Today’s Agenda: The sourness of Trump in Japan trade. Attack on oil tankers. The “big and beautiful” curse of Republicans. Labor Rebellion; Michael’s tensions over Zohran Mamdani and billionaires
good morning. Sales of risky corporate debt in Europe skyrocketed to around 23 billion euros last month, according to JPMorgan data, the highest ever.
Why is this happening? High-yield, or junk-rated companies benefit from lower borrowing costs, taking advantage of capital flights from the US market due to increased demand from investors. Yields move in reverse to price. Many investors have shifted allocations from the US due to President Donald Trump’s volatile trade policy and rising government debt. Despite strong rebounds in the US stock market in the second quarter, the ongoing movement from dollar bonds led the currency to its weakest start to this year.
What this means: Even companies that previously struggled to tap on the bond market are now accessible given the “massive amounts of cash to invest.” A problematic past issuer, or an issuer who offers complex and subordinate means, such as a lucrative bond — who can involve interest in the principal to pay back on maturity — is enthusiastically welcomed by investors. “Managers are eager to invest,” said one leveraged finance banker.
Here is the other thing we keep tabs today:
Economic data: The EU has published the number of workers in May.
China-EU bond: The king of China’s foreign minister meets Antonio Costa, chairman of the Council of Europe in Brussels.
Soccer: The Euro 2025 Women’s Championship begins, with Iceland playing Finland in Switzerland.
Five more top stories
1. Trump threatened to increase Japan’s taxes and threatened to impose new taxes on countries where his “mutual” tariffs are set to resume by next Wednesday. Picking out the US Asian allies, Trump said: “We’re not going to make a deal. I doubt that.”
EU Trade: European capitals have hardened their position and argued that the US will soon reduce tariffs on the bloc as part of the first phase agreement.
2. Deutsche Bank laid out a more sudden capital hit than expected from the Basel IV rules that change the way banks calculate risk. Under the new framework that will be fully implemented by 2033, the risk-weighted assets of German lenders could increase by a third. Please read the entire story.
Wall Street: Investors enjoyed the remuneration of Loser Bank supervision as the largest US bank announced a flood of shareholder payments yesterday.
Filling the SVB gap: A group of technology billionaires, including Peter Tiel, supports the launch of new lenders that intend to serve startups.
3. Exclusive: A series of mystical limpet mine attacks on oil tankers have shaken up the world of transportation, prompting speculation that the explosion is part of a state-backed sabotage campaign. All vessels called at Russian ports within weeks of the attack urged some security experts to suggest that Ukraine was taking on the explosion.
4. Exclusive: The EU is blocking UK attempts to join the UK’s European trade zone, according to officials on both sides. The UK announced it was considering whether to take part in the Pan Euro Mediterra convention as part of its new trade strategy released last week, claiming it would help boost exports of flagged goods.
5. Exclusive: Matthew Freud is considering the option to sell his PR consultant of the same name 40 years later as one of London’s top spin doctors. Those with knowledge of the details said Freud, including clients Johnny Eveve and Sir Lewis Hamilton, hired Boutique Investment Bank Robbie Warshaw to begin the process of finding a buyer.
New details
©ft Montage;Reuters/Getty Images
Trump has passed his “big, beautiful bill” slightly through the US Senate. However, the law still faces hurdles involving a home where some of his fellow Republicans threatened to vote against it. But even if the president can line them up, he is already facing a great job defending legislation in front of American citizens who appear to be sour.
We’re reading too. . .
Qantas: Australian airlines are investigating whether the hacking group targeting Mark and Spencer were behind the violations affecting 6MN customers.
Labour Rebels: Kiel Starmer’s plan to save £5 billion is lying in tatters after the prime minister is forced to water his flagship welfare bill.
Zohran Mamdani: The democratic socialists running to become mayor of New York City are wrong. Of course, there should be billionaires, writes Michael Stock of the American Institute of Corporate Research.
NHS: Brits don’t like problematic health systems. Will workers’ 10-year plans change their minds?
Join Stephen Bush, Miranda Green and Robert Elimsley tomorrow for a live Q&A with the Labour Party’s next move in 12 months of turbulence. Submit your questions here.
The chart of the day
Extensive research challenging the narrative that abstinence is driving the decline of the industry among young people shows that drinking has become more common among ZZs as baby boomers reduces alcohol consumption as baby boomers reduces alcohol consumption.
Take a break from the news
After a long, sunlit session, there are some great places to see Wimbledon in London, whether you’re looking for the nearest venue to bite your nails.
Islington Square, North London © Kensington Leverne
