All eyes on the G-20, banks rally on stress tests, and there's still no inflation. MeetingsThe G-20 meetings have begun in Japan, and President Donald Trump has already met several world leaders including Russia's Vladimir Putin whom he jokingly warned not to meddle in the upcoming U.S. election. The main event is tomorrow when Trump meets with Chinese leader Xi Jinping as hopes remain high that trade talks can get restarted. China's top trade negotiator Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer met today in a sign that the two sides are looking to make progress. Stress boostAll 18 banks – including Deutsche Bank AG which repeatedly failed past exams – passed the Federal Reserve stress tests, with many of the largest lenders in the U.S. announcing increased payouts to shareholders in the wake of the results. The total from dividends and buybacks will hit $173 billion, a record high amount for the group. Shares in Deutsche Bank gained more than 4% in German trading, while JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc. all showed pre-market rises of around 2%. InflationEuro-area inflation remained unchanged at 1.2% in June according to this morning's flash estimate from Eurostat. At 8:30 a.m. Eastern Time, the Federal Reserve's preferred inflation gauge – the PCE deflator – is expected to come in unchanged at 1.5%. With both the Fed and the ECB already firmly on the path to more easing, continuing low inflation will only further bolster calls for rate cuts sooner rather than later. Markets waitOvernight the MSCI Asia Pacific Index slipped 0.1% while Japan's Topix index closed 0.1% lower as investors remained cautious ahead of the Trump-Xi meeting. In Europe, the Stoxx 600 Index was 0.2% higher at 5:45 a.m. S&P 500 futures were pointing to a gain at the open, the 10-year Treasury yield was at 2.021% and gold was higher. A good month for commodities Oil remains on track for its best month since January as crude gets a boost from Iran tensions and falling U.S. stockpiles. That rally may get tested next week as OPEC and its allies meet on Monday to agree on an extension to production cuts. Also putting in a stellar performance this month is gold, which is set for its biggest monthly gain since 2016. Analysts are pointing to $1,430 an ounce as the next level gold will have to breach for the rally to be sustained. What we've been readingThis is what's caught our eye over the last 24 hours. And finally, here's what Luke's interested in this morningThere's a raging debate in credit about whether investors can't afford to be forward-looking or can't afford to be missing out. JPMorgan Chase & Co.'s Bob Michele has warned that the rising probability of recession, as evidenced by the prolonged inversion of the 3-month, 10-year Treasury curve, could see default rates rise from below 2%, to 8%. He said he's selling rallies for the first time since the financial crisis. Credit investors haven't got the luxury of waiting for economic data to roll over before demanding more attractive investment terms, Citigroup Inc.'s Daniel Sorid warns. "To avoid black eyes, credit investors must consider both the likelihood and severity of near-term economic shocks as well as the degree of vulnerability among issuers, and price this well in advance," he wrote. There's some embedded reflexivity here, which also cuts the other way: if credit markets can remain sufficiently tight, perhaps recession risks can be mitigated. And that may well be the ultimate goal of Fed policy, according to Sorid.  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. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more. | 
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