• Asia-Pac bourses saw a mixed and contained session; US equity futures traded with a mild upside bias overnight
• FX was quiet, DXY remained caged under 92.000, EUR/USD and GBP/USD traded sideways whilst USD/JPY printed a fresh YTD high at 111.11
• China's Banking and Insurance Regulator official expects China's monthly PPI to reach 10%, adding pressure to consumption
• A bipartisan group of US senators has reached an accord on a framework for an infrastructure bill; some remain cautious
• US negotiators are reportedly gearing up for a resumption in Iranian nuclear talks, which could resume next week
• Looking ahead, highlights include German Ifo, US Initial/Continued Jobless Claims, GDP (Final, Q1), Durable Goods and New Zealand Trade Balance, BoE Rate Decision, Fed's Williams, Barkin, Bostic, Bullard, Harker, Kaplan; ECB's Schnabel, Panetta, and supply from the US

CORONAVIRUS UPDATE

US CDC said there is no sufficient data to recommend booster COVID-19 vaccine doses currently but the agency will continue to closely monitor the need for boosters. US CDC work group stated that benefits of COVID mRNA vaccines use in teens and young adults outweigh the risks. (Newswires)

EU Envoy said "we very much hope and expect" the US to ease travel restrictions on Europeans very soon. (Newswires)

Australia's New South Wales reports 18 new COVID cases, according to the health department. (Newswires) Yesterday, it was reported that Australia's New South Wales is urgently investigating four mystery COVID cases overnight and the premier has outlined new restrictions of hotspots including in Sydney

ASIA

Asia-Pac bourses saw a mixed and contained session following a lacklustre performance on Wall Street, where the S&P 500 and DJIA closed with modest losses whilst the Nasdaq Composite squeezed out another record close, but off its intraday best of 14,317 for the cash, and 14,315.75 for the NQ. US equity futures overnight traded with a mild upside bias but still within yesterday’s ranges, with broad-based marginal gains seen across the ES (+0.2%), NQ (+0.3%), YM (+0.3%), and RTY (+0.4%). Back to APAC, the ASX 200 (-0.1%) failed to benefit from the strong performance in its tech and mining names, whilst the Nikkei 225 (Unch) remained supported by softness in its currency, but the index is yet to convincingly breach 29k to the upside. The KOSPI (+0.4%) eked mild gains as a rise in June consumer confidence provided some positive omens. Hang Seng (+0.1%) and Shanghai Comp (-0.2%) traded within recent ranges as the region shrugged off the first increase in the PBoC's liquidity injection since March, albeit modest. In terms of stocks-specifics, Hoshine Silicon Industry shares slumped some 10% after Washington reportedly issued an order that blocks imports of solar panel materials from the Co. Finally, of note for the broader global chip sector, chip-giant TSMC flagged price hikes of 10-20% beginning next year, according to Chinese media. Finally, JGB futures meanwhile trade flat and in tandem with its US and German counterparts.

China's Banking and Insurance Regulator official expects China's monthly PPI to reach 10%, adding pressure to consumption. (Newswires)

TSMC (2330 TT) is reportedly hiking prices by 10-20% from next year, according to Economic Daily. Co. plans to raise 8-inch and 12-inch wafers by 10% to 20% next year due to strong demand. (Newswires)

BoK Governor Lee said that an earlier normalisation of policy should begin this year. (Newswires)

As China continues to crack down on Bitcoin it may drive miners out of the country and towards Texas, due to cheap electricity and a more welcoming environment, according to Nikkei. (Nikkei)

• PBoC set USD/CNY mid-point at 6.4821 vs exp. 6.4805 (prev. 6.4621); the weakest CNY fix since May 6th
• PBoC injected CNY 30bln via 7-day reverse repos for a net injection of CNY 20bln; rate maintained at 2.20%; the injection increase since March.

UK/EU

The UK government is due to deliver its latest travel advice later today. (Sky News)

FX

FX markets were also uneventful in APAC hours, with the DXY contained within a tight range sub-92.00 ahead of another raft of Fed speakers, and major peers largely dictated by the Buck. The Dollar did not react to reports that a deal on the infrastructure framework has reached among a bipartisan group of US senators - with a meeting between the White House and the bipartisan group slated for Thursday (time TBC) - although some have cautioned that there are still details to be worked out. EUR/USD and GBP/USD traded flat above 1.1900 and 1.3950 respectively after the latter found overnight support at its 100 DMA around the half-round figure and heading into the BoE's policy announcement (full preview available in the Newsquawk Research Suite). USD/JPY printed on either side of 111.00 after notching an incremental fresh YTD high at 111.11. Antipodeans also traded sideways with AUD/USD still above its 200 DMA at 0.7559, whilst NZD/USD encountered some overnight resistance at 0.7050. The CNY was stable under 6.5000 whilst the PBoC opted for another softer CNY fix. Finally, the KRW was unfazed by BoK Governor Lee announcing a sooner normalisation of policy this year.

