THE MARKET DESK

The Daily Dispatch

A digest of macro, policy, corporate and global affairs.

WIRE

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US Macro

WASHINGTON, TUESDAY.

Fed Minutes Point to Prolonged Plateau in Policy Rate

Members split on timing of first cut as services inflation proves sticky.

AI Summary·FOMC minutes: rates on hold; members split on cut timing. Services inflation sticky; real rates seen as passively tightening. Markets little changed, cuts trimmed.

The latest minutes of the Federal Open Market Committee reveal a membership that remains united on the direction of travel but divided on the pace. Most participants judged that restrictive policy should be maintained "for some time", even as the committee acknowledged further cooling in the labour market.

Several members pointed to the persistence of services inflation, particularly in shelter and insurance, as justification for patience. A smaller group argued that real rates have risen mechanically as headline disinflation proceeds, and that the stance is thus tighter than intended.

Markets took the release in stride; the 2-year Treasury yield finished the session unchanged, while Fed funds futures trimmed cuts priced for the current calendar year.

— By the Washington Bureau

China Macro

BEIJING, TUESDAY.

PBOC Leaves Medium-Term Rate Unchanged, Drains Liquidity on Margin

AI Summary·PBOC keeps MLF rate flat, small net drain. Interbank rates drift higher within corridor; onshore equities give back early gains on patient stance.

The People's Bank of China rolled over its medium-term lending facility at the prevailing rate while conducting a modest net withdrawal of liquidity via the operation. Analysts characterised the stance as patient rather than hawkish.

Interbank rates ticked modestly higher; the fix of the 7-day repo rate came in a handful of basis points above the policy corridor floor. Onshore equity markets pared early gains on the announcement but finished with only minor losses.

— By the Beijing Wire

US Macro

NEW YORK, TUESDAY.

Treasury Issuance Slate Leans Heavily to the Belly

AI Summary·US refunding tilts new supply to 5–7Y; long-end sizes unchanged. Dealers see deliberate term-premium management; 10Y auction direct bids in focus.

The quarterly refunding announcement confirmed what dealers had expected: a tilt of net new issuance toward 5- and 7-year maturities, with long-end auction sizes held flat for a second straight quarter.

Primary dealers read the composition as an attempt to manage term premium without signalling concern about demand for duration. The 10-year auction this week will be watched for direct-bid statistics as the marginal gauge of end-user appetite.

— By the New York Desk

China Macro

SHANGHAI, TUESDAY.

Industrial Profit Growth Moderates as Upstream Margins Narrow

AI Summary·China industrial profits moderate; upstream margins narrow, midstream improves. Debate continues on whether output recovery is broadening beyond exports and new-energy categories.

Industrial firms reported a narrower year-on-year gain in profits versus the prior month, with the moderation concentrated in upstream raw-materials sectors. Midstream processors, by contrast, eked out an expansion in operating margins.

The release will feed the debate over whether the nascent recovery in industrial output is broadening beyond the export-facing segments or remains narrowly led by select technology and new-energy categories.

— By the Shanghai Bureau

Industry & Policy

BRUSSELS, TUESDAY.

EU Competition Authority Opens Probe Into Cloud Licensing

AI Summary·EU opens formal probe into cloud licensing portability clauses. Statement of objections expected in autumn; procurement talks at major banks to feel the overhang.

The European Commission opened a formal investigation into licensing practices in the public cloud market, following complaints from a group of downstream software vendors that portability clauses effectively penalise rival infrastructure choices.

A preliminary statement of objections is not expected before the autumn; the case will nevertheless loom over ongoing procurement discussions across the continent's largest financial-services customers.

— By the Brussels Desk

Corporate

SAN FRANCISCO, TUESDAY.

Semiconductor Capex Guidance Tightened on Mix Shift

AI Summary·Chip-tool vendor trims capex ceiling on mix shift toward advanced-node orders. Not a demand cut; reinforces two-track view: AI pulling forward, commodity memory waiting.

A leading semiconductor equipment vendor trimmed the upper end of its fiscal capital-spending guidance, citing a richer mix of advanced-node orders that defer, rather than cancel, trailing-edge expansion projects.

Management emphasised that the revision did not reflect a demand shortfall. Sell-side analysts read the print as consistent with a two-track industry: AI-infrastructure orders pulling forward, commodity-DRAM capacity waiting on a clearer cyclical signal.

— By the San Francisco Bureau

LONDON, TUESDAY.

Big Oil Cuts Buybacks as Refining Cracks Compress

AI Summary·European oil majors slow buybacks on compressed refining cracks, soft chemicals. Dividends held; CDS widens modestly but remains within six-month range.

Two European integrated majors reduced the pace of their share-repurchase programmes for the next quarter, pointing to weaker refining cracks and a softer chemicals backdrop.

Dividends were untouched. Credit-default swap spreads on both issuers widened by a few basis points intraday but remained inside their six-month trading ranges.

— By the London Wire

Global

TOKYO, TUESDAY.

Yen Steadies After Currency Official Warns on Disorder

AI Summary·Japan currency official escalates verbal intervention warnings. Yen recovers intraday; short-dated USD/JPY implied volatility rises as desks reprice intervention risk.

Japan's top currency diplomat repeated that authorities would "not rule out any steps" against disorderly moves, a line read as a soft escalation after two weeks of one-way depreciation.

The yen recovered from the session lows; implied volatility on short-dated USD/JPY options rose modestly as option desks repriced intervention risk.

— By the Tokyo Bureau

LONDON, TUESDAY.

Brent Edges Higher on Draw in US Commercial Crude Stocks

AI Summary·Brent firm on US crude stock draw; products build leaves mix neutral. Calendar spreads steepen, prompt structure firms, signalling tightness at marginal barrel.

Brent front-month futures advanced on a larger-than-expected draw in US commercial crude inventories. Product stocks built, however, leaving the net read mixed.

Calendar spreads steepened slightly; the prompt-to-third-month structure firmed, consistent with a physical market that remains tight at the marginal barrel despite the weaker product picture.

— By the Commodities Desk