5 things to start your day

[Bloomberg]( Trump bangs the tariff drum again, debt limit talks, and Wall Street earnings roll in. Tariff reminder President Donald Trump reiterated that he could add more tariffs to Chinese imports [if he wants](. His comments hit [stocks in the U.S. yesterday](, a sentiment that continued into [Asia trading](. China responded by saying further levies would complicate negotiations which are just starting to [get back on track](. Speaking of trade spats, the [increasing tension between Japan and South Korea]( shows no sign of easing ahead of a deadline for [agreement on tech exports](. This again The perennial problem that is the U.S. debt limit is [oozing its way back onto the agenda](. Treasury Secretary Steven Mnuchin said that under one of the Treasury Department’s scenarios, the country will be at risk of defaulting on payment obligations in [early September](. With Congress due to start its recess on July 26 and not return until mid-September, there is some pressure to [agree a way forward]( in the coming weeks. Mnuchin is in Paris for a meeting of G-7 finance chiefs where the French are busy pushing for agreement [on a digital tax]( on tech giant profits. Earnings The story of the second-quarter for America’s biggest banks so far has been... [Meh](. It’s Bank of America’s turn under the spotlight this morning, with analysts forecasting that the lender’s wealth management business may prove a bright spot. Away from Wall Street, Netflix Inc. reports after the bell with expectations low after the company hiked prices. EBay Inc. also announces earnings today. Marketzzzzzzzz Overnight the MSCI Asia Pacific Index slipped 0.2% while Japan’s Topix index closed 0.1% lower on continuing trade worries. In Europe, the Stoxx 600 Index was 0.1% higher at 5:45 a.m. as not very much continued to happen. S&P 500 futures reflected the same mood as they [pointed vaguely higher](, the 10-year Treasury yield was at 2.101% and gold was holding at about $1,400 an ounce. Coming up… Those looking for excitement later may be in for a disappointment as the slate is fairly bare, with only June housing starts and building permits data at 8:30 a.m. and the Fed’s Beige Book at 2:00 p.m. The one place there may be some action is in the oil market which had [something of a selloff]( yesterday in the wake of hints of a possible start to talks between Iran and the U.S. Today’s inventories data, due at 10:30 a.m. may [give crude some support](. What we've been reading This is what's caught our eye over the last 24 hours. - Europe [dived into negative rates]( and now can’t find a way out. - [House condemns]( racist Trump tweets on four freshman members. - Elon Musk is into [making cyborgs]( now. - Libra’s biggest challenge may be Facebook’s [tarnished reputation](. - Hong Kong’s economy starts to [feel the hit]( from protest chaos. - Feeding 10 billion people will require [genetically modified food](. - The 5G health hazard [that isn’t](. And finally, here’s what Luke's interested in this morning Stateside, we’ve entered the dog days of summer, with the last three sessions seeing the lowest total dollar volume traded in the popular SPY ETF since November 2017. Realized volatility in stocks looks to be on par with that super-placid year, to boot. Add it up, and it’s been a great time for selling volatility in U.S. stocks, with a gauge of the strategy’s monthly profit and loss statement developed by Macro Risk Advisors surging to, and sustaining, a high level throughout July. But the nature of the short-vol trade in U.S. stocks will undergo plastic surgery this morning when the VIX futures contracts roll – July rides off into the sunset, while August becomes the front-month contract. What this means is that a once-steep futures board – which is both a direct tailwind for selling vol through exchange-traded products and more generally reflects a market that’s better equipped to handle bouts of stress without flashing panic signals – is poised to become much less so. And yet, IPS Strategic Capital head trader Patrick Hennessy notes the flip side of this coin already has volatility sellers salivating. “So August VIX is coming into the front month 2.5 points over spot with VIX ETPs long over 200k Aug futures…every single VIX trading model is gonna be short this thing (and open interest in Aug seems to be confirming that,” [he tweets](. Shorting vol is about to become much more of a direct bet on continued market tranquility dragging down the front month to converge with spot – which will be active for the Federal Reserve meeting – and much less about support emanating from the shape of the futures curve. Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. 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