• APAC stocks traded mixed with price action mostly rangebound following on from the subdued performance stateside.
• Apple (AAPL) announced its new VR headset, Apple Vision Pro, which augments reality with the real world.
• RBA delivered a surprise 25bps rate hike and kept the door open for further policy tightening.
• European equity futures are indicative of a contained open with the Euro Stoxx 50 flat after the cash market closed down 0.7% yesterday.
• DXY remains sub-104, AUD leads post-RBA, EUR/USD holds onto the 1.07 handle.
• Looking ahead, highlights include EZ Retail Sales, Supply from UK, Germany & EU syndication.

US TRADE

EQUITIES

• US stocks finished mostly lower after a 'sell the news' reaction to the announcement of Apple's (AAPL) VR headset unwound the earlier strength, while participants also digested several data releases including the weaker-than-expected ISM Services PMI and US Factory Orders.
• SPX -0.20% at 4,273, NDX +0.07% at 14,556, DJIA -0.59% at 33,562, RUT -1.32% at 1,806.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Apple (AAPL) announced its new M2 Ultra chip which features in the new Mac Studio and Mac Pro, while it announced its VR headset, Apple Vision Pro, which augments reality by "seamlessly" blending the digital world with the real world and partners with Disney (DIS) on content for the headset. Disney+ is to be available on the Vision Pro and it is working with Unity (U) to bring apps to the Vision Pro, while the Vision Pro price will start at USD 3,499 and will not be available until 2024 with availability in the US only at first and other countries later in the year.

APAC TRADE

EQUITIES

• APAC stocks traded mixed with price action mostly rangebound following on from the subdued performance stateside where participants 'sold the news' following Apple's headset announcement and with sentiment clouded by weak data releases.
• ASX 200 was led lower by underperformance in the consumer-related sectors and top-weighted financial industry, with losses later exacerbated after the RBA delivered a surprise 25bps rate hike to lift the Cash Rate Target to 4.10% and it also kept the door open for further policy tightening.
• Nikkei 225 was initially pressured after disappointing Household Spending and Labour Earnings data which briefly dragged the index beneath the psychological 32,000 level where it then found support and staged a recovery amid dip buying.
• Hang Seng and Shanghai Comp. were somewhat varied with the former boosted by strength in property names, although the mainland was less decisive and lagged amid mixed US-China rhetoric.
• US equity futures were little changed overnight after the prior day's uninspiring finish.
• European equity futures are indicative of a contained open with the Euro Stoxx 50 flat after the cash market closed down 0.7% yesterday.

FX

• DXY remained softer and retreated beneath the 104.00 level in the aftermath of the disappointing ISM Services and US Factory Orders data, although price action was contained owing to the relatively quiet US newsflow.
• EUR/USD held on to the prior day’s mild gains after having reclaimed the 1.0700 status and with recent commentary from ECB's Lagarde and Nagel highlighting ongoing concern about inflation.
• GBP/USD was kept afloat near the 1.2450 level amid the recent headwinds for the greenback.
• USD/JPY traded sideways after pulling back from the 140.00 handle but with the downside stemmed after weaker household spending and wages data.
• Antipodeans were firmer with AUD/USD boosted after the RBA delivered a second consecutive surprise rate hike and reiterated that the Board remains resolute in its determination to return inflation to the target and some further tightening of monetary policy may be required.
• PBoC set USD/CNY mid-point at 7.1075 vs exp. 7.1080 (prev. 7.0904)

FIXED INCOME

• 10yr UST futures mildly pulled back following yesterday’s data-induced bull-flattening as upward momentum was capped by resistance at the 114.00 level.
• Bund futures remained subdued after slipping beneath 135.00 and hawkish ECB rhetoric.
• 10yr JGB futures were kept afloat after soft data releases albeit with advances limited by weaker results at the 30yr auction.

