• APAC stocks traded higher following the gains on Wall St where the major indices were lifted alongside a weaker dollar and softer yields.
• The BoJ refrained from any hawkish surprises and maintained its ultra-easy policy settings.
• European equity futures are indicative of a slightly higher open with the Euro Stoxx 50 +0.1% after the cash market closed down 0.3% yesterday.
• DXY is contained following yesterday's heavy losses, JPY is the laggard across the majors post-BoJ.
• Looking ahead, highlights include EZ CPI (Final), US Uni. of Michigan Sentiment Preliminary, ECB Repayment Publication, Speeches from Fed’s Waller, Barkin & Bullard, ECB’s Lagarde & de Guindos.

US TRADE

EQUITIES

• US stocks gained with a risk on mood seen from the open ahead of quad witching on Friday amid a softer dollar and lower yield environment as participants digested several data releases including US jobless claims which remained elevated and above expectations, while retail sales were strong on the headline although the core reading was in line with expectations. Conversely, the mood in Europe was less constructive after the ECB hiked rates by 25bps, provided hawkish staff forecasts and signalled another hike next month.
• SPX +1.22% at 4,425, NDX +1.20% at 15,185, DJIA +1.26% at 34,408, RUT +0.81% at 1,889.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed Discount Window borrowing at USD 3.6bln on June 14th vs USD 3.1bln on June 7th, 'Other Credit' was at USD 180.5bln vs prev. 185.2bln and BTFP lending at USD 102bln vs prev. 100.2bln.
• Fed's Bostic (non-voter) disclosed new transactions that violated the central bank's trading guidelines in which ETF transactions were conducted during the forbidden blackout period, according to FT.
• Fed and SEC are investigating Goldman Sachs's (GS) role in buying Silicon Valley Bank’s securities portfolio while it was working on its doomed capital raise before its failure, according to WSJ sources.
• WSJ's Timiraos tweeted that "Powell's Freudian "skip" suggests a July rate rise is the base case, even though (as always) the economy can intervene", while he cited comments from Fed watcher Tim Duy that "There is an every-other-meeting strategy, and the July decision has all but been made".

APAC TRADE

EQUITIES

• APAC stocks traded higher following the gains on Wall St where the major indices were lifted alongside a weaker dollar and softer yields as participants digested a hawkish ECB and the rise in US jobless claims.
• ASX 200 was positive with the gains led by early strength in energy and utilities after AGL Energy flagged a jump in FY24 underlying profit and with some households facing electricity tariff increases of up to 51% for the winter season.
• Nikkei 225 initially declined amid cautiousness heading into the BoJ policy decision but then recovered after the BoJ refrained from any hawkish surprises and maintained its ultra-easy policy settings.
• Hang Seng and Shanghai Comp. were underpinned amid anticipation of further support measures from China but with gains capped in the mainland amid lingering frictions with the EU to ban Huawei and ZTE equipment from internal Commission networks and after the US tempered expectations of a breakthrough in relations ahead of US Secretary of State Blinken’s visit to China.
• US equity futures were rangebound overnight and took a break after the prior day's broad advances.
• European equity futures are indicative of a slightly higher open with the Euro Stoxx 50 +0.1% after the cash market closed down 0.3% yesterday.

FX

• DXY was contained following the prior day’s heavy selling pressure which was due to several factors including softer yields following Powell's presser, a hawkish ECB and the slew of data releases including elevated jobless claims and soft import/export prices.
• EUR/USD sat near its highest levels in over a month after the hawkish signals from the ECB although sources suggested a tough debate next month regarding a September rate hike and that several officials favour the expected July hike to be the last in the cycle.
• GBP/USD held onto its recent spoils with a firm footing above 1.2700 after benefitting from the dollar’s demise.
• USD/JPY initially continued its pullback and briefly dipped below 140.00 but then rebounded after the BoJ stood pat.
• Antipodeans were indecisive owing to the lack of pertinent drivers and a sparse data calendar.
• PBoC set USD/CNY mid-point at 7.1289 vs exp. 7.1282 (prev. 7.1489)

FIXED INCOME

• 10yr UST futures pared some of the gains from yesterday’s bull steepening which was spurred after the slew of data releases stateside including the rise in initial jobless claims and with money markets not buying into the Fed’s dot plot peak.
• Bund futures remained subdued in the aftermath of the ECB rate hike and hawkish inflation projections.
• 10yr JGB futures were supported following the BoJ’s decision to maintain its ultra-easy policy settings, while the central bank also announced a second fixed rate operation for the day.

