EUROPEAN FIXED UPDATE: Alaska summit dominates an agenda packed with US data

USTs: +2 ticks, 111-27+

• A contained start to a day that, for US hours, is bookended by Import Prices/Retail Sales and the Alaska summit. Currently, holding around the unchanged mark in narrow 111-24+ to 111-30+ parameters, matching the low from Thursday and holding just ahead of 111-23 and 111-19+ from Wednesday and Tuesday respectively.


• Retail Sales are expected to rise +0.5% M/M in July (prev. +0.6%), with the ex-autos measure seen +0.3% M/M (prev. +0.5%), and the Control Group +0.4% M/M (prev. +0.5%). Into the series, Bank of America’s consumer checkpoint showed the highest growth rate since January for household card spending, +1.8% Y/Y. Furthermore, Fed’s Barkin (2027), this week said there were signs of improved consumer spending during July.


• Import Prices, which feed into PCE, are seen at 0.0% M/M (prev. 0.1%), while the Y/Y figure last came in at -0.2%. Ahead of it, ING writes that the Fed will be attentive, as “if import prices don’t start falling soon then that will signal US corporates are fully paying the tariff…”, and then have to choose to either take the margin hit, or pass it to consumers and push inflation higher.


• Followed by July Industrial Production, seen dipping to 0.0% (prev. 0.3%). Thereafter, August’s prelim. UoM Sentiment is expected to increase to 62 (prev. 61.7) while the Expectations figure is forecast to dip to 56.5 (prev. 57.7).


• The Alaska summit between US President Trump and Russian President Putin is set to begin at 20:00BST/15:00ET. Trump is, as it stands, set to depart Alaska for the White House seven hours later. During the meeting, we know there will be a one-on-one between the leaders followed by a broader discussion incl. other high-level officials.


• On Thursday, Trump gave a 25% chance that the meeting does not go well. Pertinently, Trump said he does not know if there will be a joint press conference, but he will do one regardless of the outcome; this is in contrast to the WH Press Secretary earlier on Thursday saying there would be a joint presser - full Newsquawk primer available on the feed.


• Note, just after the Alaska summit starts, we will get the latest TIC data for June.

Bunds: -26 ticks, 129.24

• A contained start to the day, initially holding around opening levels of 129.56 with newsflow very light and the European docket ahead thin.


• Into the European morning, gradual but notable pressure emerged with Bunds to a 129.20 low and softer by 30 ticks at most. No clear or specific catalysts behind the move; instead, it appears to be a function of the constructive European risk tone this morning, a tone that follows a strong APAC handover on the back of strong Japanese GDP as China shrugged off weak data though the Hang Seng succumbed to JD.com earnings.


• If the 129.20 base is taken out, we look to 129.06 from Wednesday and below that the figure and then the 128.98 WTD low Tuesday.


• For the day ahead, we are essentially waiting for any insight into or sources on the Alaska summit ahead of the 20:00BST start. Particularly, if any emerging deal re. Ukraine would require any security guarantees or funding commitments from Europe; though, such topics are likely to be the subject of a potential 2nd summit, if progress is made later today.

Gilts: -13 ticks, 91.44

• As discussed in Bunds, non-US newsflow has been and is scheduled to be very light today.


• Gilts began the day higher by just under 10 ticks, bouncing slightly from the pressure seen after US PPI yesterday given the marginal pick up off lows seen in USTs and Bunds overnight.


• Since, the benchmark has conformed directionally to Bunds but with magnitudes slightly more modest; a dynamic that can possibly be explained by the fact that, while still positive, the FTSE 100 is modestly underperforming European peers. But, to be clear, magnitudes are minimal and it is probably not worth reading too much into the action at this point in the session.


• In a 91.43-91.68 band, lower by 15 ticks at worst but holding with losses of around half that as it stands.

15 Aug 2025 - 09:50- ForexData- Source: Newsquawk