• European bourses are firmer, Euro Stoxx 50 +0.9%, drawing impetus from APAC strength into month-end with catalysts thin thus far.
• Stateside, futures are supported with familiar themes in play pre-PCE Price Index for insight into the 'peak' inflation narrative; ES +0.4%.
• USD was initially pressured to a fresh WTD low but has seen a concerted bounce at the modest expense of the EUR
• Core debt has struggled to find a firm direction but has erred back to initial highs with the US yield curve mixed/flat pre-price data
• Crude is underpinned, but off highs, amid broader sentiment while spot gold retains APAC upside after breaching the 21-DMA at USD 1850.80/oz
• Looking ahead, highlights include US PCE Price Index, Personal Income & Consumption and ECB's Lane.

As of 11:10BST/06:10ET

LOOKING AHEAD

• US PCE Price Index, Personal Income & Consumption, Speech from ECB's Lane.
• Click here for the Week Ahead preview

GEOPOLITICS

RUSSIA-UKRAINE

• White House said there are no talks about relaxing sanctions on Russia for grain exports, according to Reuters.
• Most recently, Russian Defense Ministry announces the opening of safe passages to the Black Sea from today, according to Sky News Arabia.
• Secretary of the Iranian National Security Counci says there is a need for strategic cooperation between Tehran and Moscow to confront Washington's unilateral policies, via Al Jazeera.
• Ukraine President Zelensky says Russia does not want any real peace discussions, all they want to do is deliver ultimatums; subsequently, Russia's Kremlin says Ukraine makes contradictory statements, it is not clear what Ukraine wants, via Reuters.
• UK PM Johnson says that Ukraine should receive advanced multi-launch rockets.
• Naftogaz has launched a pre-arbitration procedure due to Gazprom underpayments under the gas transit contract, via Ifx.

OTHER

• China and Russia vetoed the US push to impose more UN sanctions on North Korea, according to Reuters.
• Saudi Foreign Ministry official said there is no meeting between Saudi and Iranian Foreign Ministers scheduled for the foreseeable future, while the official added that Iran needs to build trust for future cooperation and there are issues that can be discussed to de-escalate tensions, according to Reuters.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer, Euro Stoxx 50 +0.9%, drawing impetus from APAC strength into month-end with catalysts thin thus far.
• Stateside, futures are supported across the board with familiar themes in play pre-PCE Price Index for insight into the 'peak' inflation narrative; ES +0.3%.
• Note, the FTSE 100 Unch. is the mornings underperformer amid pressure in energy names after Chancellor Sunak's windfall tax announcement on Thursday.
• DiDi (DIDI) has reportedly drawn interest from FAW Group, regarding a stake purchase, according to Bloomberg. +7.5% in the pre-market
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FX

• Greenback grinds higher ahead of PCE inflation metrics with month end rebalancing flows providing impetus, DXY bounces from fresh WTD base just under 101.500 to 101.800.
• Kiwi and Aussie propped by bounce in commodities and Loonie protected by further gains in crude; NZD/USD tests Fib retracement at 0.7129, AUD/USD eyes 0.7150 and USD/CAD probes 1.2750.
• Big option expiries in the mix and potentially supportive for the Dollar into long US holiday weekend, +1bln rolling off at NY cut not far from spot in EUR/USD, USD/JPY, AUD/USD and USD/CAD.
• Rand firmer as Gold touches Usd 1860/oz after 200 DMA breach, USD/ZAR below 15.7000.
• Click here for more detail.

Noted FX Expiries, NY Cut:

• EUR/USD: 1.0565-75 (1.49BN), 1.0585 (397M), 1.0625-35 (2.45BN), 1.0650-60 (3.58BN), 1.0670-80 (974M), 1.0690-1.0700 (1.69BN), 1.0750-55 (742M), 1.0760-65 (1.17BN), 1.0775-80 (827M), 1.0800 (450M)
• USD/JPY: 125.50 (430M), 125.70-75 (560M), 126.00 (451M), 126.50 (431M), 126.98-05 (1.46BN), 127.05-10 (506M), 127.70-75 (1.44BN)
• GBP/USD: 1.2685 (202M)
• EUR/GBP 0.8450-60, (710M), 0.8500-05 (280M)
• AUD/USD: 0.6950-60 (543M), 0.7075 (369M), 0.7125-30 (508M), 0.7145-55 (632M), 0.7165-70 (1.05BN), 0.7200 (513M)
• USD/CAD: 1.2700-10 (658M), 1.2750-60 (1.17BN), 1.2770 (250M), 1.2835-40(520M)

