Morning Bid: Yen bounces as Japan PM hangs on
Treasury yields fell across the curve to 10-day lows - after rallying last week on a combination of benign producer price and inflation expectations readings as well as comments from Federal Reserve board dove Christopher Waller that he's still in favor of resuming interest rate cuts as soon as this month.
Waller said on Friday he would accept the job as head of the U.S. central bank if asked by President Donald Trump, but so far Trump had not contacted him about it.
With the Fed outlook now confused by persistent White House pressure on Chair Jerome Powell and the outside chance that Trump attempts to fire him before his term expires next year, last week's incoming price data has offered some comfort.
Fed futures reflect a near 70% chance of another Fed cut by September.
But the Wall Street Journal reported on Monday that Treasury Secretary Scott Bessent had counseled Trump not to fire Powell, given the financial disruption that might cause.
Trump, who sued the WSJ and its owners including Rupert Murdoch for at least $10 billion on Friday over the newspaper's report on a 2003 birthday greeting from Trump to sex offender Jeffrey Epstein, denied the latest WSJ report on Bessent too.
Stock markets were steady to higher across the world, with Wall Street stock futures up ahead Monday's bell.
Helping the mood, U.S. Commerce Secretary Howard Lutnick said on Sunday he was confident that Washington can secure a trade deal with the European Union, but August 1 is a hard deadline for tariffs to kick in. Lutnick said he had just gotten off the phone with European trade negotiators and there was "plenty of room" for agreement.
Meantime, China's foreign ministry said European Commission President Ursula von der Leyen and European Council President Antonio Costa will meet with Chinese President Xi Jinping on Thursday.
The corporate earnings season unfolds during the week, meantime, with Tesla and Alphabet - two underperforming megacaps this year - reporting on Wednesday.
In Europe, Ryanair surged more than 6% as Europe's largest low-cost carrier's net profit more than doubled in its April-June quarter.
Chart of the day
China's exports of rare earth magnets to the United States in June soared to more than seven times their May level, marking a sharp recovery in the flow of critical minerals used in electric vehicles, wind turbines and missiles after a Sino-U.S. trade deal. China, which provides more than 90% of the global supply of rare earth magnets, decided in early April to add several rare earth items to its export restriction list in retaliation for U.S. tariffs - creating major supply chain problems for many firms and industries.
But the two countries hammered out an agreement last month to resolve the issue - one in which Washington allowed chipmaker Nvidia to resume sales of its H20 AI chips to China. Separately, China has quietly issued its first 2025 rare earth mining and smelting quotas without the typical public statement - another sign of Beijing tightening its control over the crucial sector.
Today's events to watch
* U.S. June leading indicator (8:30 AM EDT); Canada June producer price report
* U.S. corporate earnings: Verizon, Domino's Pizza, Steel Dynamics, WR Berkley, NXP, Roper, Alexandria Real Estate
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(by Mike Dolan; editing by Christina Fincher)
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