COMMODITIES

• Crude futures were rangebound overnight after reversing the entirety of Sunday's Saudi-engineered spike, with the retracement in oil attributed to growth and demand concerns.
• Spot gold traded sideways and held on to its recent gains amid the lacklustre dollar.
• Citi continues to recommend dip buying in gold and silver into year-end, while it now prefers zinc across the industrial metals complex as the relative outperformer for a tactical summer bounce.
• Copper futures were choppy alongside the somewhat non-committal tone in risk assets.

CRYPTO

• Bitcoin was lacklustre overnight and languished beneath the USD 26,000 level after the prior day's slump amid reports that the SEC is suing Binance and its CEO Zhao for breaking US securities rules.
• US SEC said Binance secretly controlled the Binance US platform operations and it charged Binance for unregistered offers and sales of BNB and BUSD, while it alleged that Binance and its CEO Zhao misled investors about their risk controls.

NOTABLE ASIA-PAC HEADLINES

• RBA surprisingly raised the Cash Rate Target by 25bps to 4.10% (exp. 3.85%), while it reiterated that the Board remains resolute in its determination to return inflation to the target and some further tightening of monetary policy may be required. It also repeated that inflation in Australia has passed its peak, but at 7% is still too high and it will be some time yet before it is back in the target range. RBA stated that this further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable timeframe, as well as noted that recent data indicates that the upside risks to the inflation outlook have increased and the Board has responded to this.
• US diplomats held candid and productive discussions with Chinese counterparts, while US officials made it clear that the US would compete vigorously and stand up for US interests and values. Chinese state media also reported that China's Vice Foreign Minister and US State Department senior official Kritenbrink had a frank, constructive and fruitful communication on promoting Sino-US relations and properly managing differences, while China stated its solemn position on Taiwan and both sides agreed to maintain communication.
• Former ByteDance executive claimed the Chinese Communist Party accessed TikTok's Hong Kong user data, according to WSJ. It was separately reported that Vietnam's ministry found TikTok violations during its inspection.

DATA RECAP

• Japanese All Household Spending MM (Apr) -1.3% vs. Exp. 0.6% (Prev. -0.8%)
• Japanese All Household Spending YY (Apr) -4.4% vs. Exp. -2.3% (Prev. -1.9%)
• Japanese Labour Cash Earnings YY (Apr) 1.0% vs Exp. 1.8% (Prev. 0.8%, Rev. 1.3%)
• Australian Current Account Balance (AUD)(Q1) 12.3B vs. Exp. 15.0B (Prev. 14.1B)
• Australian Net Exports Contribution (Q1) -0.2% vs. Exp. -0.6% (Prev. 1.1%)

GEOPOLITICS

• Twitter sources reported that the Nova Kakhovka Dam was blown up in southern Ukraine, while Ukraine's south military command later confirmed that the dam was blown up by Russian forces. Furthermore, a Moscow-backed official said there was no critical danger to the Zaporizhzhia nuclear plant yet from the destruction of the dam, according to Reuters.
• Russia's Defence Ministry said they destroyed 8 leopard tanks in the Donetsk region and that Ukraine continues with its offensive in Donetsk, while it also noted huge losses were inflicted on Ukrainian forces in Donetsk and that Ukrainian forces are deploying fresh troops in the eastern combat zone, according to Reuters.
• Ukraine's Foreign Minister said Ukraine will "probably" only be able to join NATO after the end of the war and said Ukraine has enough weapons to begin its counter-offensive, according to Reuters.
• White House said the US is seeing an increasing level of aggressiveness by China's military and the US is prepared to address growing aggressiveness. White House stated the US wants to see Beijing justify what it is doing with increased military and said both recent Chinese intercepts occurred in international space, while it added that it won't be long before someone gets hurt and that unsafe intercepts can lead to miscalculations.

EU/UK

NOTABLE ASIA-PAC HEADLINES

• Barclaycard said UK May consumer spending rose 3.6% Y/Y and noted that higher food prices limited discretionary spending, according to Reuters.

DATA RECAP

• UK BRC Retail Sales Like-For-Like YY (May) 3.7% (Prev. 5.2%)
• UK BRC Total Sales YY (May) 3.9% (Prev. 5.1%)