• European bourses & US futures are firmer despite a distinct lack of fresh drivers ahead of the week’s key events
• DXY wanes with Antipodeans firmer, EUR rebounding towards 1.08 and GBP bid post-Haskel
• Gilts underperform generally subdued core benchmarks following BoE remarks while BTPs and JGBs buck the bearish trend
• Crude and base metals continue to slip with spot gold benefits from the softer USD
• China’s Foreign Ministry says they have no information on a Blinken visit
• Looking ahead, highlights include US NY Fed SCE & supply from the US.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer across the board, Euro Stoxx 50 +1.0%, despite a lack of fresh drivers and newsflow light.
• Sectors are green across the board and feature outperformance in consumer-related names after updates for French Retail, European Gamers and favourable broker updates on Adidas, among others.
• On the flip side, Energy and Basic Resource names lag on benchmark pricing with the latter occurring despite the upside in Glencore after its latest Teck Resources proposal.
• Stateside, futures are firmer though with action slightly more contained while the NQ +0.5% outperforms incrementally amid/ahead of numerous AI-related updates, click here for details.
• GS on S&P 500 by end-2023: 4500 (prev. 4000), 25% chance of US recession within the next 12-months.
• EU antitrust regulators set to approve Broadcom's (AVGO) USD 61bln bid for VMware (VMW), via Reuters citing sources.
• Click here and here for a recap of the main European updates.
• Click here for more detail.

FX

• DXY wanes ahead of key risk events as the index tests recent lows within 103.700-240 range.
• Aussie and Kiwi outperform as risk sentiment improves and the former extends post-RBA hike gains, AUD/USD approaches 0.6775 and NZD/USD probes 0.6150.
• Euro rebounds from sub-1.0750 low towards a double top just shy of option expiries between 1.0790-1.0800 vs Greenback and Pound pulls up just shy of 1.2600 after hawkish-sounding commentary from BoE's Haskel.
• PBoC set USD/CNY mid-point at 7.1212 vs exp. 7.1214 (prev. 7.1115)
• Indian Trade Minister says the RBI and the UAE central bank are in active dialogue for INR-AED trade.
• Nigeria’s new President suspended the country’s Central Bank Governor, according to Reuters.
• Click here for notable OpEx for the NY Cut.
• Click here for more detail.

FIXED INCOME

• BTPs and JGBs buck bearish trend in debt ahead of data, Central Bank policy meetings and supply on technical and fundamental factors.
• Gilts underperform between 95.76-96.26 parameters post-hawkish vibes from BoE's Haskel.
• Bunds and T-notes more restrained within 134.25-133.91 and 113-13+/06+ respective ranges.
• Click here for more detail.

COMMODITIES

• Crude and base metals continue to slip with the oil action a resumption of the post-OPEC+ downward trend and after GS cut their December forecasts.
• Currently, WTI and Brent are at the lower-end of USD 67.67-70.33/bbl and USD 72.41-74.87/bbl parameters for the session.
• Base metals remain under pressure on China-related growth concerns and exacerbated by the Goldman Sachs warning on the property market while spot gold has managed to glean some incremental upside from the softer USD.
• Saudi Energy Minister said Saudi Arabia and China have plenty of synergies and that demand for oil in China is still growing, while he wouldn’t be surprised if there will be more announcements soon on Saudi-Chinese investments and China will be more engaged with them on mid-stream business. Saudi’s Energy Minister also said that they went through a comprehensive reform to achieve the OPEC+ agreement and they are working against uncertainty and sentiment, as well as noted that Saudi and OPEC+ are more interested in doing a regulator job, according to Reuters.
• Saudi Aramco is to supply full contract volumes of crude oil to at least 5 North Asian refiners in July, according to sources cited by Reuters.
• Iraq's Parliament approved the 2023 Budget which set oil prices at USD 70/bbl and projects exports of 3.5mln bpd including 400k bps from the Kurdish region, according to Reuters.
• US is expected to begin unloading oil from a seized Iranian tanker which risks escalating a shadow tanker war with Tehran, according to FT.
• Venezuela’s PDVSA resumed operations in the El Palito refinery, according to Reuters.
• Goldman Sachs cuts its December Brent crude forecast to USD 86/bbl from 95/bbl and cut WTI crude price forecast to USD 81/bbl from 89/bbl, while it noted that Russian and Iranian oil supply are significantly above expectations despite Saudi's cut and it raised H2 2023-2024 global supply forecast excluding core OPEC by around 800k bpd.
• TC Energy has completed the shutdown of two compressor stations on the NOVA Gas Transmission system which were in proximity to Alberta wildfires.
• Chinese CSCEC are in talks with Saudi PIF to build the largest steel structure manufacturer in Riyadh, with production capacity of 800k tonnes per annum, according to a chairman cited by Reuters.
• Click here for more detail.

CRYPTO

• Bitcoin is under modest pressure despite the constructive risk tone and as the USD pulls back, with specifics limited and the agenda ahead for today a particularly sparse one before a blockbuster week of key risk events.

NOTABLE EUROPEAN HEADLINES

• BoE's Mann said Britain and other rich nations should consider a carbon tax to lower greenhouse gas emissions, while she refrained from commenting on the short-term economic outlook in her essay for Resolution Foundation think tank, according to Reuters. BoE's Mann also urged the UK government to move economic policy away from being an emergency response tool and onto a more sustainable footing.
• BoE's Haskel says it is important we continue to lean against the risks of inflation momentum, further increases in interest rates cannot be ruled out*; monitoring indicators of inflation momentum and persistence closely.
• EU's VP Sefcovic says he will not be putting the trade deal "in the shredder", scotching hopes in some quarters in the UK, of early renegotiation of the trade and cooperation agreement, according to Guardian's O'Carroll.
• Police in Scotland arrested former Scottish First Minister Sturgeon in an investigation into SNP finances but she was later released without charge pending further investigation, according to FT.
• Acea estimates that EU-based auto names could pay as much as EUR 4.3bln in tariffs and lose sales between 2024-27, meaning 500k less vehicles would be made, if the EU does not agree to postpone the imposition of EU-UK tariffs, via FT.
• Fitch affirmed Greece at BB+; Outlook Stable.

