• European bourses are firmer while US futures are more contained and sub yesterday's record levels after a subdued APAC handover; Euro Stoxx 50 +0.4%, ES U/C
• Crude remains pressured pre-OPEC with the JTC commencing from 12:00BST/07:00EDT today; though, benchmarks have recovered off lows which saw WTI test USD 72.00/bbl
• USD is supported in-spite of some rebalancing signals to the detriment of peers particularly high beta/crude sensitive FX
• US Senate Minority Leader McConnell is trying to slow momentum for bipartisan infrastructure deal, Axios
• Looking ahead, highlights include national German CPI (Prelim.), US Consumer Confidence, ECB's Lagarde, Fed's Barkin

CORONAVIRUS UPDATE

Australia's Queensland State Premier imposed a three-day COVID lockdown including the state capital of Brisbane, and Australia Premier McGowan announced that Perth and Peel will enter a 4-day lockdown. It was also reported that New Zealand lowered its COVID alert level in the capital city of Wellington and will move to alert level 1 from midnight on Tuesday, while the country will resume quarantine-free travel to some parts of Australia. (Newswires)

Sputnik V COVID-19 vaccine has demonstrated 97.8% efficacy against COVID-19 cases and 100% efficacy in preventing severe cases within the UAE. (Newswires)

ASIA

Asian equity markets traded subdued with the regional bourses mostly lower after the mixed performance on Wall Street where cyclicals/value were pressured but tech outperformed amid a decline in yields to lift both the S&P 500 and Nasdaq to fresh all-time highs, although US index futures have since eased off their record levels during overnight trade. ASX 200 (-0.8%) was pressured as strength in tech was nullified by weakness in the commodity-related sectors and with risk appetite also subdued after further lockdown announcements concerning Queensland and its state capital of Brisbane, as well as Perth and Peel in Western Australia. Nikkei 225 (-0.8%) declined as exporters suffered from detrimental currency inflows, while the data from Japan has been mixed with better-than-expected Retail Sales data offset by a worse-than-feared increase in the Unemployment Rate. Hang Seng (-0.9%) and Shanghai Comp. (-0.9%) also conformed to the negative tone with the decline in Hong Kong led by China’s oil majors after the recent slump in crude prices and amid ongoing frictions with US where President Biden is said to work with Congress on the China competition bill. Finally, 10yr JGBs were higher following the recent bull flattening in the US but with gains only marginal for the Japanese benchmark amid mixed results at the latest 2yr JGB auction.

PBoC injected CNY 30bln via 7-day reverse repos with the rate at 2.20% for a CNY 20bln net injection. (Newswires) PBoC set USD/CNY mid-point at 6.4567 vs exp. 6.4586 (prev. 6.4578)

China's Global Times opinion piece noted that the US is clamouring against Beijing on almost all multilateral occasions with G20 likely no exception, while it added the US may create small circles in a bid to offset positive functions of G20 which is a hidden danger G20 faces. (Twitter)

BoJ has lowered JGB purchase frequencies across three tranches in July. (BoJ)

• Plans to purchase JPY 450bln of 1-3yr JGBs 4 times per month in Q3 (vs. JPY 475bln 4 times in June)
• Plans to purchase JPY 425bln of 5-10yr JGBs 4 times per month in Q3 (vs. JPY 450bln 4 times in June)
• Plans to purchase JPY 150bln of 10-25yr JGBs 1 time per month in Q3 (vs. JPY 200bln 1 time in June)

• Japanese Retail Sales MM (May) -0.4 % vs. Exp. -0.7% (Prev. -4.5%)
• Japanese Retail Sales YY (May) 8.2% vs. Exp. 7.9% (Prev. 12.0%, Rev. 11.9%)
• Japanese Unemployment Rate (May) 3.0% vs. Exp. 2.9% (Prev. 2.8%)

US

US Senate Minority Leader McConnell is trying to slow momentum for bipartisan infrastructure deal. (Axios)

UK/EU

EU is readying to offer UK concessions over Northern Ireland Brexit deal, while there were separate reports that Jersey extended the transition period for fishing rights for French boats from June 30th for another three months. (The Times/Sky News)

EU Consumer Confidence Final (Jun) -3.3 vs. Exp. -3.3 (Prev. -3.3)

• Economic Sentiment (Jun) 117.9 vs. Exp. 116.5 (Prev. 114.5)
• Services Sentiment (Jun) 17.9 vs. Exp. 14.8 (Prev. 11.3)
• Industrial Sentiment (Jun) 12.7 vs. Exp. 12.3 (Prev. 11.5)

German state CPIs have thus far printed below the prior reading for June and as such are in-fitting with expectations for the regional headline prelim. figure of 2.3% vs prev. 2.5% YY and 0.4% vs prev. 0.5% MM.

