JPM International Market Intelligence | Morning Briefing

20 SECONDS: Climbing over the ‘FOMC wall of worry’. Energy markets & alternatives. EU protectionism & China trade. Critical Chemicals the new SRI? BOE preview. Greek banks.

• Relief across US/EA futures after climbing the ‘FOMC wall of worry’ (APAC lagging). US Tech outperformed as long-end paired losses, with Fed’s hawkish lean helping ease credibility fears. Latest Flows & Liquidity delves into tech bond issuance and upward pressure on global yields.

• Oil extending moves lower as Saudis look to resume half of pipeline capacity and Axios reporting Trump to meet Gulf leaders next week. But signs of China’s return to oil markets continue to mount (Shanghai futures have surged above Brent, chart below).

• Coal is back in focus. The cost of EU carbon emissions jumped to highest level since Jan as costs of burning coal relatively attractive. Supply shocks in Asia also contributing to rising coal prices.

• Day 2 of the Behind-the-Meter deep dive relevant as ever, as data center pressure continues to mount in US: county in Virginia’s ‘Data Center Alley’ advanced a measure that would pause the review of new data center applications for up to 12 months.

• EU Protectionism & China trade tensions key themes in von der Leyen’s State of the European Union speech. Bloomberg estimates ‘China Shock 2.0’, where European producers face more direct competition at home, cost Europe ~0.7% of GDP last year.

• While Europe’s stance has recently toughened against China (Germany’s shift is notable), we think the upcoming political calendar limits ambitions. EU-China trade scenarios below.

• Could Critical Chemicals become the new SRI target for protectionist measures? Often overlooked, research highlights supply chain risk for sectors incl. semis, pharma, defense, agri, and energy.

• Today all eyes on BOE. Econ and markets expect MPC to stay on hold (next hike priced for Nov), but keep an eye on QT announcement: our UK desk flags the market is expecting the removal of long-end QT for next year, so a surprise here would likely drive a bear steepening in the curve.

• Why Greek Banks deserve your attention: a guide for new investors as the sector joins SX7E at the September rebalance.