Newsquawk

Euro Market Open: Subdued tone reverberated into APAC trade, US CPI ahead

10 Jun 2022, 06:50 by Newsquawk Desk

APAC stocks were mostly negative after the glum mood rolled over from global counterparts (S&P 500 -2.4%)
European equity futures are indicative of a lower open with Eurostoxx 50 -0.9% after the cash market closed with losses of 1.7% yesterday
DXY is softer but maintains 103 status, EUR/USD remains on a 1.06 handle, JPY leads G10 FX
Crude futures declined amid COVID woes and with pressure seen as Chinese commodities came online
Looking ahead, highlights include US CPI, Canadian Jobs Report, US University of Michigan (Prelim.), China M2, Speech from ECB's Lagarde

US stocks and bonds were hit alongside losses in Eurozone assets after a hawkish ECB, while a downgrade in the central bank's growth forecasts and fresh COVID concerns in China added to the pressure for risk sentiment.
SPX -2.39% at 4,017, NDX -2.74% at 12,269, DJIA -1.94% at 32,272, RUT -2.10% at 1,850.
Click here for a detailed summary.

NOTABLE US HEADLINES

US President Biden’s USD 52bln chip plan reportedly stalled as lawmakers eye elections and senators are reportedly frustrated with the White House for lack of engagement, according to Bloomberg.
US Treasury Secretary Yellen said she does not think the US is going to have a recession and expects growth to slow down but added that consumer and investment spending is solid, while she commented that it is amazing how pessimistic people are considering that the US has the strongest labour market in a post-war period, according to Reuters.
US senior official expects Friday's CPI data to show a continued impact of the Russian invasion of Ukraine on food and energy prices, as well as spillover from supply chains, while the official expects to see inflation in prices of goods to moderate in months ahead, according to Reuters.

Ukrainian President Zelensky said there has been positive military news from the Zaporizhzhia region and said that Ukrainian forces are gradually advancing in the Kharkiv region, according to Reuters.
Ukraine is reportedly likely to win initial EU backing for a path to membership, according to Bloomberg.

IAEA report noted Iran's decision to remove cameras could have detrimental implications for the IAEA's ability to assure the peaceful nature of Iran's nuclear programme, according to Reuters.
Britain, France and Germany condemned the steps taken by Iran following the IAEA board resolution which they said aggravates the situation and complicates efforts to return to the nuclear deal, according to Reuters.

APAC stocks were mostly negative after the glum mood rolled over from global counterparts with a hawkish ECB meeting and fresh COVID restrictions in Beijing stoking growth slowdown concerns.
ASX 200 was dragged lower by the energy and mining-related sectors after recent declines in underlying commodity prices and with participants taking risk off the table ahead of the extended weekend in Australia.
Nikkei 225 retreated beneath the 28k level amid the broad risk aversion and as the domestic currency found some reprieve from its weakening trend.
Hang Seng and Shanghai Comp. were both initially subdued after weak earnings and Ant Group’s denial regarding plans to relaunch its mammoth IPO, while participants also digested the mixed inflation data from China and the latest COVID restrictions in Beijing, although the mainland then spent the session recouping lost ground.
US equity futures languished near the prior day's lows and lacked direction ahead of the US CPI data; ES +0.1%
European equity futures are indicative of a lower open with Eurostoxx 50 -0.9% after the cash market closed with losses of 1.7% yesterday.

DXY slightly pulled back from its 3-week highs although remained above 103.00 ahead of US CPI data.
EUR/USD remained subdued after wiping out the initial gains from the ECB meeting. The pair maintains 1.06 status for now.
GBP/USD was lacklustre near 1.2500 with PM Johnson looking to move on to cutting taxes after surviving the scathing revolt at the beginning of the week
USD/JPY retraced some of its recent advances and JPY crosses were lower amid haven inflows.
Antipodeans attempted to nurse recent losses but were contained by the downbeat mood and weaker PBoC reference rate.

10yr UST futures were lacklustre following the global bond selling pressure in the aftermath of the hawkish ECB.
Bunds remained despondent post-ECB with focus on peripheral bond spreads as the prospect of fragmentation remains in focus.
10yr JGBs were subdued in sympathy to recent losses in global peers and with the BoJ only in the market under its daily fixed-rate operations.

Crude futures declined amid COVID woes and with pressure seen as Chinese commodities came online.
Libyan key oil ports Es Sider & Ras Lanuf are reportedly to shut down, according to Bloomberg.
US State Department summit advisor said Venezuelan oil won't be on the market anytime soon and suggested to not rely on that for any sort of relief here in the US, according to CNBC.
Kuwait set July KEC crude OSP for Asia at Oman/Dubai +USD 6.15/bbl vs prev. premium of USD 4.35/bbl in June, according to Reuters.
Spot gold is subdued and trickled away from resistance at USD 1850 ahead of the US CPI data.
Copper prices extended their declines amid the global growth concerns and China COVID woes.
Peruvian communities said they are ready to end the 51-day shutdown at MMG's (1208 HK) Las Bambas mine and allow the copper mine to restart, while the mine will not begin construction of the Chalcobambas pit during a 30-day truce and the Peru government will lift the state of emergency in the Las Bambas mine area, according to Reuters.

Bitcoin was choppy overnight but gradually covered from early selling pressure and rose back above 30,000.

NOTABLE APAC HEADLINES

South Korean Transport Ministry held a meeting with the trucker union leadership on Friday and is holding a working-level meeting with the union, while it added that about 7,500 unionised truck drivers were expected to strike today. It was also reported that striking South Korean truckers halted and turned around non-union truckers from trying to enter the Ulsan petrochemical complex and the movement of containers through South Korea's Ulsan port was totally suspended amid the trucker strike, according to Reuters.

DATA RECAP

EU/UK

NOTABLE HEADLINES

On the ECB decision, one dovish member said “impression is everybody lost”, described the EGB and EUR downside as “..not what you want”; conversely, a hawk described the meeting as having gone very well. Additionally, re. QT, a dovish member does not believe this will happen any time soon, according to FT.
UK employers hired staff at the slowest pace since early 2021, according to a survey by REC cited by Reuters which showed the measure declined for a sixth consecutive month to 59.2 from 59.8 M/M but remained in expansion territory above the 50 benchmark level.
Former UK Brexit Minister Frost has warned that PM Johnson must deliver a "new Conservative vision for Britain" or risk being removed from his position by the autumn, according to the Telegraph.