• Asian equities benefited from the increased risk-appetite after all tspanee major US indices posted record highs following strong data
• FX price action centered around JPY, with USD/JPY and JPY-crosses lifted as the heightened risk appetite spurred outflows from the safe-haven currency
• Looking ahead, highlights include US jobs report, Fed’s Harker and Kaplan

ASIA

Asia stock markets traded mostly higher following the positive lead from US, where all 3 major indices printed fresh record highs amid encouraging data including better than expected ADP jobs figures. This spurred momentum in the ASX 200 (+0.9%) and Nikkei 225 (+1.9%), with the latter also underpinned by a weaker currency to break above 20,000 for the 1st time since 2015. Chinese markets were mixed as the Hang Seng (+0.3%) conformed to the upbeat tone, while the Shanghai Comp. (-0.3%) lagged after a weaker daily liquidity operation and tighter conditions from the recent surges in money market rates. 10yr JGBs were flat with a lack of demand seen amid gains in riskier assets, although downside was stemmed following a firm Rinban announcement in which the BoJ were in the market for JPY 1.13tln in government debt with maturities of 10yr and under.

PBoC injected CNY 30bln in 7-day reverse repos and CNY 20bln in 14-day reverse repos, for a net weekly injection of CNY 30bln vs. Prev. CNY 30bln drain last week. (Newswires)

PBoC set CNY mid-point at 6.8070 (Prev. 6.8090)

EUROPE/UK

Polls aggregator Britain Elects stated that it expected UK Conservatives to get 362 seats vs. Labour at 206 seats if the election was held yesterday. (Newswires) Note, 326 seats are required for an absolute majority.

FX

FX price action centred around JPY, with USD/JPY and JPY-crossed lifted as the heightened risk appetite spurred outflows from the safe-haven currency. The rest of the FX space traded quiet amid a lack of tier-1 data and as participants await the key-risk US Non-Farm Payrolls later, with most majors failing to make any significant recovery from yesterday’s losses against the greenback.

COMMODITIES

Gold (-0.4%) prices were pressured on safe-haven outflows following the record highs in US stocks and strong ADP jobs data. Elsewhere, WTI crude futures languished after it met resistance around USD 49/bbl and slipped into yesterday’s settlement, whilst copper pulled back amid weakness across the commodities complex, in addition to a firmer USD.

US

Strong ADP employment data sent treasuries lower in early trade with large high-grade USD issuance – including a USD 5.2bln 6-part deal from Cardinal Health - also keeping prices trading lower for much of the day. Sep’17 10y T-note futures settled at 126.06, down 3+ ticks.

US President Trump confirmed that the US is to withdraw from the Paris Climate Agreement and will begin negotiations to enter a new accord or re-enter the Paris accord on terms fair to the US. (Newswires)

US President Trump’s administration requested the US Supreme Court to restore the travel ban. (Newswires)

Former FBI-Director Comey is set to testify before the Senate Intelligence Committee on June 8^th. (Newswires)