COMMODITIES

WTI and Brent front-month futures traded flat within narrow ranges around the USD 73/bbl and USD 75/bbl marks respectively in what was a quiet APAC session. News flow for the complex has once again been light overnight in the run-up to the OPEC+ meeting next week, whilst reports also suggested that US negotiators are readying for the resumption of Iranian nuclear-deal discussions over the coming week - which together, could set the stage for a hectic week for the energy market. Elsewhere, spot gold and silver were lacklustre with former testing and later dipping below support at USD 1,775/oz throughout the night. Onto base metals, LME copper started declining as Chinese participants entered the fray, whilst China's Banking and Insurance Regulator official said China's monthly PPI is expected to reach 10% and add pressure to consumption. As a reminder, over the recent weeks, China has been attempting to stem the rise in commodities prices via intervention amid fears that unfavourable price pressures will seep into CPI.

Citi sees Brent crude averaging USD 77/bbl in Q3 2021 and USD 78/bbl in Q4; Citi sees a market deficit even if Iranian sanctions are suddenly lifted. (Newswires)

GEOPOLITICAL

US negotiators are reportedly gearing up for a resumption in Iranian nuclear talks which could resume next week, according to reports. (Newswires)

An Iranian atomic facility has been damaged in an attack, despite Iran claiming otherwise. (Jerusalem Post)

White House says the decision to close Iranian news sites is the US Justice Department's decision and has nothing to do with the nuclear negotiations. (Newswires)

US

Treasuries saw pressure in wake of another round of Bostic comments, who outed himself as a 2022 hiker, and two hikes in 2023, as well as generally sounding more hawkish in tone. T-Notes printed their lows at 132-03+ in wake of the 5yr auction. The USD 61bln auction was lacklustre overall, with a minor 0.2bps tail (vs avg. on the screws), while it was covered 2.36x, in line with the six-auction average. The Primary Dealer community took a smaller takedown than average, although this was due to greater Directs participation, with Indirects (foreign demand proxy) taking less than average. Treasury participants now look to Thursday's 7yr auction, as well as other catalysts such as the BoE and the latest Fed's stress test. T-Note (U1) Futures settled 5+ ticks lower at 132-06

A bipartisan group of US senators has reached an accord on a framework for an infrastructure bill. The group will be meeting with US President Biden on Thursday to discuss this. (Newswires) US Senators said the Senators and the White House officials have signed off on the top lines and the pay-fors on the infrastructure deal, according to CNN's Raju. (Twitter) White House senior staff made progress towards an outline of a possible agreement, according to the White House aide. (Twitter) US Senator Collins (R) said that there are still details of the infrastructure framework to resolve. (Newswires) US Senate Majority Leader Schumer and House Speaker Pelosi are not endorsing the bipartisan bill outright and still want to see all the details, according to Punchbowl. (Twitter)

Fed's Rosengren (2022 voter) said a robust recovery is underway and the economy is getting close to some estimates of full employment and vaccination rates have topped expectations. Rosengren said financial markets are not pricing assets as if they expected inflation at 3%, whilst inflation risks are heightened but elevated prices will be more moderate next year. Rosengren said many sectors of the economy are still suffering, and he expects inflation slightly above 2% next year. Rosengren is also surprised that overall Average Hourly Wages are not higher, and stated that the Fed has to worry about rising house prices and a boom-bust scenario. Rosengren noted that this is an appropriate time to have a lot of fiscal stimulus; due to vaccines the US probably will not need fiscal stimulus for as long as other countries. (Newswires)

Fed's Bostic (2021, 2024 voter) stated that given upward surprises has pulled his first rate hike to late 2022, and he sees two additional 25bps in 2023. Bostic said the Fed is close to meeting the standard for bond-buying tapering and it is completely appropriate to debate taper, which could be in three-to-four months, whilst a few further months of strong job data to open the door to tapering. Bostic sees inflation for 2021 at 3.4% and GDP growth seen at 7% in 2021. He said the economy is well on its way towards recovery and the data is stronger than expected and he does not believe the housing market is a bubble, and prices are increasing on supply and demand. Bostic does not have a strong belief whether to taper MBS before Treasuries and he would prefer to hold off on raising rates until bond taper is complete. (Newswires)

Fed's Kaplan (2023 voter) forecasts the first rate increase in 2022 and sees 2021 PCE inflation at 3.4% then slowing to 2.4% in 2022. (Newswires)

ViacomCBS (VIAC) and Roku (ROKU) are potential deal targets for Comcast (CMCSA), although Comcast CEO doesn't feel the need to seek a merger, according to WSJ sources. (WSJ)

US house judiciary panel voted to approve the bill to increase filing fees for