GEOPOLITICAL

US President Biden said Iran will never get a nuclear weapon on his watch and Israeli President Rivlin later stated that he is "very satisfied" with US President Biden's pledge to ensure that Iran does not get nuclear weapons. Elsewhere, an Iranian government spokesman says the nation has not made a decision on extending the IAEA agreement; will review all options (Newswires)

US Secretary of State Blinken has asked Russia to stop conducting cyber attacks, saying if these and intrusions into politics continue then they will respond, according to a paper; additionally, said China is complicated in regards to relations and suggested the US is not asking anyone to choose sides. (Newswires)

US forces returned fire with artillery after being attacked by multiple rockets in Syria. (Newswires/Fox News)

China's Foreign Ministry says it deplores the commentary from Japan on Taiwan and has launched solemn representations. (Newswires)

EQUITIES

Bourses in Europe have adopted more of an upside bias (Euro Stoxx 50 +0.5%) following a relatively mixed cash open – which did coincide with a bout of upside volatility across European equity futures at the time. US equity futures meanwhile are contained with a mild downside bias, with the NQ (-0.2%) narrowly lagging its ES (Unch), RTY (Unch), and YM (+0.2%) counterparts following the recent tech outperformance and as yields clamber off recent lows. Back to Europe, it has been a quiet morning thus far in terms of news flow and commentary with a light calendar ahead for the day. Sectors are mostly in the green with defensives lagging and cyclicals outpacing. Chemicals, Autos & Parts, Oil & Gas, and Banks lead the gains, with the latter potentially experiencing a tailwind from US banks resuming and upping dividends after passing the Fed’s stress tests last week. The Basic Resources sector resides as one of the laggards amid losses in the base metals complex. In terms of individual movers, Rexel (+4.5%) tops the Stoxx 600 table amid upgraded guidance. Tui (-4.3%) resides at the other end of the spectrum after a convertible bond announcement. While IWG (Unch) pared gains of over 7% after CC Capital Partners refuted pre-market reports that it is mulling a takeover offer for the group.

Following last week's bank stress tests, JPMorgan (JPM) is to boost its quarterly dividend to USD 1.00/shr from USD 0.90/shr and will continue buybacks. Morgan Stanley (MS) will boost its quarterly dividend by 100% to USD 0.70/shr and announced a share repurchase authorization of as much as USD 12bln over 12 months. Goldman Sachs (GS) plans to raise its dividend to USD 2.00/shr from USD 1.25/shr. Citi (C) will continue with its planned capital actions including common dividends of at least USD 0.51/shr and will continue share repurchases. Wells Fargo (WFC) anticipates increasing its Q3-2021 dividend to USD 0.20/shr (prev. USD 0.10/shr) and to repurchase USD 18bln between Q3-2021 and Q2-2022; expects SCB at 3.1%. (Newswires)

TP ICAP (TCAP LN) is reportedly to launch a cryptocurrency trading platform with Fidelity Investment and Standard Chartered's (STAN LN) digital assets custody unit, to launch H2-2021. (Newswires)

FX

DXY - The Buck is broadly firmer vs all major and most EM counterparts, with the index forming a more solid base around 92.000 and looking in a better position to retest recent highs even though rebalancing models are flashing red for Wednesday. It may well be that many have already completed the bulk of their business for month, quarter and half year end given that spot in the currency markets was yesterday, though one can never rule out final position tweaking that at least one bank believes could occur over the NY close today or tomorrow. Nevertheless, the Greenback is grinding higher in the meantime and taking advantage of weakness in other currencies for specific fundamental and technical reasons, as the DXY hovers towards the upper end of a 90.078-91.852 band. Ahead, US consumer confidence is probably the headline macro release following a speech from Fed’s Barkin.

NZD/AUD/CAD - Ongoing COVID-19 concerns and weakness in commodities that is now spilling over to crude, continue to weigh heavily and primarily on the high betas, with the Kiwi getting no respite from the latest RBNZ Statement of Intent overnight that underlined the Bank’s policy mandate and reaffirmed the commitment to provide monetary assistance as needed for the economic recovery. Indeed, Nzd/Usd is now dipping under 0.7000 and Aud/Nzd is eyeing 1.0770 even though the Aussie is also retreating further vs its US peer around a 0.7550 pivot. Elsewhere, the Loonie is currently nearer 1.2400 than 1.2300 having failed to arrest a reversal and contain declines through 1.2350 on Monday.