NOTABLE US HEADLINES

• Chinese Foreign Ministry on US Secretary of State Blinken visiting China, says they have no information on Blinken's visit at the moment.
• US President Biden's Administration is said to allow top chip makers in South Korea and Taiwan to maintain and expand their existing Chinese chip-making operations in China, according to WSJ citing recent comments from a Senior Commerce Department official; exemptions were due to expire in October, will reportedly be renewed for the foreseeable future.
• Interstate 95 which is the main north-south Interstate Highway for the East Coast of the US partially collapsed in Philadelphia after a tanker caught fire underneath the highway, while the US Transportation Secretary said the I95 closure will have a significant impact until the recovery is complete. There were also comments from the Pennsylvania Governor that they plan to announce a disaster declaration and that it will take some number of months to complete the rebuild of I95 roadway following the collapse.
• German Finance Minister Lindner ruled out extra funds for the Intel (INTC) chip plant, according to FT.

GEOPOLITICS

• Ukraine said its troops recaptured three villages from Russian forces in the southeast of the country which were the first results of its counteroffensive. In relevant news, Russia said Ukraine made an unsuccessful attempt to attack a vessel which was protecting gas pipelines in the Black Sea, while it was also reported that 3 people were killed and 10 wounded by Russian shelling of an evacuation boat in the flooded Kherson region.
• Ukraine and Russia announced a return of prisoners following negotiations in which 94 Russian soldiers and 95 Ukrainian soldiers were freed and returned, according to Reuters and TASS.
• Russian Kremlin spokesperson Peskov said there were no arrangements and no preconditions for talks with the Kyiv regime and that Russia sees Kyiv’s unwillingness to engage in dialogue, according to RIA.
• Head of Russia’s Wagner Group Prigozhin said Wagner fighters will not sign any contract with Russia’s Defence Ministry amid an attempt by the Russian Defence Minister to take control of its ranks, according to Daily Mail.
• Canadian PM Trudeau announced CAD 500mln in new funding for military assistance for Ukraine and said Canada will be part of a multinational effort to train Ukrainian fighter pilots, while he added that Canada is seizing Russian-owned Antonov cargo aircraft and starting the process of forfeiting the aircraft to Ukraine, according to Reuters.
• German Chancellor Scholz said he plans to talk to Russian President Putin soon and urge him to withdraw troops from Ukraine, according to Reuters.
• North Korean Leader Kim vowed stronger strategic ties with Russia in a congratulatory message to Russian President Putin for National Day, according to Yonhap.
• Iranian Supreme Leader Khamenei said Tehran should continue working with the UN nuclear watchdog under the framework of safeguards and that reaching an agreement with the West is fine but the country’s nuclear industry should be respected. Iran’s Supreme Leader also commented that talks about Iran’s nuclear weapons are a lie and they do not want nuclear arms based on religious beliefs, while he added that the West could not stop Iran from building nuclear arms if it chose to, according to state media.
• French President Macron expressed concerns about the current trajectory of the Iranian nuclear programme to Iranian President Raisi during a phone call on Saturday and warned about the consequences of drone deliveries to Russia, according to Reuters.
• Taiwanese Ministry of Defense said they sent planes and warships and used ground-based missile systems to monitor the activity of the Chinese military, according to Al Arabiya

APAC TRADE

• APAC stocks traded mixed with the region mostly cautious at the start of a risk-packed week as markets await the upcoming key events including major central bank meetings and data releases, while Australian markets were shut in observance of the King’s Birthday holiday.
• Nikkei 225 initially outperformed and tested the 32,500 level amid expectations for the BoJ to maintain ultra-easy policy settings later this week and after PPI data was softer-than-expected and showed wholesale inflation eased for a 5th consecutive month which further supports the case for the BoJ to refrain from policy tweaks.
• Hang Seng and Shanghai Comp. were subdued amid weakness in healthcare and the property sector, with the latter pressured by a warning from Goldman Sachs. However, losses were stemmed amid some expectations for potential PBoC rate cuts to support the economy as more banks reduced their deposit rates and following comments last week from PBoC Governor Yi that there is plenty of room for policy adjustment and that they will continue targeted and forceful monetary policy.

NOTABLE ASIA-PAC HEADLINES

• White House confirmed that China has had a spy base in Cuba since at least 2019, according to AP.
• China’s Foreign Ministry issued a complaint to South Korea over recent criticism of its envoy and hopes that South Korea deeply reflects on problems in Sino-South Korea relations, according to state media.
• Several Chinese lenders cut yuan deposit rates from Monday which follows similar action by China's largest banks on Friday due to recent calls from Beijing to support the economy.
• Goldman Sachs warned that property weakness will likely be a multi-year growth drag on China's economy and it expects an L-shaped recovery in China's property market, according to Bloomberg.
• New Zealand PM Hipkins said he will lead a trade delegation during a China visit at the end of June.

DATA RECAP

• Japanese Corporate Goods Price MM (May) -0.7% (Prev. 0.2%, Rev. 0.3%); YY (May) 5.1% (Prev. 5.8%, Rev. 5.9%)