• US stocks finished mixed. Nonetheless, the S&P 500 and Nasdaq 100 snapped their recent losing streaks with outperformance in the latter
• APAC stocks failed to sustain an early positive bias and faltered following the mixed performance stateside
• European equity futures are indicative of a softer open with the Euro Stoxx 50 -0.7% after the cash market closed down 0.4% yesterday
• DXY is firmer and back above 102.50, EUR/USD extended its pullback from 1.10, USD/JPY sits on a 143 handle, antipodeans lag
• Looking ahead, highlights include EU, UK, US PMI (Flash), UK Retail Sales, Speeches from Fed's Bostic, Mester & Bullard, ECB's Lagarde, Panetta, Schnabel & Elderson.

US TRADE

EQUITIES

• US stocks finished mixed as participants digested the slew of global central bank updates and various data releases stateside including Initial Jobless Claims which remained elevated. Nonetheless, the S&P 500 and Nasdaq 100 snapped their recent losing streaks with outperformance in the latter as the tech sector atoned for the prior day's losses, while the majority of sectors were in the red with small caps pressured amid economic headwinds and the higher yield environment.
• SPX +0.37% at 4,381, NDX +1.18% at 15,042, DJIA -0.01% at 33,946, RUT -0.80% at 1,848.
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NOTABLE HEADLINES

• Fed Discount Window borrowing at USD 3.2bln on June 21st (prev. 3.6bln on June 14th), BTFP lending at USD 102.7bln (prev. 102bln), Other Credit at USD 172.3bln (prev. 180.5bln), according to Reuters.
• Fed's Barkin (non-voter) said US inflation is too high despite falling from the peak, while he added that demand is still elevated vs pre-COVID trend which is boosting CPI and he is comfortable with more hikes if inflation is not heading to the goal. Barkin said he would support rate cuts when there is conviction inflation is heading down but added that the Fed is still a good way away from the 2% inflation target and said he will not prejudge the July meeting, according to Reuters.
• US Treasury Secretary Yellen said the odds of a recession have eased but it remains a risk as the Fed tightens policy, while she noted that it is not appropriate to debate the 2% target at this time and consumer spending may need to slow to ease CPI, according to Bloomberg.

APAC TRADE

EQUITIES

• APAC stocks failed to sustain an early positive bias and faltered following the mixed performance stateside where the S&P 500 and Nasdaq snapped their losing streaks although most sectors finished in the red after a busy day of central bank activity including several rate hikes.
• ASX 200 was lower with the declines led by underperformance in energy after the recent slump in oil prices, with the mood not helped by an inverted yield curve and after Australia’s flash manufacturing PMI remained in contraction territory.
• Nikkei 225 gave back its early gains and then some, as participants digested mixed inflation data from Japan which showed a slowdown in headline and core CPI although the latter and core-core readings were still firmer-than-expected, while Japan’s manufacturing PMI also slipped beneath the 50 benchmark level.
• Hang Seng was pressured on return from the Dragon Boat Festival with the index dragged lower by heavy losses in healthcare, tech and property amid headwinds from rising global yields and as Stock Connect trade remained shut due to the holiday in the mainland.
• US equity futures were on the back foot with the ES lower by 0.5% as Asian peers reacted to the various hawkish central bank actions and rhetoric.
• European equity futures are indicative of a softer open with the Euro Stoxx 50 -0.7% after the cash market closed down 0.4% yesterday.

FX

• DXY benefitted from the weakness across global peers and after Fed speakers continued to support the view for further action on rates in which Fed Chair Powell noted the FOMC broadly feels it will be appropriate to hike rates again this year and perhaps two more times, while recent comments from Bowman and Barkin also conformed to the hawkish script.
• EUR/USD extended its pullback from the 1.1000 handle but with the losses stemmed ahead of several ECB speakers.
• GBP/USD remained lacklustre amid ongoing concerns regarding the impact on the UK economy from the tighter BoE policy and rising mortgage rates, while participants also await the latest Retail Sales and PMI data.
• USD/JPY traded rangebound amid mixed CPI data and as it took a breather following its ascent to the 143.00 handle.
• Antipodeans were pressured by the risk-aversion, declines in commodities and further CNH depreciation.
• Mexican Central Bank kept its interest rate at 11.25%, as expected. Banxico said the Board will thoroughly monitor inflationary pressures as well as all factors that have an incidence on the foreseen path for inflation and its expectations, while it estimates that the inflationary outlook will be complicated and uncertain throughout the entire forecast horizon with upward risks. Furthermore, it considers it will be necessary to maintain the reference rate at its current level for an extended period to achieve an orderly and sustained convergence of headline inflation to the 3% target.

FIXED INCOME

• 10yr UST futures attempted to nurse losses but remained near the prior day's lows amid headwinds from the recent central bank action, hawkish Fed commentary and supply announcements.
• Bund futures found some mild reprieve from yesterday’s slump although the rebound was limited by the rising global yield environment.
• 10yr JGB futures were initially lower after the selling in major counterparts but were eventually cushioned by the BoJ’s presence in the market for nearly JPY 1.7tln of JGBs on top of its daily fixed rate operations.

COMMODITIES

• Crude futures extended on declines with pressure from the downbeat mood, firmer dollar and hawkish central bank updates.
• Russia reduced planned oil exports via Transneft by 0.5% in Q3 from Q2 levels to 4.24mln BPD, according to Reuters citing sources.
• Spot gold remained subdued and is set for its worst week in over 4 months owing to a firmer dollar.
• Copper futures were pressured amid the risk-averse mood and the continued absence of the metal's largest buyer.

CRYPTO

• Bitcoin was choppy and oscillated around the USD 30,000 level after this week's rally petered out.

NOTABLE ASIA-PAC HEADLINES

• China lodged an official protest over US President Biden's dictator remark about Chinese President Xi, according to WSJ.
• US President Biden said his comment on Chinese President Xi being a dictator did not undermine or complicate the relationship with China.
• US and India agreed to terminate six outstanding disputes at the WTO and India agreed to remove retaliatory tariffs on certain US products, according to Reuters.

DATA RECAP

• Japanese National CPI YY (May) 3.2% vs. Exp. 3.2% (Prev. 3.5%)
• Japanese National CPI Ex. Fresh Food YY (May) 3.2% vs. Exp. 3.1% (Prev. 3.4%)
• Japanese National CPI Ex. Fresh Food & Energy Y/Y (May) 4.3% vs. Exp. 4.2% (Prev. 4.1%)
• Japanese JibunBK Manufacturing PMI Flash (Jun) 49.8 (Prev. 50.6)
• Japanese JibunBK Services PMI Flash (Jun) 54.2 (Prev. 55.9)
• Australian Judo Bank Manufacturing PMI Flash (Jun) 48.6 (Prev. 48.4)
• Australian Judo Bank Services PMI Flash (Jun) 50.7 (Prev. 52.1)

GEOPOLITICS

• Air raid alerts were in effect throughout Ukraine, according to official military notices cited by Reuters.
• US and South Korea launched a high-level meeting on cyber security and agree to step up cooperation, according to Reuters.

EU/UK

DATA RECAP

• UK GfK Consumer Confidence* (Jun) -24.0 vs. Exp. -26.0 (Prev. -27.0)