• APAC stocks mostly traded with cautious gains as participants digested a slew of data releases at quarter-end.
• Chinese Manufacturing PMI matched estimates and Non-Manufacturing PMI was slightly softer-than-expected although remained in a firm expansion.
• European equity futures are indicative of a slightly higher open with the Euro Stoxx 50 +0.1% after the cash market closed up 0.2% yesterday.
• DXY has held on to a bulk of yesterday's gains, EUR/USD remains sub 1.09, USD/JPY is back below 145.
• Looking ahead, highlights include Germany Retail Sales, France CPI (Prelim), EZ CPI (Flash), US PCE, Speeches from Riksbank's Bremen & Thedeen, Supply from Italy.

US TRADE

EQUITIES

• US stocks traded mostly higher amid a cyclical/value bias after the chunky upward revisions to Q1 GDP and decline in weekly initial jobless claims, although the Nasdaq 100 underperformed as the strong data releases facilitated the upside in yields, pronounced bear-flattening and deeper yield inversion.
• SPX +0.45% at 4,396, NDX -0.16% at 14,939, DJIA +0.80% at 34,122, RUT +1.23% at 1,881.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed Discount Window loans at USD 3.21bln in June 28th week (prev. USD 3.21bln W/W), while BTFP lending was USD 103.1bln (prev. USD 102.7bln W/W) and 'Other credit' was USD 168.3bln (prev. USD 172.3bln W/W).
• Fed's Bostic (non-voter) reiterated that he doesn’t see additional Fed rate hikes as needed and policy is in place to bring inflation back to the 2% target. Bostic added that inflation is in a gradual cooling trend that should continue and he expects the Fed can meet the inflation goal without causing a severe downturn.

APAC TRADE

EQUITIES

• APAC stocks mostly traded with cautious gains amid the higher yield environment and as participants digested a slew of data releases at quarter-end including the latest Chinese official PMIs.
• ASX 200 lacked direction as gains in the commodity-related sectors and utilities offset losses in real estate and tech.
• Nikkei 225 was subdued after mixed data releases including disappointing Industrial Production and softer-than-expected Tokyo CPI although the losses were cushioned as USD/JPY briefly climbed above 145.00.
• Hang Seng and Shanghai Comp were initially choppy but ultimately gained after the latest Chinese PMI data in which headline Manufacturing PMI matched estimates and Non-Manufacturing PMI was slightly softer-than-expected although remained at a firm expansion.
• US equity futures traded rangebound as markets await more data releases including US core PCE prices.
• European equity futures are indicative of a slightly higher open with the Euro Stoxx 50 +0.1% after the cash market closed up 0.2% yesterday.

FX

• DXY held on to most of yesterday’s data-inspired gains after the strong upward GDP revision and fall in jobless claims, while the focus turns to the upcoming releases including the Fed’s preferred inflation gauge.
• EUR/USD languished near this week’s lows after slipping beneath 1.0900.
• GBP/USD marginally rebounded off support at the 1.2600 level ahead of incoming UK GDP data for Q1.
• USD/JPY was ultimately flat overnight after reversing a brief climb above the 145.00 level for the first time since November, which spurred the usual jawboning from Japan’s Finance Minister.
• Antipodeans marginally higher following the firmer-than-expected PBoC reference rate setting and after China’s Manufacturing PMI printed in line with the expectation which was not as bad as some had feared.
• PBoC sets USD/CNY mid-point at 7.2258 vs exp. 7.2525 (prev. 7.2208)
• Brazil's Finance Minister said the National Monetary Council decided to set the 2026 inflation target at 3%, while the government expects rates to fall from August, according to Reuters.

FIXED INCOME

• 10yr UST futures were stuck near their lowest levels in almost four months after the recent strong US data spurred pronounced bear-flattening and deeper yield inversion.
• Bund futures remained lacklustre after yesterday’s slump and with EZ inflation data scheduled later.
• 10yr JGB futures edged lower on spillover selling from global peers and despite the BoJ’s presence in the market for nearly JPY 1.4tln of JGBs on top of its daily fixed-rate operations.

COMMODITIES

• Crude futures were rangebound after tailwinds from strong US data were offset by rate hike expectations.
• Spot gold traded sideways with price action restricted as the dollar held on to its data-driven gains.
• Copper futures were underpinned amid the positive risk tone in its largest purchaser and as markets mostly took the latest Chinese PMI data in their strides.

CRYPTO

• Bitcoin traded higher overnight amid the cautious optimism seen across risk assets.
• RBNZ is to ramp up monitoring of stablecoins and crypto assets but noted that regulation of crypto assets is not currently required.

NOTABLE ASIA-PAC HEADLINES

• US is expected to curb exports of some Dutch chip equipment to specific facilities in China, according to a source cited by Reuters.
• China may announce more property market support measures although measures might be incremental, while China is expected to revise certain home purchase restrictions and has room to lower the down payment ratio, according to China Securities Journal.

DATA RECAP

• Chinese NBS Manufacturing PMI (Jun) 49.0 vs. Exp. 49.0 (Prev. 48.8)
• Chinese NBS Non-Manufacturing PMI (Jun) 53.2 vs. Exp. 53.3 (Prev. 54.5)
• Chinese Composite PMI (Jun) 52.3 (Prev. 52.9)
• Japanese Industrial Production MM (May P) -1.6% vs. Exp. -1.0% (Prev. 0.7%)
• Japanese Industrial Production YY (May P) 4.7% vs. Exp. 4.4% (Prev. -0.7%)
• Tokyo CPI YY (Jun) 3.1% vs. Exp. 3.8% (Prev. 3.2%)
• Tokyo CPI Ex. Fresh Food YY (Jun) 3.2% vs. Exp. 3.3% (Prev. 3.2%)
• Tokyo CPI Ex. Fresh Food & Energy YY (Jun) 3.8% vs. Exp. 4.0% (Prev. 3.9%

GEOPOLITICS

• US is close to approving long-range ATACMS missiles to help Ukraine’s fight, according to WSJ.
• US Department of Defense said the Chinese spy balloon that was brought down earlier this year did not collect information over the US, while it is not aware of any imminent decisions regarding the possible provision of ATACM long-range missiles to Ukraine.
• US State Department approved the potential sale of logistics supply support to Taiwan for an estimated cost of USD 108mln, while it approved the possible sale of 30mm ammunition and related equipment to Taiwan for an estimated USD 332mln, according to Reuters.

EU/UK

NOTABLE HEADLINES

• BoE's Tenreyro said her vote to leave the bank rate unchanged rested on what the latest data implied about the medium term and stated that forward-looking indicators had pointed towards falls in both pay growth and core-goods inflation over the rest of the year. Tenreyro also said they have seen very little pass through so far of UK policy tightening and the more the BoE hikes now, the sooner and faster it will later need to cut rates.