- APAC stocks were mixed as the region only partially sustained the positive mood seen in the US where the S&P 500 and Nasdaq 100 extended on record highs.
- European equity futures indicate a lower open with Euro Stoxx 50 future -0.2% after the cash market closed down by 0.2% on Monday.
- DXY lingers around the 105 mark, USD/JPY eyes 161 to the upside with FX markets broadly contained.
- Hamas said Israel's PM Netanyahu is placing hurdles in front of ceasefire negotiations.
- Looking ahead, highlights include NFIB Business Optimism Index, BoJ Meeting with Bond Market Participants, Comments from ECB's Cipollone, Fed’s Powell, Barr & Bowman, Supply from Netherlands & US.
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US TRADE
EQUITIES
- US stocks finished relatively flat in which most major indices eked marginal gains in what was an uneventful session amid a lack of major catalysts and with participants awaiting this week's key risk events including Fed Chair Powell's testimony in the Senate on Tuesday and the House on Wednesday, followed by US CPI on Thursday.
- SPX +0.10% at 5,572, NDX +0.23% at 20,439, DJI -0.08% at 39,344, RUT +0.59% at 2,038.
- Click here for a detailed summary.
NOTABLE HEADLINES
- US Presidential Candidate Trump's VP announcement will occur by next Monday, according to ABC.
APAC TRADE
EQUITIES
- APAC stocks were mixed as the region only partially sustained the positive mood seen in the US where the S&P 500 and Nasdaq 100 extended on record highs, but with upside limited amid a lack of major catalysts ahead of upcoming risk events.
- ASX 200 traded higher as tech, telecoms and real estate stocks benefitted from slightly softer yields.
- Nikkei 225 extended on its all-time highs with the advances led by electronic and tech-related stocks.
- Hang Seng and Shanghai Comp. were subdued as the former continued its recent downward momentum to its lowest in more than two months, while sentiment in the mainland was clouded amid lingering trade frictions and ongoing debt-related concerns.
- US equity futures (ES +0.2%) edged slightly higher albeit with trade contained ahead of Fed Chair Powell's testimony.
- European equity futures indicate a lower open with Euro Stoxx 50 future -0.2% after the cash market closed down by 0.2% on Monday.
FX
- DXY eked slight gains and reclaimed the 105.00 level but with upside capped ahead of Powell's testimony.
- EUR/USD lacked decisiveness following its recent choppy performance and current political uncertainty in France.
- GBP/USD traded little changed around the 1.2800 focal point after yesterday's intraday pullback.
- USD/JPY briefly returned to the 161.00 territory amid mild pressure in haven currencies.
- Antipodeans were choppy after weak Consumer Sentiment and mixed Business Surveys from Australia, while NZD/USD was also lacklustre as participants awaited tomorrow's RBNZ policy announcement.
- PBoC set USD/CNY mid-point at 7.1310 vs exp. 7.2676 (prev. 7.1286).
FIXED INCOME
- 10-year UST futures lacked demand with price action contained ahead of Powell's testimony and US supply.
- Bund futures took a breather after the prior day's mild advances and the recent return to above the 131.00 level.
- 10-year JGB futures were contained amid a lack of fresh catalysts and as the BoJ begins its 2-day meeting with bond market participants, while firmer demand at the 5-year JGB auction provided only brief support.
COMMODITIES
- Crude futures languished around the prior day's lows amid mixed geopolitical headlines and with attention also on Beryl which disrupted ports and facilities in Texas but has since weakened to a tropical depression.
- Port of Houston said terminal operations will continue to be suspended as they prepare the terminal to resume operations, while it later announced that all terminals will remain closed on Tuesday.
- Marathon's (MPC) Galveston Bay, Texas refinery (535k BPD) reported emissions and that the recent hurricane caused a power loss and multiple units to shut down, while it brought the plant to a safe state waiting for power before resuming operations. However, it was later reported that the refinery was preparing multiple units for a restart, according to Reuters sources.
- Shell (SHEL LN) said it will start the process of redeploying personnel to Perdido and Whale assets beginning on Tuesday.
- NHC said further weakening is forecast for Beryl which was expected to become a tropical depression overnight and a post-tropical cyclone on Tuesday, while NHC later confirmed that Beryl had become a tropical depression.
- Spot gold nurses some losses after bouncing off support near USD 2050/oz but with the recovery limited by a steady dollar.
- Copper futures were rangebound amid the mixed risk tone and lack of pertinent catalysts.
CRYPTO
- Bitcoin found some reprieve from recent selling pressure and returned to above the USD 57,000 level.
- CNBC reported that spot ether ETFs are coming and that the SEC ruling could be made maybe as soon as this week or next.
NOTABLE ASIA-PAC HEADLINES
- China's exports of auto products to Belt and Road partner countries for January-May rose 13.3% Y/Y to USD 51.32bln, according to Global Times.
DATA RECAP
- Australian NAB Business Confidence (Jun) 4.0 (Prev. -3.0)
- Australian NAB Business Conditions (Jun) 4.0 (Prev. 6.0)
- Australian Consumer Confidence Index (Jul) 82.7 (Prev. 83.6)
- Australian Consumer Sentiment MM (Jul) -1.1% (Prev. 1.7%)
GEOPOLITICAL
MIDDLE EAST
- Violent explosions were reported amid Israeli raids in the city of Latakia, north-western Syria, according to Al Arabiya. It was also reported that Israel launched an air attack targeting the vicinity of Baniyas, according to Syrian state news
- Palestinian media reported that Israeli shelling on a UNRWA school in the new camp in Nuseirat caused casualties.
- Yemen's Houthis said they carried out a joint-military operation with the Iraqi Islamic resistance targeting Israel's Eilat with drones.
- Hamas Chief said Israeli military escalation could return negotiations back to square zero and he holds Israeli PM Netanyahu responsible, according to Reuters citing a statement.
- Senior Hamas official told Axios that Hamas believes that in the wake of the new Israeli evacuation order in the western neighbourhoods of Gaza City, "negotiations cannot succeed in light of these moves".
- Hamas said Israel's PM Netanyahu is placing hurdles in front of ceasefire negotiations and it called on meditators to interfere against the 'maneuvers and crimes' of Israeli PM Netanyahu.
- White House said gaps remain between the sides on the Israeli ceasefire and hostage release deal.
- US Assistant Secretary of State for Near Eastern Affairs Barbara A. Leaf is on travel July 8th-14th to the United Arab Emirates, Qatar, Egypt, Jordan, Israel, the West Bank, and Italy.
OTHER
- US President Biden said Russian missile strikes on Kyiv that damaged a children's hospital are a horrific reminder of Russia’s brutality, while he added the US will announce together with allies new measures to strengthen Ukraine’s air defences, according to Reuters.
- Ukrainian drone attack caused a fire at an oil depot and power substation in Russia's Volgograd region, according to the regional governor. It was separately reported that a power plant in Russia's Rostov region caught on fire after Ukraine launched tens of drones.
- China Qingdao Maritime Safety Administration issued a navigation warning for military exercises to be conducted in some waters of the Yellow Sea from 08:00 local time on July 9th to 08:00 on July 13th with entry prohibited.
- Elite North Korean military trainees were reportedly visiting Russia amid deepening ties.
EU/UK
NOTABLE HEADLINES
- Barclays said UK June Consumer Spending fell 0.6% Y/Y which was the first decline since February 2021.
DATA RECAP
- UK BRC Retail Sales YY (Jun) -0.5% (Prev. 0.4%)
- UK BRC Total Sales YY (Jun) -0.2% (Prev. 0.7%)
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