- US stocks were firmer to start the week with gains led by outperformance in the large-cap sectors of Consumer Discretionary and Technology in which the latter was buoyed by strength in Micron (MU) (+4.5%) after BofA and Susquehanna raised PTs for the stock ahead of earnings next week, while there was no specific headline driving the upside in stocks which also shrugged off higher yields ahead of a deluge of incoming Fed commentary.
- USD ultimately softened as risk sentiment improved albeit with the DXY kept within a thin range ahead of a plethora of Fed speakers.
- Looking ahead, highlights include Singapore Non-Oil Exports, RBA Rate Decision & Press Conference, Comments from RBA Governor Bullock, RBA Assistant Governor Ellis, BoJ Governor Ueda & Fed's Cook.
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LOOKING AHEAD
- Highlights include Singapore Non-Oil Exports, RBA Rate Decision & Press Conference, Comments from RBA Governor Bullock, RBA Assistant Governor Ellis, BoJ Governor Ueda & Fed's Cook.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks were firmer to start the week with gains led by outperformance in the large-cap sectors of Consumer Discretionary and Technology in which the latter was buoyed by strength in Micron (MU) (+4.5%) after BofA and Susquehanna raised PTs for the stock ahead of earnings next week, while there was no specific headline driving the upside in stocks which also shrugged off higher yields ahead of a deluge of incoming Fed commentary.
- SPX +0.77% at 5,473, NDX +1.24% at 19,903, DJIA +0.49% at 38,778, RUT +0.79% at 2,022.
- Click here for a detailed summary.
NOTABLE HEADLINES
- Fed Chair Powell is to give a semi-annual monetary policy testimony at the Senate Banking Committee on July 9th.
- Fed's Harker (non-voter) said if his economic forecast plays out, he thinks one rate cut would be appropriate by year-end but added that two cuts or none are also quite possible and it depends on data. Furthermore, Harker said that more data is essential to come to a decision on rate cuts given the choppiness so far this year and noted the latest inflation data is quite promising, but falls short of the confidence needed and has not quite dissipated uncertainty.
- WSJ's Timiraos posted on X that with PPI and import price data in hand for May, the inflation modellers who map the CPI/PPI into the PCE now expect the core PCE index rose around 0.08%-0.13% in May which would translate to a 2.6% year-on-year core PCE inflation rate and is down from 2.8% in April. Furthermore, he said this would hold the 6-month annualised core PCE rate around 3.2% (or 3.3%) in May and the 3-month annualised rate would drop back below 3% for the first time since January.
DATA RECAP
- US NY Fed Manufacturing (Jun) -6.0 vs. Exp. -9.0 (Prev. -15.6)
FX
- USD ultimately softened as risk sentiment improved albeit with the DXY kept within a thin range ahead of a plethora of Fed speakers.
- EUR gained as fresh headlines regarding the upcoming France's snap election or commentary regarding its financial consequences took a pause, while data releases also showed firmer-than-previous Eurozone Labour Costs and Wages.
- GBP marginally strengthened and just about reclaimed the 1.2700 status but with upside capped amid light pertinent catalysts and ahead of Thursday's BoE decision.
- JPY gradually weakened which saw USD/JPY approach just shy of the 158.00 handle where it then met some resistance and pared some of its gains.
FIXED INCOME
- T-notes began the week on the backfoot after last week's strength amid consolidation ahead of Fed speak.
COMMODITIES
- Oil prices were firmer to start the week and buoyed by the softer Dollar after initial geopolitical tailwinds.
- Ecuador's private OCP oil pipeline suspended operations and declared a force majeure amid intense rains.
GEOPOLITICAL
MIDDLE EAST
- Israeli PM Netanyahu informed the government of the dissolution of the war council, according to Sky News Arabia.
- US-UK forces launched strikes on Yemen's Hodeidah and Kamaran Island, according to Al Masirah TV.
OTHER
- NATO Secretary General Stoltenberg said allies need to impose a cost on China if it does not change course on support for Russia.
- Russia's Kremlin commented that this is an escalation of tension regarding reports that NATO is in talks to deploy more nuclear weapons.
- Russian President Putin will visit North Korea from June 18th-19th, according to TASS. It was also reported that Russia and North Korea may sign a partnership agreement during Russian President Putin's visit, according to RIA.
- US condemned escalatory and irresponsible actions by China in the South China Sea on Sunday and reaffirmed support for the Philippines in a statement.
- Philippines Defence Ministry said China's actions are the true obstacles to peace and stability in the South China Sea.
ASIA-PAC
NOTABLE HEADLINES
- China's Commerce Ministry is conducting an anti-dumping investigation on pork and its by-products imported from the EU, while the investigation should end within 12 months and could be extended by another 6 months under special conditions.
- BoJ Governor Ueda said service prices continue to rise moderately reflecting wage rises, while he added they will scrutinise FX moves and impact on import prices.
- Japanese PM Kishida said the government and the BoJ share the view that consumption lacks strength as wage growth fails to catch up to the pace of inflation, while he added the government has no plan to instruct and request GPIF to buy BoJ's ETF holdings.
- India's government is reportedly considering personal tax reductions to bolster consumption and measures could be announced in July, according to Reuters citing sources.
EU/UK
NOTABLE HEADLINES
- ECB's Lagarde said the ECB is attentive to the proper functioning of markets and will continue to be.
- EU officials said the French vote puts Europe's defence push at risk and French President Macron is seen as weakened by the European election defeat, while joint EU defence spending and Macron's Ukraine plans are seen at risk, according to Bloomberg.
DATA RECAP
- EU Wages In Euro Zone (Q1) 5.3% (Prev. 3.1%, Rev. 3.2%)
- EU Labour Costs YY (Q1) 5.1% (Prev. 3.4%)
