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Top of Mind - UK Politics – PM Starmer resigns, what comes next?

UK Prime Minister Starmer has resigned. The decision did not come as a surprise following his rival Andy Burnham’s landslide victory at last Thursday’s by-election. As we said in our Top of Mind webinar, Burnham will almost certainly go on to become the UK’s next prime minister. Indeed, one of his closest rivals Wes Streeting also came out this morning to endorse Andy Burnham, and it is possible that Burnham may become PM unopposed. Other possible challengers such as Angela Rayner and Ed Miliband have yet to explicitly state their stance.

ESG Economist - Europe’s path to energy security

Expanding renewable energy sources, alongside investments in grids, storage, and supply chains, creates a sustainable and affordable energy system while reducing import dependency. Despite progress, projections show a significant gap between the current trajectory and the 2030 targets, prolonging reliance on imported fossil fuels and increasing geopolitical risks. Reducing energy intensity and improving efficiency decouples economic growth from energy consumption, strengthening competitiveness and lowering exposure to volatile energy markets. The expansion of electrification, based on the expansion of renewable energy, is crucial to safeguarding the EU’s energy security. Energy efficiency, innovation and the reuse of raw materials make countries less dependent on volatile energy markets and imports. Expanding storage capacity, refining facilities, and grid infrastructure ensures stability during energy crises and supports the transition to renewables. Integration of cross-border energy systems, aligned policies, and collaborative strategies strengthen resilience and reduce dependencies on external suppliers.

Top of Mind - UK & BoE outlook post-Makerfield

Andy Burnham won the Makerfield by-election, and he will now almost certainly go on to enter Number 10 Downing Street. What would that mean for the UK economy and for interest rates? In this Top of Mind call, Bill Diviney takes stock of both the election and Thursday’s Bank of England meeting, with an update on our latest expectation for the economy and monetary policy. Larissa Fritz then discusses the impact on gilt markets, while Georgette Boele discusses the outlook for sterling.

FOMC Watch – Half the board sees rate hikes, Warsh gives no guidance

In a unanimous decision, the Fed held the benchmark rate in the 3.5-3.75% range. As expected, the statement removed the reference to additional rate adjustments, paving the road for unanimity. In a first change to communication, it actually removed over half the content. Still, there were some important takeaways. Taking away any fear of shrinking the balance sheet, it added ‘the committee reaffirmed its policy of maintaining ample reserves in the banking system,’ although an implementation note on SOMA holdings casts some doubt about the pace over the coming months. The tone on recent data is slightly more dovish. It added that productivity and capital investment are strong, and it changed the wording of job gains from low to ‘kept pace with the workforce,’ which still implies low. It ends with a short and strong hawkish statement balancing out the overall narrative: ‘The Committee will deliver price stability.’ That’s clearly only half the mandate.

FX Weekly - Dollar risks move back to centre stage

Markets are refocusing on rate spreads, real yields and US structural risks as oil-price concerns fade. A Warsh-led Fed could raise policy uncertainty and add to the risk premium in Treasuries. Fed/ECB divergence supports our view that EUR/USD can move towards 1.20 by year-end. US fiscal and external vulnerabilities point to further dollar weakness over the medium term.

Gas Market Monitor - Gas markets find relief as Europe races to refill storage

Europe’s reliance on LNG has increased since 2022, raising its exposure to global LNG disruptions; the US supplied 58% of European LNG imports in 2025. European gas prices initially surged on the Iran conflict but later eased as Asian demand weakened and US LNG inflows increased. The US-Iran agreement provided further relief, pushing TTF prices around 15% lower, although short term prices remain higher than long term ones. High injection-season prices have discouraged storage filling, leaving EU storage at a seasonal low of 44.7%. Stable Norwegian and US inflows, returning Qatari supply, and weaker Asian competition should allow Europe to reach around 75% storage by October. However, renewed conflict, supply disruptions, adverse weather, or project delays could slow replenishment and keep prices elevated. We expect gas prices to remain above seasonal averages, averaging 46 EUR/MWh in Q2, 43 EUR/MWh in Q3, and around 48 EUR/MWh during the heating season.

Top of Mind - A new chapter for the Fed

Kevin Warsh is about to chair his first FOMC meeting, after being confirmed against a political background. Warsh inherits a difficult policy environment where the US is hit by three concurrent shocks: tariffs, the energy supply shock and the AI investment boom. These shocks put pressure on his ability to pursue his goals. In this webinar, Rogier Quaedvlieg, Larissa de Barros Fritz and Georgette Boele will walk you through their assessment of the Warsh’s likely policy aims, as well as their feasibility given current economic constraints. They will also discuss the potential implications for rates and the dollar.

US and Iran strike a deal - What’s next?

A new Fed Chair in a more fragile Treasury market

Fed Chair transitions have historically been followed by higher Treasury yields, as markets reprice policy uncertainty and the incoming Chair’s reaction function. This post-transition rise in Treasury yields is still yet to materialize. Any repricing under Warsh may be more persistent than in past transitions because he takes over an already fragile Treasury market. Warsh’s preference for lower rates may support the front-end of the curve, but concerns about political pressure, reduced transparency and conviction-based policymaking could keep term premia and long-end yields under upward pressure. Even a gradual reduction in the Fed’s balance sheet would matter for Treasuries, because it raises free float and shifts more duration risk onto investors with less stable demand. Rising Treasury issuance and a worsening fiscal backdrop mean that higher yields increasingly feed back into debt-servicing costs, rollover risk and term premia. The shift away from foreign and official buyers toward more cyclical domestic investors makes Treasury demand less stable, reducing the market’s ability to absorb growing supply without higher term premia.

ECB suggests more hikes to come

The ECB raised interest rates by 25bp at the June Governing Council meeting as was widely expected. Its communication and forecasts suggested that there will likely be more rate hikes to come.