Global Rates

Major global data day. Three prints that matter: (1) Japan Tankan Q2 Large Manufacturers: +22 vs +16 expected (up from +17 prior) — a 6pp beat that confirms the Japanese business cycle is accelerating. Tankan Outlook +17 vs +13. Non-Manufacturing +37. This is the strongest signal yet that the BoJ September hike thesis is fundamentally sound — manufacturers are not deterred by the AI tech selloff that gripped Nasdaq last week. (2) EUR CPI June Flash: 2.8% YoY, down from 3.2% in May. Energy drove the drop (8.7% vs 10.8%). Services cooled slightly (3.2% vs 3.5%). This removes ECB hike risk entirely and confirms the WTI-driven disinflation pipeline is flowing through European CPI with roughly a 6-week lag. (3) Doha talks: no joint US-Iran statement. Iran refused direct meetings; Witkoff/Kushner met only Qatari mediators. The $6B frozen asset dispute is blocking MOU compliance — Iran wants assets released, US insists on agricultural-products-only use. Physical Hormuz flows continuing (WTI ~$70) but the diplomatic track is fracturing. For global rates: 10Y UST at 4.47% (+10bp from lows) with NFP tomorrow — the bond market is positioning for a hot print. If NFP beats, US rates rip higher and global rate floors rise. EUR Bund yields likely move +5-8bp in sympathy. USD/JPY may push toward 162-163 on dollar strength. This sets up the BoJ entry trade more attractively — higher USD/JPY = more BoJ urgency. Q2 close scorecard: S&P +14%, Nikkei +9%, DAX +7%, Gold +11%.