• APAC stocks traded mixed with price action contained amid a lack of major fresh catalysts and in the absence of a lead from Wall St.
• European equity futures indicate a slightly softer cash market open with Euro Stoxx 50 futures down 0.2% after the cash market finished with gains of 1.3% on Monday.
• DXY is back above 99.00 and attempting to claw back yesterday's downside, EUR/USD is back on a 1.13 handle.
• US President Trump is said to be eyeing sanctions against Moscow this week, according to the WSJ.
• Looking ahead, highlights include German GfK, EZ Sentiment, French CPI, US Durable Goods & Consumer Confidence, NBH Policy. Announcement, ECB’s Villeroy & Fed’s Kashkari, Supply from Netherlands, Italy & US.

SNAPSHOT

US TRADE

EQUITIES

• US stock markets were closed for Memorial Day. However, US equity futures saw strength on Monday and were buoyed by the gains out of Europe as sentiment was boosted after President Trump announced a delay to the 50% tariff deadline on EU goods to July 9th. Nonetheless, liquidity was thin and newsflow was very sparse given both US and UK markets were closed due to respective holidays.

TARIFFS/TRADE

• European Trade Commissioner Sefcovic said he had a good call with US Commerce Secretary Lutnick on Monday and that the European Commission remains fully committed to constructive and focused efforts at pace towards an EU-US deal, while he added that they continue to stay in constant contact.
• South Africa offered to import LNG from the US for 10 years as part of the deal proposed to Washington which would include the US investing in gas infrastructure and cooperating on technology and fracking, according to a ministerial statement.

APAC TRADE

EQUITIES

• APAC stocks traded mixed with price action relatively rangebound amid a lack of major fresh catalysts and in the absence of a lead from Wall St owing to Memorial Day.
• ASX 200 edged marginally higher as strength in tech, energy and financials atoned for the underperformance in the mining and resources sectors.
• Nikkei 225 was subdued amid a firmer currency and after BoJ Governor Ueda reiterated the central bank's policy normalisation rhetoric, although the downside was stemmed following a lack of deviation in Services PPI data, which matched the prior reading, and as long-end JGB yields declined.
• Hang Seng and Shanghai Comp were lacklustre with price action in Hong Kong choppy and with the mainland constrained as focus turned to earnings releases and despite a slight acceleration in Chinese Industrial Profits, while a firm PBoC liquidity operation also failed to inspire.
• US equity futures faded some of the prior day's advances in quiet trade after holiday closures on both sides of the pond.
• European equity futures indicate a slightly softer cash market open with Euro Stoxx 50 futures down 0.2% after the cash market finished with gains of 1.3% on Monday.

FX

• DXY sits just above the 99.00 level following the holiday lull owing to the UK and US holiday closures, and in the aftermath of President Trump's tariff deadline delay, while news catalysts for the US remained light and participants await this week's macro highlights stateside including FOMC minutes, the second reading of Q1 GDP and monthly PCE metrics.
• EUR/USD eked marginal gains and attempted to reclaim the 1.1400 status, while European Trade Commissioner Sefcovic recently noted that he had a good call with US Commerce Secretary Lutnick on Monday and stated the European Commission remains fully committed to constructive and focused efforts at pace towards an EU-US deal.
• GBP/USD remained afloat in quiet trade following the prior day's closure of the world's largest FX hub for a bank holiday.
• USD/JPY initially retreated amid a softer dollar and the subdued risk appetite in Japan. There were also comments from BoJ Governor Ueda who stated that to an extent, incoming data allows them to gain more confidence in the baseline scenario and that as economic activity and prices improve, they will adjust the degree of monetary easing as needed to ensure achievement of a sustainable 2% inflation target. Nonetheless, the pair eventually clawed back losses as the dollar rebounded off lows and as long-term JGB yields declined.
• Antipodeans slightly softened after yesterday's gradual declines with demand hampered amid the mixed risk appetite and with a bout of pressure seen in CNH.
• PBoC set USD/CNY mid-point at 7.1876 vs exp. 7.1842 (Prev. 7.1833)

FIXED INCOME

• 10yr UST futures marginally gained following a return to above the 110.00 level and as cash trade reopened from the Memorial Day closure.
• Bund futures remained afloat after the prior day's rebound albeit with further upside capped amid quiet newsflow and as participants awaited German GfK data.
• 10yr JGB futures eked mild gains amid curve flattening with some early notable declines in super-long end Japanese yields, although the upside in 10yr JGB futures was capped as Services PPI matched the prior reading and BoJ Governor Ueda reiterated the central bank's rate hike path. Furthermore, it was later reported that Japan's Ministry of Finance will consider tweaking the composition of its bond issuance plan which could involve trimming the issuance of super-long debt.