EUR/CHF/GBP - Also on the back foot and coming under a bit more intense pressure against the Dollar, but the Euro just about holding on to the 1.1900 handle with assistance from Eur/Gbp tailwinds as the cross peers over 0.8600 again. Perhaps the Euro is also gleaning some traction from better than expected Eurozone sentiment indicators rather softer German state inflation data, though Eur/Chf is contained either side of 1.0960 as the Franc straddles 0.9200 vs the Buck. Conversely, the Pound is lagging below 1.3850 in Cable terms irrespective of an acceleration in Nationwide UK house prices and stronger than forecast BoE consumer credit, mortgage lending and approvals.

JPY - The Yen is fending well relative to G10 rivals against the backdrop of a bouncing Greenback, but remains relatively rangebound after keeping its head afloat of 111.00 and briefly probing half round number resistance at 110.50. For the record, Japanese retail sales beat consensus, but the jobless rate ticked up more than anticipated to offer little clear direction, while today’s big option expiries look too far from the money to influence Usd/Jpy.

SCANDI/EM - Somewhat conflicting Swedish sentiment readings may have put the spotlight on trade and a significantly wider surplus as the Sek outpaces the Nok that is recoiling with oil. However, the Try is not deriving additional comfort from the pull-back in crude prices or an improvement in Turkish economic confidence, and the Zar is still feeling the adverse effects of SA’s worsening pandemic situation and Gold testing Fib support sub-Usd 1770/oz.

FIXED

Bulls and bears have been tussling for position amidst erratic price action and moves on the eve of month, quarter and half year end that has culminated in, or currently leaves debt futures rather indecisive and narrowly mixed after small extensions of intraday parameters, but no clear or confirmed breaks. Bunds are back up near the top of their 172.33-10 Eurex range vs 172.26 at yesterday’s close, Gilts are around 128.00 within a 128.04-127.74 Liffe band vs 127.96 at settlement on Monday and US Treasuries are hugging the unchanged line with the curve essentially flat ahead of US housing data, consumer confidence and Fed’s Barkin.

Next Generation EU issuance books opened at MS -8bp for the 5yr and MS +25bp for the 30yr, pricing due today. Size is no-grow at EUR 15bln. (Newswires)

COMMODITIES

WTI and Brent front-month futures are choppy after recently coming under some pressure (before trimming those losses) despite a distinct lack of news flow but heading into a turbulent week for the complex, with the Iranian nuclear situation brewing in the background (with no developments), whilst OPEC+ ministers are poised to assign production quotas at least for August. Sources suggested the group is mulling a further easing of curbs, although the specifics have not yet been ironed out – with analyst forecasts ranging from 100k BPD to 1mln BPD of oil returning to the market in August. ANZ, ING, and S&P Global Platts all expect August quotas to increase by 500k BPD, whilst RBC Capital Markets forecasts OPEC+ to boost output by 500k-1mln BPD at the July 1st meeting. On the other end of the forecast range, Rystad Energy calls on OPEC+ to take a more cautious approach and opt for a production increase of 100-200k BPD in August – citing a jagged path of recovery and fragile demand (full primer available on the Newsquawk headline feed). Note, the JTC meeting will start at 12:00BST/07:00EDT in which the technical committee will review supply/demand data. At the time of writing, WTI Aug and Brent Sep reside around USD 72.50/bbl (72-73/bbl range) and 74.00/bbl (73.40-74.20 range) marks respectively. Over to metals, spot gold and silver have declined in tandem with an uptick in the Buck, whilst some technical factors may have exacerbated losses – i.e. spot gold dipping under USD 1,775/oz and spot silver losing USD 26/oz-status. The precious metals complex remains on standby for macro developments whilst month-end factors are also to be eyed as June and Q2 draw to a close. Base metals have seen a leg lower in recent trade with 3M LME copper flirting with USD 9,250/t (vs high 9,392/t) at the time of writing – with some continuing to cite China’s crackdown in the complex – also reflected in the losses across Dalian iron ore and coke futures overnight. Finally, Citi has upgraded its 0-3M Nickel forecast to USD 20.5k/t vs prev. USD 18k/

OPEC JTC commences from 12:00BST, Energy Intel's Bakr. (Twitter) Link to newsquawk OPEC+ primer

Russian Kremlin says President Putin has no plans at present for discussion on oil with Saudi Arabia. (Newswires)

Citi has upgraded its zero-three month Nickel forecast to USD 20.5k/T (prev. USD 18k/T). (Newswires)