• APAC stocks traded mostly higher following the gains on Wall St where the S&P 500 entered a bull market and tech outperformed.
• European equity futures are indicative of a marginally higher open with the Euro Stoxx 50 +0.1% after the cash market closed up 0.1% yesterday.
• DXY is contained just below 103.50, EUR/USD sits around two week highs, USD/JPY has reclaimed 139 status.
• US Secretary of State Blinken's long-delayed Beijing trip is now in planning for next week, according to Politico.
• White House said the report that Iran and the US are nearing a deal on Iranian uranium enrichment and sanctions relief is false.
• Looking ahead, highlights include Canadian Jobs Data & Speech from ECB's de Guindos.

US TRADE

EQUITIES

• US stocks were mostly higher and the S&P 500 officially entered a technical bull market after climbing 20% from its October 2022 low, while particular outperformance was seen in duration/tech as US yields tumbled due to the highest initial jobless claims print since October 2021. Furthermore, the recessionary fears from the troubling labour market data catalysed a pullback in the Russell 2k small-cap index.
• SPX +0.62% at 4,293, NDX +1.27% at 14,484, DJIA +0.50% at 33,833, RUT -0.41% at 1,880.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed Discount Window borrowing at USD 3.2bln on June 7th (prev. 4bln on May 31st), while 'Other Credit' was at USD 185.2bln (prev. 188.1bln) and BTFP lending was at USD 100.2bln (prev. 93.6bln), according to Reuters.
• WSJ's Timiraos tweeted that the Atlanta Fed wage tracker showed composition adjusted wage growth for the 3 months to May rose 6% Y/Y but was down from 6.1% in April and 6.4% in March, which is slowing although remains well above levels consistent with 2% inflation.
• Former US President Trump was indicted on seven counts related to the handling of classified documents and obstruction of justice, while he was summoned to appear at the federal courthouse in Miami on Tuesday.
• US House Speaker McCarthy said it is unconscionable for a president to indict the leading candidate opposing him and stated that he and every American who believes in the rule of law stand with former President Trump, while McCarthy added that House Republicans will hold this brazen weaponisation of power accountable.

APAC TRADE

EQUITIES

• APAC stocks traded mostly higher following the gains on Wall St where the S&P 500 entered a bull market and tech outperformed as yields declined due to labour market concerns after Initial Jobless Claims spiked to the highest level since October 2021.
• ASX 200 was led by strength in the tech and the mining industries but with upside capped by pressure in the energy sector after oil prices dropped on reports that Iran and US were near an interim deal on nuclear enrichment and oil exports which was later refuted by the White House.
• Nikkei 225 spearheaded the advances amongst the major indices with the index back above the 32,000 milestone.
• Hang Seng and Shanghai Comp. were indecisive after weaker-than-expected Chinese inflation data continued to point to an uneven economic rebound, although there were some hopes of a thawing in US-China relations with Secretary of State Blinken’s delayed trip to Beijing said to be in planning for next week.
• US equity futures consolidated near the prior day's highs as the bullish momentum from yields waned.
• European equity futures are indicative of a marginally higher open with the Euro Stoxx 50 +0.1% after the cash market closed up 0.1% yesterday.

FX

• DXY was rangebound but saw some mild reprieve from yesterday’s selling pressure which emanated from a decline in yields after Initial Jobless Claims spiked to the highest level since October 2021.
• EUR/USD sat near 2-week highs with a firm footing above 1.0700 after benefitting from the dollar’s demise.
• GBP/USD took a breather after cyclical currencies were recently underpinned by the heightened risk appetite.
• USD/JPY nursed some of its losses and reclaimed the 139.00 status, while there were also recent comments from BoJ Governor Ueda who reiterated that they will patiently maintain current monetary easing.
• Antipodeans stalled overnight amid a relatively quiet calendar and softer-than-expected Chinese inflation.
• PBoC set USD/CNY mid-point at 7.1115 vs exp. 7.1122 (prev. 7.1280)
• Turkish President Erdogan appointed Hafize Gaye Erkan as the Central Bank Governor and appoints former Governor Kavcioglu as head of the banking watchdog, according to Reuters.

