• APAC stocks mostly tracked the gains in the US where a rise in initial jobless claims spurred a dovish reaction.
• European equity futures indicate a mildly positive open with Euro Stoxx 50 future +0.2% after the cash market closed higher by 0.3% on Thursday.
• DXY is mildly firmer in what has been a quiet session for FX overnight, antipodeans marginally lag.
• Crude futures mildly extended on gains, Bunds remain afloat after the recent rebound.
• Looking ahead, highlights include UK GDP, Canadian Jobs Data, BoC SLOOS, Chinese Money Supply, Comments from ECB’s Cipollone & Elderson, BoE’s Pill, Fed’s Goolsbee, Bowman, Logan, Kashkari & Barr, Supply from Italy.  

US TRADE

EQUITIES

• US stocks were firmer after a rise in initial jobless claims to the highest level since August 2023 led to a dovish reaction across assets, while the attention was also on the BoE meeting where there were a couple of dovish dissenters and Governor Bailey opened up the door to cuts at coming meetings.
• SPX +0.51% at 5,214, NDX +0.16% at 18,113, DJI +0.85% at 39,388, RUT +0.90% at 2,074.
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NOTABLE HEADLINES

• Fed's Daly (2024 voter) said the last three months have left considerable uncertainty about the next few months of inflation and the Fed is facing a range of scenarios right now. Daly said she is getting different signals from firms who say consumers seem to be getting choosy but input prices are not yet declining, while she added the balance sheet offers no signal about monetary policy.
• US Treasury Secretary Yellen said inflation has come down substantially but is not where it needs to be, according to a Marketplace interview.
• White House is poised to nominate Kristin Johnson to fill a top role at the Treasury overseeing banks, according to Bloomberg citing sources.

APAC TRADE

EQUITIES

• APAC stocks mostly tracked the gains in the US where a rise in initial jobless claims spurred a dovish reaction.
• ASX 200 was led by energy, telecoms and financials but with gains capped amid mixed consumer stocks.
• Nikkei 225 rallied at the open but then slipped from intraday highs with participants reflecting on Household Spending data, US-China and tensions and amid a busy day of earnings releases for Japan.
• Hang Seng & Shanghai Comp traded mixed with Hong Kong stocks surging on reports China is considering a proposal to exempt individual investors from paying dividend taxes on Hong Kong stocks bought via the Stock Connect, while the mainland faded its initial gains with the US reportedly set to impose tariffs on China EVs and key sectors after a review which could be announced as soon as next week.
• US equity futures plateaued overnight after rallying as the jobless claims data stoked rate cut hopes.
• European equity futures indicate a mildly positive open with Euro Stoxx 50 futures +0.2% after the cash market closed higher by 0.3% on Thursday.

FX

• DXY saw mild reprieve after suffering from a jump in Initial Jobless Claims to the highest since August last year.
• EUR/USD slightly eased back from yesterday's peak as the dollar found some composure.
• GBP/USD was rangebound after the pair calmed down from yesterday's post-BoE whipsaw.
• USD/JPY edged higher after Household Spending topped forecasts but showed a steeper-than-previous contraction Y/Y.
• Antipodeans weakened despite the lack of pertinent catalysts and a mostly positive risk environment.
• PBoC set USD/CNY mid-point at 7.1011 vs exp. 7.2102 (prev. 7.1028).
• Banxico left rates on hold at 11.00% as widely expected with the decision unanimous, while it stated that headline and core inflation forecasts were raised for Q224 to Q325 with inflation seen returning to the 3.0% target in Q425.

FIXED INCOME

• 10-year UST futures held on to most of yesterday's spoils owing to jobless claims and a solid US 30-year auction.
• Bund futures remained afloat after rebounding from this week's trough beneath the 131.00 level.
• 10-year JGB futures were lacklustre with demand not helped by the weaker 30-year JGB auction results.

COMMODITIES

• Crude futures mildly extended on gains amid recent dollar softness and geopolitical risks.
• Spot gold continued on its recent data-fuelled advances and climbed above the USD 2350/oz level.
• Copper futures were underpinned with further upside seen as Shanghai commodities trade got underway.

CRYPTO

• Bitcoin was mildly lower and retreated beneath the USD 63,000 level.

NOTABLE ASIA-PAC HEADLINES

• US is set to impose tariffs on China EVs and key sectors after its Section 301 review as early as next week, according to Bloomberg.
• China is unlikely to lift home purchase restrictions completely, according to CCTV.
• China and Hungary were reported to elevate ties to an all-weather comprehensive strategic partnership in the new era, according to Chinese state media.

DATA RECAP

• Japanese All Household Spending MM (Mar) 1.2% vs. Exp. -0.3% (Prev. 1.4%)
• Japanese All Household Spending YY (Mar) -1.2% vs. Exp. -2.4% (Prev. -0.5%)

GEOPOLITICS

MIDDLE EAST

• Israeli PM Netanyahu said they have destroyed 20 of Hamas's 24 battalions so far and hopes he and US President Biden can overcome disagreements, while he added that they have to defeat Hamas in Rafah.
• Israeli officials said the delegation presented to mediators its reservations regarding the Hamas proposal and this round of Gaza truce and hostage-release talks in Cairo has ended, while Israel will press ahead with its operation in Rafah and elsewhere in the Gaza strip as planned.
• Israeli military chief spokesperson said the Israeli military has the munitions it needs for Rafah and other planned operations.
• Israel's army reportedly carried out bombing operations on buildings east of Rafah in the southern Gaza Strip, according to Al Jazeera.
• White House said US President Biden directed his team to continue working with Israel to "inflict an enduring defeat" on Hamas, while the US has not made a final determination on how to move forward with the shipment to Israel that was paused and the US has provided Israel with some alternatives on how to go after Hamas operatives, according to Reuters.
• US State Department said the US continues to engage with Israel about other options in Rafah instead of a major military operation and continues to engage with Israel on amendments to the proposal Hamas submitted. Furthermore, the US continues to work to try to finalise the ceasefire deal text although the effort is "incredibly difficult".
• US State Department said Secretary of State Blinken confirmed to his Egyptian counterpart US President Biden's "clear" position not to support the Rafah operation, according to Al Arabiya.
• White House's Kirby said conversations with Israel on Rafah are ongoing and the US is not walking away from Israel, while it was also reported that CIA Director Burns left the region but talks are ongoing in Cairo.
• US Secretary of State Blinken is expected to submit Israel conduct report to Congress today and is expected to criticise Israel but say it isn't breaking weapons terms, according to Axios.
• Group of 20 US Senators introduced a bill that would restrict funding to the UN or any organisation that gives the Palestinian Authority higher than observer status, according to Asharq News.
• Islamic Resistance in Iraq said it targeted the Leviathan gas platform in occupied Palestine with marches, according to Al Jazeera.

EU/UK

NOTABLE HEADLINES

• BoE's Pill said the Bank is more confident it can start to cut policy restrictions but it is not there yet and needs more confidence in data before moving. Pill said they don't have confidence inflation is subdued but noted "encouraging signs" on inflation and growth, as well as some signs UK economic activity is recovering. Furthermore, Pill said in the absence of big disturbances to the economy, they will be thinking about cutting rates over the next few meetings, while he added that rate decisions will be data dependent and the process of getting inflation down is not yet complete.