• European bourses & US futures are contained with newsflow limited and the docket ahead sparse
• USD/JPY lifted by dovish BoJ sources with the DXY firmer and above 103.50, Yuan hit on soft CPI
• Fixed benchmarks relatively rangebound into the weekend and looking to next week’s key events
• Crude pivots particularly narrow parameters while XAU slips and base metals grind higher
• US Secretary of State Blinken's long-delayed Beijing trip is now in planning for next week, according to Politico.
• Looking ahead, highlights include Canadian Jobs Data.

EUROPEAN TRADE

EQUITIES

• European bourses are contained as the complex once again struggles for direction amid a lack of fresh/scheduled catalysts, Euro Stoxx 50 -0.2%.
• Sectors are mixed with Basic Resources outperforming amid broader metals action while Chemicals lag after a Croda profit warning.
• Stateside, futures are slightly in the red with action very much contained given the mentioned lack of fresh drivers thus far and scheduled, ES -0.1%.
• Click here and here for a recap of the main European updates.
• Click here for more detail.

FX

• Yen bulls out-doved by BoJ sources as USD/JPY rebounds further from sub-139.00 lows towards 140.00.
• DXY boosted by Yen retreat and index back over 103.500 from 103.310 at one stage.
• Norwegian Krona boosted by hotter than forecast inflation data, with EUR/NOK towards base of 11.6500-11.7700 range.
• Yuan back under pressure on the back of soft Chinese CPI and PPI metrics, as USD/CNY and USD/CNH eye 7.1300 and 7.1400 respectively.
• Loonie underpinned around 1.3350 vs Greenback pre-Canadian labour market report and post-BoC surprise hike.
• 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.
• Click here for notable OpEx for the NY Cut.
• Click here for more detail.

FIXED INCOME

• Bonds out of lock-step approaching end of the week and awaiting big risk events including Fed, ECB and US CPI data.
• Bunds meander within 133.85-51 range, Gilts outperform between 95.99-96.58 bounds and T-note lags near 113-13 trough vs 113-23 peak.
• JGBs underpinned after BoJ sources report chiming with guidance signalling no YCT tweak in June.
• Click here for more detail.

COMMODITIES

• Crude benchmarks are posting upside of circa. USD 0.20/bbl on the day and reside towards the upper-end of exceptionally narrow sub USD 1.00/bbl parameters.
• Price action which is well within the bounds of recent sessions, nonetheless the complex is set to see the week out with downside of just over USD 3.00/bbl, with the bulk of this occurring on Monday post-OPEC+.
• Spot gold is essentially unchanged and has been gradually drifting off Thursday’s WTD best of USD 1970/oz, where the 21-DMA also resides, as the USD continues to firm up.
• Base metals are generally contained and are proving to be a touch more resilient vs their precious counterparts against the USD’s strength and are perhaps gleaning support from the increasing calls for official Chinese support.
• Saudi Crown Prince MBS reportedly threatened major economic pain on the US economy last fall amid the oil feud, according to Washington Post.
• Russian Ambassador to Turkey says they continue consultations, but there are no grounds which exist for a grain deal renewal, via Ria.
• Click here for more detail.

CRYPTO

• US SEC Chair Gensler 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 EUROPEAN 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.

DATA RECAP

• Norwegian Core Inflation YY (May) 6.7% vs. Exp. 6.2% (Prev. 6.3%); Consumer Price Index YY (May) 6.7% vs. Exp. 6.2% (Prev. 6.4%)

NOTABLE US 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.
• US Democrats are planning to introduce a bill that would overhaul the debt ceiling process, according to WSJ.
• Click here for the US Early Morning Note.

GEOPOLITICS

• 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.
• Two reportedly injured in a drone strike in Voronezh, Russia, via Reuters citing regional governor.
• Russian General Staff Chair Gerasimov invites his Chinese counterpart to visit Russia, adding relations are at the highest level, joint army training between China and Russia is important, should be ongoing.
• There is reportedly not a temporary deal to replace the JCPOA on the agenda, via IRNA.

APAC TRADE

• 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.

NOTABLE ASIA-PAC HEADLINES

• US Secretary of State Blinken's long-delayed Beijing trip is now in planning for next week, according to Politico.
• 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.
• BoJ reportedly said to still see a need to continue monetary stimulus, via Bloomberg citing sources; hitting price goal as out of sight, little need to tweak YCC in June. Reportedly sees inflation as stronger than expected.
• PBoC Governor says Q2 GDP YY growth is expected to be high, primarily due to base effects, CPI expected to gradually increase in H2, will be above 1.0% YY by December.

DATA RECAP

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