FIXED INCOME

• 10yr UST futures slightly pulled back overnight following the prior day’s bull flattening which was spurred as a spike in initial jobless claims unwound rate hike pricing and with price action also accentuated by a tumble in oil.
• Bund futures held on to yesterday’s spoils but with further gains limited after stalling near the 134.00 level.
• 10yr JGB futures were kept afloat albeit with upside limited despite the BoJ’s presence in the market for over JPY 1.5tln of JGBs on top of its daily fixed-rate ops.

COMMODITIES

• Crude futures remained subdued but well off the prior day's lows with initial selling pressure from reports that Iran and US were near an interim deal on nuclear enrichment and oil exports which the White House refuted.
• Saudi Crown Prince MBS reportedly threatened major economic pain on the US economy last fall amid the oil feud, according to Washington Post.
• Spot gold traded sideways after having benefitted from a softer dollar and recent decline in yields.
• Copper futures were lacklustre alongside the indecisive mood in its largest purchaser, China, after the softer-than-expected inflation data.

CRYPTO

• Bitcoin lacked direction and oscillated around the USD 26,500 level amid ongoing regulatory headwinds.
• US SEC Chair Gensler said crypto security issuers need to register the offer and sale of their investment contracts with the SEC or meet requirements for exemption, while he added that the vast majority of crypto tokens meet the SEC's investment contract test. Gensler also commented that the crypto market is full of Ponzi schemes and frauds which can only be cleaned up with securities regulations, according to Cointelegraph.
• Binance US said it is suspending US currency deposits in the aftermath of the SEC lawsuit and its banking partners are preparing to pause fiat USD withdrawal channels as soon as June 13th, according to Reuters

NOTABLE ASIA-PAC HEADLINES

• US Secretary of State Blinken's long-delayed Beijing trip is now in planning for next week, according to Politico.
• UK and US agreed on a partnership to boost economic security in response to the growing threat of China, according to Sky News.
• BoJ Governor Ueda said they will patiently maintain current monetary easing and noted that by supporting the economy, they can create a positive economic cycle where wages rise on a nominal and real basis. Ueda also stated that retaining BoJ's ETF holdings is among the options, but added that what they will do with their holdings in the event of an exit is something that must be discussed at the BoJ's policy meeting at the time.

DATA RECAP

• Chinese CPI MM (May) -0.2% vs. Exp. -0.1% (Prev. -0.1%)
• Chinese CPI YY (May) 0.2% vs. Exp. 0.3% (Prev. 0.1%)
• Chinese PPI YY (May) -4.6% vs. Exp. -4.3% (Prev. -3.6%)

GEOPOLITICS

• Iran and the US were initially reported to be near an interim deal on nuclear enrichment and oil exports, while direct talks between US Special Envoy to Iran Malley and Iran's ambassador to the UN have taken place but it remains to be seen whether senior officials back it, according to Middle East Eye citing an Iranian source. However, the White House said the report that Iran and US are nearing a deal on Iranian uranium enrichment and sanctions relief is false.
• US President Biden said the US will have funding for Ukraine for as long as it takes, according to FT. It was also reported that the US Pentagon is readying a new USD 2bln Ukraine air defence package, according to Reuters.
• White House said in the Atlantic Declaration that they face new challenges to international stability from authoritarian states such as Russia and China.
• White House National Security Council spokesperson Kirby said it is not accurate when asked about the WSJ report on China establishing a spy facility in Cuba, according to an MSNBC interview.
• Russian commander said Ukraine tried to launch a surprise attack on Zaporizhzhia, according to Interfax.

EU/UK

NOTABLE HEADLINES

• UK is to introduce a floor for oil and gas windfall tax with Chancellor Hunt expected to confirm plans to introduce a floor on the 35% levy so that it will only apply if oil and gas prices are above a certain level, according to FT.