- US stocks finished relatively flat in which most major indices eked marginal gains on what was a rather 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 the latest US CPI data on Thursday.
- USD was ultimately flat and the DXY just about reclaimed the 105.00 level with price action kept within a tight range in the absence of Fed speakers and tier-1 data, while the NY Fed Survey of Consumer Expectations showed that consumers 1yr ahead inflation expectations eased to 3.0% from 3.2% in April, although the 3yr ahead ticked up to 2.9% from 2.8% and the 5yr ahead eased to 2.8% from 3.0%.
- Looking ahead, highlights include Australian Westpac Consumer Sentiment & NAB Business Confidence, Supply from Australia & Japan.
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LOOKING AHEAD
- Highlights include Australian Westpac Consumer Sentiment & NAB Business Confidence, Supply from Australia & Japan.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks finished relatively flat in which most major indices eked marginal gains on what was a rather 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 the latest US CPI data 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 President Biden told members of congress he is "firmly committed" to staying in the presidential election race and that he has had extensive conversations with democratic party leaders and elected officials. Furthermore, Biden said he is not blind to people's concerns and that he would not be running if he did not believe he was the best person to beat Trump.
- A group of US Senate Democrats who wished to meet to discuss President Biden's candidacy are no longer expected to meet as the Warner-led group decided against the meeting once the planning of it leaked over the weekend, according to Punchbowl citing sources.
- US Presidential Candidate Trump's VP announcement will reportedly come by next Monday, according to ABC.
DATA RECAP
- NY Fed SCE (Jun) 1yr ahead inflation expectations 3.0% (prev. 3.2% M/M), 3yr at 2.9% (prev. 2.8%), 5yr at 2.8% (prev. 3.0%)
FX
- USD was ultimately flat and just about reclaimed the 105.00 level with price action kept within a tight range in the absence of Fed speakers and tier-1 data, while the NY Fed Survey of Consumer Expectations showed that consumers 1yr ahead inflation expectations eased to 3.0% from 3.2% in April, although the 3yr ahead ticked up to 2.9% from 2.8% and the 5yr ahead eased to 2.8% from 3.0%.
- EUR marginally softened with the single currency contained as participants reflected on the French hung parliament.
- GBP saw two-way price action and eventually returned to flat territory against the dollar around a 1.2800 focal point.
- JPY was choppy which saw USD/JPY trade on both sides of the 161.00 level, while the BoJ is set to conduct a bond meeting to discuss its tapering plans.
FIXED INCOME
- T-notes were little changed and the yield curve flattened as the dust settled from Friday's NFP ahead of Powell, CPI and supply.
CRYPTO
- CNBC reported that spot ether ETFs are coming and that the SEC ruling could be made maybe as soon as this week or next.
COMMODITIES
- Oil prices were lower to start the week amid initial hopes for a ceasefire in Gaza while the attention is also on the impact of Hurricane Beryl with some operations at risk for disruption.
- Kazakhstan is to compensate for oil overproduction in H1 this year until September 2025, according to the energy minister.
- Port of Houston said terminal operations will continue to be suspended for the day and Tuesday morning as they prepare the terminal to resume operations.
GEOPOLITICAL
MIDDLE EAST
- Yedioth Ahronoth reported that one of the most prominent points of contention over the truce deal in Gaza is the demand of Israel the right to respond to any violation by Hamas, according to Sky News Arabia.
- Hamas Chief said Israeli military escalation could return negotiations back to square zero and 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 'maneuvers and crimes' of Israeli PM Netanyahu.
- White House said some gaps remain between the two sides on the Israeli ceasefire and hostage release deal.
- US Envoy McGurk is in Cairo, Egypt and will visit Israel this week to continue hostage and ceasefire discussions, according to Reuters sources.
- Yemen's Houthis said they carried out a joint-military operation with the Iraqi Islamic resistance targeting Israel's Eilat with drones.
OTHER
- Ukrainian President Zelensky arrived in Poland to sign a security agreement with Poland.
- NATO will need 35-50 additional brigades under new plans to defend against Russia, while Germany will need to quadruple air defence capacities under new NATO defence plans, according to sources cited by Reuters.
- Chinese and Belarusian armed forces will conduct joint army training near Brest, Belarus in mid-July, according to Global Times.
ASIA-PAC
NOTABLE HEADLINES
- China’s Commerce Ministry commented regarding media reports suggesting China only recently sought consultations with the EU on EV tariffs, in which it stated that the reports are grossly inconsistent with the facts, while it urged the European side to properly handle economic and trade frictions through dialogue.
- China’s Vice Commerce Minister met with Intel's (INTC) vice president and chief government affairs officer in Beijing, according to MOFCOM.
- OpenAI is cracking down on Chinese companies accessing its tech, according to The Information. It was noted that Microsoft’s (MSFT) Azure JV in China offers access to OpenAI’s products and that Microsoft’s presence in China has come under growing scrutiny from US lawmakers.
- BoJ Osaka branch manager said there are positive and negative views voiced by firms on the impact of a weak JPY and manufacturers are focusing on raising prices for goods overseas as opposed to increasing export volume amid a weakening JPY. Furthermore, it was stated that rising input and labour costs, and labour shortages are weighing on sentiment among some firms, while wage hikes are broadening not just among big firms, but smaller ones and firms are making progress passing on rising import costs, as well as retaining revenue to hike wages.
EU/UK
NOTABLE HEADLINES
- BoE's Haskel said the main message is capacity of the labour market to match workers with available vacancies appears to have deteriorated, while he would rather hold rates until there is more certainty that underlying inflationary pressures have subsided sustainably.
- UK PM Starmer believes they can get a better deal regarding Brexit than the "botched one" that former PM Johnson achieved.
- UK Chancellor Reeves said she will confirm the date of the budget in due course and has ordered an assessment of economic inheritance and will present it to parliament before the summer recess. Reeves said the budget date is to be announced by end-July and it was agreed over the weekend regarding urgent action on the planning framework. Furthermore, she also commented that there is no intention to change the way the BoE treats reserve remunerations.
- ECB's Knot said there is no reason to cut in July and the next truly open meeting is September. Knot said he is comfortable with the disinflation process and market rate cut bets, while the date when the inflation target is met must not slip beyond 2025.
- German government official said Germany will support better cooperation between the UK and the EU, while the official added that UK PM Starmer will visit Berlin this summer.
- French President Macron reportedly decided to keep Attal as PM.
DATA RECAP
- German Trade Balance SA (EUR)(May) 24.9B vs. Exp. 21.1B (Prev. 22.1B)
- German Exports MM SA (May) -3.6% vs. Exp. -1.9% (Prev. 1.6%)
- German Imports MM SA (May) -6.6% vs. Exp. -1.0% (Prev. 2.0%)
- EU Sentix Index (Jul) -7.3 vs. Exp. 0.0 (Prev. 0.3)
