com EU Mid-Market Update: Soft UK growth, hawkish ECB & an incoming UK Defence Plan that is expected to be short of funding; Focus on USD/JPY move

**Notes/Observations** - Month-end data flow was broadly constructive for the eurozone but added to the ECB's policy dilemma. French preliminary June CPI surprised to the downside at 1.8% y/y (vs 2.0%e), bringing headline inflation back to target for the first time in three months, while French consumer spending (+0.5% m/m) beat. German May retail sales jumped 1.1% m/m (vs flat expected), unemployment unexpectedly fell (-1.0k vs +5.0k expected), and the early North Rhine-Westphalia CPI print eased to 2.1% y/y ahead of the national figure. The main inflation watch-out came from German import prices, up 6.8% y/y - the strongest annual rise since December 2022. Elsewhere, Italian PPI cooled sharply, Swiss KOF beat (101.2 vs 99.0e), and Finland's GDP indicator firmed - On the ECB itself, the messaging skewed hawkish. Lagarde opened the Sintra forum arguing Europe is now more resilient to shocks, characterizing June's quarter-point move as a deliberate, unanimous decision rather than an...