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Good morning and welcome back to FirstFT. Here’s what we are covering today:
Donald Trump is struggling to contain a spiralling crisis over his administration’s handling of the so-called Epstein files. Here’s what you need to know.
Why is Maga divided over Epstein? During last year’s election campaign Trump promised to release files relating to the late paedophile Jeffrey Epstein who had been at the centre of myriad conspiracy theories since his death in 2019, often at the hands of Trump’s closest allies. Last week the justice department and the FBI published a two-page memo after what they described as an “exhaustive review” of material relating to the disgraced paedophile. The memo concluded there was no “client list” and that Epstein died by suicide.
Why it matters: Before entering government, FBI director Kash Patel, deputy director Dan Bongino and attorney-general Pam Bondi were among the Trump supporters who publicly questioned whether Epstein killed himself or was murdered as part of a vast conspiracy to protect powerful people who had been associated with him. Bondi has become a target for Trump supporters unhappy with the results of the investigation. Former Fox News host Megyn Kelly labelled Bondi the “villain in this story” in a speech to a conservative conference over the weekend.
Here’s what else we’re keeping tabs on today:
Wall Street banks: JPMorgan Chase and Citigroup kick off second-quarter earnings season for the US’s biggest banks. Our live blog will be covering the results announcements which also include BlackRock and Wells Fargo.
Economic data: The US and Canada publish June consumer price indices.
Monetary policy: Federal Reserve vice-chair for Supervision Michelle Bowman gives the opening remarks at a conference hosted by the Federal Reserve.
Arizona primary: Voters pick candidates for a special election to fill the House of Representatives seat formerly held by Democrat Raúl Grijalva, who died in office in March. The Democrats are expected to hold the seat.
Five more top stories
1. Donald Trump has privately encouraged Ukraine to step up deep strikes on Russian territory, according to people briefed on a July 4 call between the US and Ukrainian presidents. Trump even asked Volodymyr Zelenskyy whether he could strike Moscow if the US provided long-range weapons. Read this exclusive story.
2. China’s economy expanded 5.2 per cent year on year in the second quarter as the world’s second-largest economy shrugged off the impact of Trump’s trade war. The rate of growth, which beat analysts’ expectations, shows how China has been able to keep growth on track through exports and investment even as it struggles with weak demand at home.
3. Israeli Prime Minister Benjamin Netanyahu’s government has been plunged into crisis after a Jewish ultra-Orthodox political party quit the ruling coalition. Seven parliamentarians from the United Torah Judaism party resigned in response to the government’s efforts to conscript religious seminary students into the military, leaving Netanyahu’s coalition with a one-seat majority in the Knesset. Read more on the political crisis.
4. Yields on 10-year Japanese government bonds hit their highest level since the 2008 financial crisis and 30-year borrowing costs hit a record high earlier today as investors grow increasingly nervous ahead of Sunday’s upper-house parliamentary elections. Polls suggest the ruling LDP will have to make concessions to high spending, populist parties after Sunday’s vote.
5. Calpers, the largest public pension fund in the US, has signalled an appetite for more exposure to private equity despite concerns that these assets could expose pensioners to too much risk. Stephen Gilmore, chief investment officer of the California Public Employees’ Retirement System, said it was “reasonable to expect our private equity exposure will continue to increase somewhat”. Read the full interview.
The Big Read
© FT montage/Getty Images
China’s BYD is catching up with Tesla and is poised to overtake its US rival in electric vehicle sales for the first time. In the past three years, the Chinese auto group has narrowed the technology gap between the two carmakers, including in autonomous driving. Read what is powering BYD’s headway in the EV market.
We’re also reading . . .
Chart of the day
Insurers are selling so-called catastrophe bonds at a record rate as they seek to offload the growing risk from climate change on to investors eager for high returns. Issuance of the instruments, which transfer part of the risk for events such as wildfires, hurricanes and earthquakes to bondholders, has surged to $18.1bn this year from a previous record of $17.7bn for the whole of 2024. Read more on the growing appeal of “cat bonds”.
Take a break from the news
Would you trust an algorithm to make you a suit? Swedish brand Blugiallo, using clients’ measurements, created a dataset of 1,000-plus unique sizes that could be turned into an algorithm to calculate a perfect fit for each customer — starting from £650. Is there a catch?
Blugiallo midnight-blue twill The Signature Cut suit, £511
