’s NBS Manufacturing PMI edged up to 49.7, while Caixin jumped to 50.4, highlighting a divergence driven by survey scope, timing, and domestic demand strength.
• Taiwan’s 20.15% steel tariffs may slash Chinese exports, triggering domestic oversupply, weaker prices, and reduced iron ore demand amid growing regional trade uncertainty.
• Portside inventories climbed as arrivals rose, outpacing stable port demand and pointing to further stockpile growth.

• OPEC maintained steady demand forecasts, while the IEA and EIA cut 2025 growth estimates. All agencies see limited near-term catalysts for a meaningful rise in global oil demand.
• OPEC, EIA, and IEA project rising oil supply, driven by non-OPEC producers and near-term OPEC+ overproduction.
• The EIA remains bullish on Henry Hub gas prices, forecasting strong demand and tightening supply through late 2025.

• Two weeks ago, we flagged our Tanker Equity Basket as a potentially interesting place to look for opportunities.
• The week after we flagged it, the basket bounced, presumably on events in the Middle East, and this week has given back most of those returns.
• The basket has now fallen below the 10-day moving average and is bouncing along the 200-day moving average.

• In H1, Asia climbed several walls of worry. Valuations are slightly higher than long-term average. H2 could be more modest, as export driven growth moderates and trade agreements become contentious.
• Our end-2025 targets are: MXASJ 850, SHCOMP 3760, Sensex 85000, HSI 26000, KOSPI 3400, TWSE 23500, Strait Times 4200, JCI 7450, SET 1150. Overweights on Korea, HK/China, India, continue.
• Asian currencies should continue to appreciate, driving more FII flows. Benign inflation and headroom for monetary easing are key tailwinds. We expect two rate cuts by the Fed in 2025.

• China’s soybean imports surged 129% MoM in May, yet excess inventory and weak feed demand continue to suppress soybean meal prices.
• Technical indicators turned bearish with a June 25 death cross and sustained price drop below the 50-day DMA.
• Despite near-term bearishness, call option buildup from July to November suggests medium-term recovery hopes.