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FIXED INCOME

• Debt futures on a firmer footing ahead of US PCE price metrics, but some way below weekly peaks.
• Bunds sub-154.00, Gilts under 119.00 and 10 year T-note below 121-00.
• Curves a tad flatter following hot reception for 7 year US issuance.
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COMMODITIES

• Crude benchmarks are underpinned, but off best levels, by broader sentiment and initial USD weakness going into a long US weekend with Memorial Day touted as the driving seasons commencement.
• WTI July and Brent August, at best, were in proximity to USD 115/bbl vs troughs of USD 113.61/bbl and USD 113.77/bbl respectively.
• US Treasury is reportedly expected to renew Chevron’s (CVX) license to operate in Venezuela as soon as Friday, according to Reuters citing sources.
• China's State Planner has approved a coal mine in the Shanxi area to bolster annual output to 12mln tonnes per annum from 8mln; investment of CNY 5.35bln, via Reuters.
• Spot gold is steady and holding onto the bulk of overnight upside after breaching the 21-DMA at USD 1850.80/oz; USD 1860.19/oz peak, thus far.
• Click here for more detail.

NOTABLE US HEADLINES

• Click here for the US Early Morning note.

CRYPTO

• Attempted consolidation after yesterday's noted pressure, though Bitcoin remains negative on the session and below USD 29k.

APAC TRADE

EQUITIES

• APAC stocks took impetus from the risk-on mood on Wall St where all major indices were lifted amid month-end flows and encouraging retailer earnings.
• ASX 200 was led higher by outperformance in the commodity and resources industries, while consumer stocks were mixed after Retail Sales printed in line with expectations, albeit at a slowdown from the prior month.
• Nikkei 225 traded positively but with upside capped by a mixed currency and weakness in energy and power names after increases in international prices and with the government looking to address the tight energy market.
• Hang Seng and Shanghai Comp were firmer with notable outperformance in Hong Kong amid a euphoric tech sector after earnings from Alibaba and Baidu topped estimates which also inspired the NASDAQ Golden Dragon China Index during the prior US session, while advances in the mainland were moderated by the contraction in April Industrial Profits and after Premier Li’s unpublished comments from Wednesday’s emergency meeting came to light in which he warned of dire consequences for the economy.

NOTABLE APAC HEADLINES

• China’s State Council will seek specific implementation rules by May 31st regarding necessary measures at all levels of government and will dispatch inspection teams to all 31 provinces, municipalities and autonomous regions to oversee the rollout amid an urgent need for national economic mobilisation, according to SGH Macro Advisors.
• US is seeking to hold economic discussions with Taiwan in the latest test with China, while supply chains and agriculture are said to be among the topics, according to Bloomberg. Furthermore, reports noted that bilateral economic talks will be announced in the upcoming weeks.
• Evergrande (3333 HK) is reportedly considering repaying offshore bondholders in instalments, according to Reuters sources; discussing giving the option of converting part of debt into equity of property management and EV units.
• China's Health Official says some areas along the Jilin border report local infections without a clear source, close attention should be paid to the risk of importing the virus; COVID infections show a trend of gradual spread from border to inland areas, via Reuters.

NOTABLE APAC DATA

• Chinese Industrial Profits YY (Apr) -8.5% (12.2%); YTD YY (Apr) 3.5% (8.5%)
• Tokyo CPI YY (May) 2.4% vs. Exp. 2.5% (Prev. 2.5%); Ex. Fresh Food YY (May) 1.9% vs. Exp. 2.0% (Prev. 1.9%)
• Tokyo CPI Ex. Fresh Food & Energy YY (May) 0.9% vs. Exp. 0.9% (Prev. 0.9%)