• European cash bourses are trimming the Wall Street-induced gains seen at the open; US futures posting modest losses
• NQ lags amid TSLA, -3.7% pre-mkt, CEO reportedly calling for a 10% staff reduction and saying he has a "super bad feeling" re. the economy
• DXY relatively rangebound, but inching higher overall, going into NFP; peers marginally softer, as such
• Debt downbeat with German yields extending further and the curve steeper while US peers are marginally flatter
• Crude is off best after APAC consolidation while spot gold is softer but remains contained overall
• Looking ahead, highlights include US Final PMIs, US Labour Market Report, ISM Services PMI, Speech from Fed's Brainard, Holidays in China & the UK

As of 11:15BST/06:15ET

LOOKING AHEAD

• US Final PMIs, US Labour Market Report, ISM Services PMI, Speech from Fed's Brainard, Holidays in China & UK.
• Click here for the Week Ahead preview

GEOPOLITICS

RUSSIA-UKRAINE

• Ukrainian President Zelensky said the military situation in Donbas had not changed in the past 24 hours and said they had some success in Severodonetsk, according to Reuters.
• US Commerce Department added 71 Russian and Belarus entities to the economic blacklist including aircraft plants, shipbuilding and radio technologies, according to Reuters.
• Ukraine Defence Minister says it would be a good idea for NATO to discuss de facto vs de jure membership of NATO for Ukraine; says this could be part of the upcoming NATO summit
• Belarusian President Lukashenko says Belarus is ready to negotiate potential transit of Ukraine's grain via Belarus, according to Tass citing local Media.
• Russia's Kremlin says the topic of Ukrainian grain will be high on the agenda when the Russian Foreign Minister visits Turkey; adds certain results have been achieved in the 100 days of the operation in Ukraine.

EUROPEAN TRADE

CENTRAL BANKS

• BoJ Governor Kuroda says frequent price increases in goods could hurt households and this must be watched closely; BoJ must maintain easy policy to create an economic environment where wages can rise further.

EQUITIES

• European cash bourses are trimming the Wall Street-induced gains seen at the open (Euro Stoxx 50 +0.2%; Stoxx 600 +0.2%) – with volumes also low as British and Chinese traders observe domestic holidays.
• European sectors are mostly higher with the breadth of the market narrow.
• US equity futures post modest losses across the contracts, with the NQ (-0.7%) straddling behind peers, ES -0.4%
• The modest downside coincided with Reuters reports that Tesla (-3.7% pre-market) CEO Musk, via an email, said they need to make roughly a 10% staff reduction and he has a "super bad feeling about the economy”.
• Click here for more detail.

FX

• Greenback cagey and rangy pre-NFP with DXY holding between 102.000-101.500.
• Euro eyes more decent option expiry interest around 1.0750 - 1.1bln rolling off between 1.0755-45 to be precise.
• Yen relying on Fib retracement (130.17) for support as Treasury yields remain firm and risk sentiment buoyed, USD/JPY towards upper end of 130.08-129.69 range.
• Sterling somewhat sidelined as UK gears up for Jubilee Day festivities, Cable contained within 1.2589-69 confines, EUR/GBP tight around 0.8550.
• Lira extends losses as acceleration in Turkish PPI outweighs sub-forecast, but still firmer CPI, USD/TRY tops 16.5100.
• Yuan breaches more technical resistance levels as correction continues, USD/CNH sub-6.6200 at one stage overnight.
• Russian Foreign Ministry does not plan to conduct market forex operations this year as per its early decision to temporarily suspend budget rules, according to Reuters
• Click here for more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.0600-05 (736M), 1.0650 (618M), 1.0700 (800M), 1.0725-30 (505M), 1.0745-55 (1.1BN), 1.0790-00 (750M), 1.0900 (494M)
• USD/CAD: 1.2550 (450M), 1.2590-00 (610M), 1.2630 (1.4BN), 1.2700 (782M)
• Click here for more detail.

