- US stocks saw another mixed trading session in a reversal of fortunes for the major indices as the S&P 500 and Nasdaq clawed back Monday's losses with the latter helped as Nvidia (NVDA)(+6.8%) snapped its three-day losing streak, while the Dow and small-cap Russell 2000 reversed the previous day's gains. It was a fairly quiet day as participants awaited the next risk events including Micron (MU) earnings on Wednesday and the eagerly anticipated core PCE numbers on Friday, while mixed data releases and comments from Fed Governors Bowman and Cook did little to alter the dial.
- USD eked marginal gains in rangebound trade with a muted reaction seen to mixed data releases, while the latest Fed commentary also did little to influence price action in which Bowman said they are not yet at the point where it is appropriate to cut rates and reiterated she does not see any rate cuts for this year.
- Looking ahead, highlights include Australian Leading Index & Monthly CPI, Singapore Industrial Production, Comments from RBA Assistant Governor Kent, Supply from Australia.
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LOOKING AHEAD
- Highlights include Australian Leading Index & Monthly CPI, Singapore Industrial Production, Comments from RBA Assistant Governor Kent, Supply from Australia.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks saw another mixed trading session in a reversal of fortunes for the major indices as the S&P 500 and Nasdaq clawed back Monday's losses with the latter helped as Nvidia (NVDA)(+6.8%) snapped its three-day losing streak, while the Dow and small-cap Russell 2000 reversed the previous day's gains. It was a fairly quiet day as participants awaited the next risk events including Micron (MU) earnings on Wednesday and the eagerly anticipated core PCE numbers on Friday, while mixed data releases and comments from Fed Governors Bowman and Cook did little to alter the dial.
- SPX +0.39% at 5,469, NDX +1.16% at 19,701, DJI -0.76% at 39,112, RUT -0.42% at 2,022.
- Click here for a detailed summary.
NOTABLE HEADLINES
- Fed's Bowman (voter) said they are not yet at the point where it is appropriate to cut rates and the baseline outlook continues to be inflation will return to 2% with the policy rate held steady 'for some time'. Bowman said should data show inflation moving sustainably to 2%, it will eventually become appropriate to gradually lower the policy rate and she is willing to raise the target rate at a future meeting if inflation progress stalls or reverses. Furthermore, Bowman said that she does not see any rate cuts for 2024 and has shifted cuts to 2025.
- Fed's Cook (voter) said current policy is 'well positioned' to respond to the economic outlook and at some point, it will be appropriate to cut rates. Cook said monetary policy is restrictive, while she added the timing of any policy adjustment will depend on economic data and its implications for the outlook and balance of risks.
DATA RECAP
- US Consumer Confidence (Jun) 100.4 vs. Exp. 100.0 (Prev. 102.0, Rev. 101.3)
- US CaseShiller 20 YY NSA (Apr) 7.2% vs. Exp. 7.0% (Prev. 7.4%, Rev. 7.5%)
- US Rich Fed Comp. Index (Jun) -10.0 (Prev. 0.0)
- US Rich Fed Mfg Shipments (Jun) -9.0 (Prev. 13.0)
- US Rich Fed, Services Index (Jun) -11.0 (Prev. 3.0)
FX
- USD eked marginal gains in rangebound trade with a muted reaction seen to mixed data releases, while the latest Fed commentary also did little to influence price action in which Bowman said they are not yet at the point where it is appropriate to cut rates and reiterated she does not see any rate cuts for this year.
- EUR mildly softened against the dollar and briefly dipped beneath the 1.0700 handle before paring some of the losses.
- GBP was ultimately flat with price action in GBP/USD choppy and resistance seen around the 1.2700 level.
- JPY marginally softened with USD/JPY keeping a firm footing at the 159.00 territory despite recent jawboning.
- Canadian CPI Inflation MM (May) 0.6% vs. Exp. 0.3% (Prev. 0.5%)
- Canadian CPI Inflation YY (May) 2.9% vs. Exp. 2.6% (Prev. 2.7%)
FIXED INCOME
- T-notes were seemingly hit on hot Canadian headline inflation and heading into this week's supply which kicked off with the 2-year note auction on Tuesday.
COMMODITIES
- Oil prices were lower although trade was kept within tight ranges as a slightly firmer dollar weighed amid light energy-specific newsflow.
- US Private Inventory Data (bbls): Crude +0.9mln (exp. -2.9mln), Distillate -1.2mln (exp. -0.3mln), Gasoline +3.8mln (exp. -1.0mln), Cushing -0.4mln.
- Russian oil and gas revenue is set to rise by more than 50% Y/Y to USD 9.4bln in June, according to Reuters calculations.
- Russian oil loadings from western ports in July are set to decline 23% M/M as refinery runs are expected to rise, according to sources via Reuters. It was also reported that Russia will cut oil exports via western ports to 1.5mln BPD, which is down almost 500k BPD from June, as processing at its refineries is set to rise after maintenance, according to Reuters sources.
GEOPOLITICAL
MIDDLE EAST
- US Defense Secretary Austin said Hezbollah's 'provocations' threaten to drag Israeli and Lebanese people into war.
- US and Israel agreed to reschedule the meeting of the US-Israel strategic consultative group on Iran which was supposed to take place last Thursday but was cancelled by the White House in protest of Netanyahu's accusations video, while officials said they expect the meeting to take place in Washington in mid-July, according to Axios's Barak Ravid.
OTHER
- Russia's Deputy Foreign Minister said their western opponents underestimate Russia's readiness to stand up for itself and this could become tragic and fatal. Furthermore, the official said they can answer the West with both rhetoric and with practical steps, as well as noted there is a significant danger that the West could make a mistake, while Russia will try to avoid making a mistake.
- ICC judges issued arrest warrants for Russian Defence Minister Shoigu and chief of staff Gerasimov.
ASIA-PAC
NOTABLE HEADLINES
- China's Finance Minister said they will implement proactive fiscal policy and enhance the effectiveness of macroeconomic regulation and control, according to Xinhua.
- China's Vice Commerce Minister met with the US dairy export council president on Tuesday, while it was stated that China welcomes companies from all countries including US dairy companies to deepen their footprint in the Chinese market.
- Huawei's struggles suggest US trade restrictions may be working and Huawei last year shocked Biden officials which prompted their recent crackdown on suppliers. Furthermore, it was stated that Huawei’s delays pose a problem for Chinese tech customers ByteDance, Alibaba and Tencent, according to The Information.
- Japanese Finance Minister Suzuki said he shared serious concerns over the weakness of JPY and KRW with the South Korean Finance Minister, while he added they will continue to respond appropriately to excessive FX moves and it is desirable for FX to move stably.
EU/UK
NOTABLE HEADLINES
- European Commission President von der Leyen is to be given another term, according to FAZ.
- Spain's budget minister said the VAT on basic food items will rise to 2% from 0% on September 30th.