COMMODITIES

• Crude futures were rangebound amid a lack of fresh catalysts to build upon yesterday's dollar and risk-fuelled advances.
• US Deputy Treasury Secretary Adeyemo said there is no immediate proposal to change the USD 60/bbl price cap on Russian oil now and any change by Russia to taxes on oil sales will reduce the capacity of Russia's oil production over time, while he added the US does not see widespread signs of evasion but knows Russia is seeking ways to evade the price cap.
• Russia's Rosneft is close to striking long-term deals with trading firms to sell substantial supplies of oil to end users in China, India, and Turkey, according to WSJ sources.
• Spot gold traded sideways near the prior day's highs after benefitting from recent dollar weakness.
• Copper futures plateaued around their best levels in over a month amid anticipation of China stimulus.

CRYPTO

• Bitcoin oscillated around the USD 25,500 level in rangebound trade after yesterday's risk-driven rebound.

NOTABLE ASIA-PAC HEADLINES

• NDRC said China will accelerate the implementation of policies to increase consumption and that temporary fluctuations in some sectors are normal with China's economic operations maintaining a recovery trend overall. NDRC also stated that China will speed up the process to allow private firms to access the infrastructure of major national scientific research projects, while they will encourage and attract more private firms to participate in national major projects and key industrial supply chain projects.
• White House National Security Adviser Sullivan said they do not expect a breakthrough in US-China relations from Secretary of State Blinken's upcoming trip to China.
• EU's Breton said only ten EU countries have restricted or excluded high-risk 5G vendors and the pace is too slow, while the decision by some countries in the EU to restrict or completely ban Huawei and ZTE (763 HK) are in line with EU guidelines. Breton added it is time for telecom providers to speed up decisions to replace high-risk vendors from their networks and the Commission will avoid exposure to Huawei and ZTE when procuring telecoms services.
• BoJ kept its policy settings unchanged, as expected, with rates at -0.10% and the parameters of QQE with YCC maintained in which the decision on YCC was made through a unanimous vote. BoJ said Japan's economy is picking up and is likely to continue recovering moderately but also noted that uncertainty regarding the economy is very high. Furthermore, it reiterated that core consumer inflation is likely to slow the pace of increase towards the middle of the current fiscal year and that inflation expectations are moving sideways after heightening.

DATA RECAP

• Singapore Non-Oil Exports MM (May) -14.6% vs. Exp. -1.3% (Prev. 2.7%)
• Singapore Non-Oil Exports YY (May) -14.7% vs. Exp. -8.1% (Prev. -9.8%)

GEOPOLITICS

• African leaders could propose "confidence-building measures" in the first stage of engagement with Russia and Ukraine to help end the conflict, according to Reuters citing a draft framework.
• US government agencies were reportedly hit in a global cyberattack, according to CNN. It was separately reported that suspected state-backed Chinese hackers broke into the networks of hundreds of public and private sector organisations globally, in which nearly a third of them were government agencies including foreign ministries, according to SCMP.
• US State Department said it wants Iran to take steps to cease its actions that destabilise the region including steps to curb its nuclear programme. It was separately reported that the US and Iran are in talks aimed at limiting Iran's nuclear programme, releasing some US citizens and unfreezing Iranian assets, while steps would be cast as an understanding and not an agreement subject to Congressional review, according to officials cited by Reuters.

EU/UK

NOTABLE HEADLINES

• ECB policymakers began a debate on "evening out" the interest rate corridor between its three administered rates, while they discarded a move on the corridor this week and see no decision in July, but it is seen gaining relevance later this year, according to Reuters sources.