• European bourses are subdued, Euro Stoxx 50 -1.9%, as Tuesday's positivity waned in the APAC session as commodities slipped
• Stateside, futures are in-fitting with the above action, ES -1.4%, where participants are awaiting the first session of testimony from Chair Powell
• DXY bid but mid-range pre-Powell with peers conforming to the tone as JPY & CHF benefit while activity currencies slip
• Commodities are, broadly speaking, curtailed though gold is cushioned given its haven-status; Biden is due to speak on fuel prices later
• Bonds bounce on broader risk sentiment though Bunds fade somewhat post issuance
• Looking ahead, highlights include Canadian CPI & EZ Consumer Confidence (Flash), Speeches from Fed's Powell, Barkin, Evans & Harker, BoC's Rogers, Supply from the US.

As of 11:25BST/06:25ET

LOOKING AHEAD

• Canadian CPI & EZ Consumer Confidence (Flash), Speeches from Fed's Powell, Barkin, Evans & Harker, BoC's Rogers, Supply from the US.
• Click here for the Week Ahead preview

GEOPOLITICS

• Russian Defence Ministry says they have agreed with Turkey to continue consultations re. safe vessel departures and grain exports from Ukraine, via Ria.
• Russia's Kremlin says it is still working on retaliatory sanctions against Lithuania after it imposed a ban on transit of some Russian goods by rail. Adds, EU sanctions that led to Lithuania to impose this ban are "absolutely unacceptable".
• Israel Parliament's Knesset votes to disband, an initial step towards snap elections.

EUROPEAN TRADE

CENTRAL BANKS

• ECB's de Guindos says he expects inflation to ease after the summer but stay near current levels in the coming months; Governing Council is yet to discuss details of the anti-fragmentation tool. New tool should be different from the prior OMT tool as the circumstances are different, will also differ from APP and PEPP.
• Norwegian Gov't names Paal Longva as Deputy Norges Bank chief.

EQUITIES

• European bourses are subdued, Euro Stoxx 50 -1.9%, as Tuesday's positivity waned in the APAC session as commodities slipped in relatively limited newsflow.
• Unsurprisingly given this dynamic, the Basic Resources and Energy sectors are the European laggards, amid broader cyclical pressure.
• Stateside, futures are in-fitting with the above action, ES -1.4%, where participants are awaiting the first session of testimony from Chair Powell, newsquawk primer available here.
• Ant Group is reportedly to apply, as soon as this month, for a key financial license, via Bloomberg citing sources.
• Toyota (7203 JT) expects global vehicle production in July to be around 800k.
• China's CPCA says domestic car rales rose 39% in the week to June 13th Y/Y, +55% M/M, via Reuters.
• Click here for more detail.

FX

• Dollar regains bullish momentum on risk dynamics ahead of Fed testimony; DXY on a firmer footing, but capped ahead of 105.000 within 104.950-430 range.
• Yen also in demand as a safe haven as sentiment sours, USD/JPY reverses course from around 136.71 to sub-136.00 at one stage.
• Kiwi and Aussie undermined by risk-off mood, with latter also hampered by heavy decline in iron ore; NZD/USD hovers above 0.6250 and well below 1bln option expiries at 0.6300, AUD/USD capped around 0.6900.
• Loonie, Nokkie and Peso ruffled by collapse in WTI and Brent crude, USD/CAD rebounds towards 1.3000, EUR/NOK tests 10.5000 and USD/MXN straddles 20.1800.
• Euro holds around 1.0500 and 10 DMA close by amidst hawkish ECB vibe, Pound pivots 1.2200 after somewhat mixed UK inflation data.
• Click here for more detail.

Notable FX Expiries, NY Cut:

• NZD/USD: 0.6200 (532M), 0.6300 (1.0BN), 0.6430 (300M)
• Click here for more detail.

FIXED INCOME

• Bonds bounce firmly as risk sentiment turns bearish again on global inflation and recession concerns.
• Bunds up to 144.87 before fading after a reasonable 2038 German auction.
• Gilts top out at 111.89 and largely ignored mixed UK inflation metrics vs consensus.
• 10 year T-note hovers closer to 116-19 overnight peak than 115-28+ trough pre-Fed chair Powell and 20 year supply plus other Fed speakers.
• Click here for more detail.