COMMODITIES

• Crude futures were rangebound following the holiday lull and ahead of the meeting of eight OPEC+ countries later this week which was brought forward by a day to May 31st.
• The meeting of eight OPEC+ countries was brought forward to May 31st from June 1st, according to Reuters sources.
• Russian Deputy PM Novak said nothing has been discussed yet in response to a question about whether OPEC+ has discussed an oil output increase by another 411k bpd from July, and stated that OPEC+ will discuss the current market conditions and forecast, as well as make some adjustments if needed. Furthermore, Novak said the possible G7/EU tightening of Russia’s oil price cap is not acceptable and stated that price caps have not affected Russia’s oil exports, according to RIA.
• Ecuador's biggest oil refinery experienced a fire and halted operations as a precaution following the fire.
• Petrobras (PBR) CEO said if oil prices drop further, they will cut diesel, gasoline, and jet fuel prices, while he added that fuel prices are at a 'comfortable level' and that gasoline and diesel prices are below parity at the moment.
• Spot gold traded indecisively amid similar price action in the dollar and with early pressure seen as Shanghai commodities trade got underway.
• Copper futures continued its gradual pullback from a three-week peak with demand dampened amid the mixed risk appetite.
• China Steel Association said China is working to control steel capacity to resolve the mismatch between supply and demand.

CRYPTO

• Bitcoin retreated to beneath the USD 109k territory but with losses stemmed in choppy trade and after support held around the USD 108k level.
• Trump Media & Technology (DJT) plans to raise USD 3bln to spend on cryptocurrencies, according to FT.

NOTABLE ASIA-PAC HEADLINES

• Chinese Premier Li said China and Cambodia are to jointly respond to external uncertainties, according to Xinhua.
• China's Mofcom summoned industry associations and automakers such as BYD (1211 HK) and Dongfeng Motor (489 HK) to a meeting on Tuesday afternoon and intends to discuss matters including the emergence of used cars on the market that have never been driven.
• BoJ Governor Ueda said while many of his G7 colleagues looked relieved by the progress made in the fight against inflation, they also acknowledged new challenges such as heightened trade policy uncertainty and dealing with more frequent supply side shocks, while he added they are still grappling in Japan with the challenge of achieving the 2% inflation target in a sustainable manner and are now closer to the inflation target than any time during the last few decades, but are not quite there. Furthermore, he said to an extent, incoming data allows them to gain more confidence in their baseline scenario, and as economic activity and prices improve, they will adjust the degree of monetary easing as needed to ensure achievement of sustainable 2% inflation target.
• Japan Ministry of Finance will consider tweaking the composition of its bond issuance plan that could involve trimming issuance of super long debt, according to sources cited by Reuters.

DATA RECAP

• Chinese Industrial Profits YY (Apr) 3.0% (Prev. 2.6%)
• Chinese Industrial Profits YTD (Apr) 1.4% (Prev. 0.8%)

GEOPOLITICS

MIDDLE EAST

• Israeli PM Netanyahu said on Monday regarding hostage deal negotiations that he hopes they will have news regarding the hostages today or tomorrow.

RUSSIA-UKRAINE

• US President Trump is said to be eyeing sanctions against Moscow this week as he grows frustrated by Russian President Putin’s continued attacks on Ukraine and the slow pace of peace talks, according to people familiar with Trump’s thinking cited by WSJ.
• Western allies of Ukraine, including the UK and US have agreed to lift all range restrictions on weapons in Ukraine, according to The Times.
• Ukrainian President Zelensky said Russian mass attacks are Russian President Putin’s political choice and that Putin is playing with diplomacy, while he added that more pressure and sanctions must be applied on Russia.
• Authorities in Ukraine’s Sumy region said Russian forces captured several villages in the region.

OTHER

• Guangzhou public security authorities said a technology company in China's Guangzhou was attacked by a foreign hacker organisation and the initial investigation found that the cyberattack was by a hacker organisation 'supported by' Taiwan's DPP authorities.

EU/UK

NOTABLE HEADLINES

• UK government will spend a record GBP 3bln to boost training opportunities as part of a broader strategy to train locals to fill gaps in the labour market and reduce reliance on migrant workers.
• UK Chancellor Reeves is "being forced towards" a tax raid of up to GBP 30bln by benefit giveaways and her struggle with increasing borrowing costs, according to The Telegraph, citing the NIESR.
• UK government is shifting to shorter term borrowing to lower its interest bill as a global debt sell-off adds to the pressure on its tax and spending plans, according to FT.

DATA RECAP

• UK BRC Shop Price Index YY (May) -0.1% (Prev. -0.1%)