FIXED INCOME

• Debt on the defensive after a few dead cat bounces ahead of US jobs data.
• Bunds unable to defend 150.00 or 1.25% in cash, Treasuries more contained and curve flat awaiting NFP amidst a busy pm docket.
• T-note just under par between 118-30/24 parameters.
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COMMODITIES

• WTI and Brent futures have been waning off best levels following the overnight consolidation seen in the aftermath of the OPEC+ confab.
• Gas traders are rushing to secure LNG tankers ahead of winter with ship rates surging as sanctions on Russia reshape global energy flows, according to FT.
• NHC notes of a disturbance producing tropical-storm-force winds; with a new Tropical Storm warning issued for Florida, Cuba, and North-western Bahamas; additional strengthening possible late Saturday and Sunday.
• Norway's Industri Energy Labour Union says 573 members at oil/gas platforms would go on strike on June 12th, if wage negotiations fail; such action would impact nine installations; would not initially impact output, via Reuters.
• Spot gold is steady and comfortably above USD 1,850/oz pre-NFP, whilst base metals futures see the closure of Chinese and UK exchanges amid domestic holidays.
• Click here for more detail.

DATA RECAP

• German Trade Balance, EUR, SA (Apr) 3.5B vs. Exp. 1.6B (Prev. 3.2B, Rev. 1.9B)
• EZ S&P Global Composite Final PMI (May) 54.8 vs. Exp. 54.9 (Prev. 54.9)
• EZ S&P Global Services Final PMI (May) 56.1 vs. Exp. 56.3 (Prev. 56.3)
• EU Retail Sales MM (Apr) -1.3% vs. Exp. 0.3% (Prev. -0.4%, Rev. 0.3%); YY (Apr) 3.9% vs. Exp. 5.4% (Prev. 0.8%, Rev. 1.6%)

NOTABLE US HEADLINES

• White House said they do not expect to see blockbuster job numbers every month, according to Reuters.
• Tesla (TSLA) CEO Musk says they need to make roughly a 10% staff reduction, says he has a "super bad feeling about the economy", via Reuters citing an email; Tesla is to "pause all hiring worldwide". Reuters adds the email from Musk was reportedly sent to executives at Tesla on Thursday.
• US has lobbied the UK to re-consider its deal regarding a semi factory which was purchased by a subsidiary of a Chinese Co., according to WSJ citing sources; adding, the US admin's goal is to align the US and allies on tech competition.
• Click here for the US Early Morning note.

CRYPTO

• Bitcoin is little changed on the session, holding above USD 30k, in-fitting with the broader contained tone as we await the afternoon's US data docket following particularly thin APAC and European sessions owing to China and UK market holidays, respectively.

APAC TRADE

EQUITIES

• APAC stocks took impetus from the gains in the US but with advances capped in holiday-thinned conditions.
• ASX 200 was led higher by tech with the sector inspired following the outperformance of the Nasdaq stateside and with mining-related stocks underpinned by the recent gains across commodity prices.
• Nikkei 225 benefitted from recent currency weakness and with index heavyweight Fast Retailing among the biggest gainers after a double-digit percentage jump in its same-store sales.
• KOSPI is firmer but lagged behind regional counterparts after CPI data climbed to its highest in nearly 14 years and added to the pressure for the BoK to continue with its hiking cycle.

NOTABLE APAC HEADLINES

• Deputy USTR Bianchi said all options are on the table regarding tariff decisions on Chinese imports and that the USTR is seeking strategic realignment with China and a tariff structure that makes sense, while she added the USTR is to focus the China trade relationship on US concerns about Chinese non-market practices and economic coercion, according to Reuters.
• South Korean Finance Ministry said they are taking the inflation situation very seriously, while the BoK noted that demand-side inflation pressure is likely to build and that inflation is to be above 5% in June and July, according to Reuters.

NOTABLE APAC DATA

• South Korean CPI MM (May) 0.7% vs. Exp. 0.4% (Prev. 0.7%); YY (May) 5.4% vs. Exp. 5.1% (Prev. 4.8%)