COMMODITIES

• WTI and Brent are, alongside broader commodities, pressured with fresh catalysts somewhat thin and focused on known themes.
• Currently, they are lower by over 4% on the session and ahead of Biden's announcement on gas prices; though, if implemented, such measures could serve to push demand and ultimately prices higher.
• US President Biden will deliver remarks on gas prices at around 14:00EDT/19:00BST on Wednesday and will call on Congress to implement a suspension to the federal fuel tax.
• Subsequently, multiple Democratic sources said that the effort to to suspend the federal gas tax for three months stands almost no chance of passing, according to Politico.
• IEA warns Europe to prepare for a complete shutdown of Russian gas exports and that governments should keep ageing nuclear plants open and take other contingency measures, according to FT.
• World Steel says global steel output -3.5% Y/Y in May at 162.7mln tonnes (prev. -5.1% Y/Y in April); China crude steel output -3.5% Y/Y to 96.6mln tonnes (prev. -5.2% Y/Y in April).
• Spot gold is softer in-line with other metals, though the magnitude is more contained given its haven allure; broader action that sees LME Copper clipped despite the expected commencement of Chile strike action.
• Click here for more detail.

NOTABLE EUROPEAN HEADLINES

• UK PM Johnson is of the view that the government must win its battle with the rail unions and is prepared for the stand-off to last months, according to The Times.
• Italy is reportedly preparing EUR 3bln of aid to curb energy bills, according to la Repubblica
• Italian Foreign Minister Di Maio quit the 5-Star Movement (5SM) to set up a new group, according to Reuters.

NOTABLE EUROPEAN DATA

• UK CPI YY (May) 9.1% vs. Exp. 9.1% (Prev. 9.0%); MM (May) 0.7% vs. Exp. 0.6% (Prev. 2.5%)
• Core CPI YY (May) 5.9% vs. Exp. 6.0% (Prev. 6.2%); MM (May) 0.5% vs. Exp. 0.6% (Prev. 0.7%)

NOTABLE US HEADLINES

• US President Biden said they will get through this year with COVID funding but it is not enough for the next pandemic, while Biden also noted that he hasn't set a time regarding talks with Chinese President Xi, according to Reuters.
• US Treasury Secretary Yellen said she believes there is a path to bringing down inflation while maintaining a strong labour market. Yellen also stated that the traditional recession measure of two consecutive quarters of negative growth has typically worked but recessions aren't alike and that most economists do not believe the US will enter a recession because they are taking into account post-pandemic economic features, according to Reuters.
• White House economic adviser Boushey said she remains optimistic that the US can avoid a recession and responded that US President Biden is considering anything he can to lower prices when asked if Biden will cut tariffs on Chinese imports, according to Reuters.
• Click here for the US Early Morning note.

CRYPTO

• Bitcoin is pressured and has once again dipped below the USD 20k mark, to a trough of USD 19.95k. Though, it remains someway from last week's USD 17.5k low.

APAC TRADE

EQUITIES

• APAC stocks were subdued after the risk-on mood from Wall Street waned overnight amid pressure in commodities and with global markets lacking any fresh macro catalysts.
• ASX 200 pared early gains as resilience in energy and defensives was offset by losses in tech and financials.
• Nikkei 225 was indecisive after the Japanese currency bounced off its weakest level since 1998.
• Hang Seng and Shanghai Comp. were subdued amid ongoing COVID woes as Macau closed most public services through to Friday and with the Chinese city of Zhuhai also shutting entertainment venues in some areas, while there was some encouragement for the property sector with Chinese property developers planning to meet with banks regarding relief measures in July.

NOTABLE APAC HEADLINES

• Chinese property developers are planning to meet with banks regarding relief measures in July, according to Shanghai Securities News.
• Chinese Premier Li Keqiang’s struggle to revive China’s economy under the zero-Covid policy championed by President Xi Jinping has spurred rumours of rifts between the country’s top two leaders and considerable speculation over succession plans, according to SGH Macro Advisors.
• BoJ April meeting minutes stated board members agreed on no change in the BoJ's stance of taking additional easing steps as needed and a member noted that rising raw material costs would hurt the economy so they must keep powerful monetary easing. Furthermore, it was stated that Japan's monetary policy challenge is to address too-low inflation, unlike in western economies, while a member said it is inappropriate to change the monetary policy stance as Russia's invasion of Ukraine added to the downside risks for Japan's economy.

DATA RECAP

• Australian Westpac Leading Index MM (May) -0.1% (Prev. -0.2%, Rev. -0.1%)
• New Zealand Trade Balance (May) 263M (Prev. 584.0M, Rev. 440M)
• New Zealand Exports (May) 6.95B (Prev. 6.31B, Rev. 6.16B); Imports (May) 6.69B (Prev. 5.73B, Rev. 5.72B)