• European bourses & US futures are mixed flat with updates limited in quiet newsflow
• DXY continues to pullback below 104.00 with G10s firmer across the board and activity-FX outperforming
• Core benchmarks continue to pullback but are off session lows with USTs contained pre-IJC & refunding
• Commodities are similarly contained, with crude and key metals in thin ranges and following the wider risk tone
• Looking ahead, highlights include US IJC, SNB's Jordan & BoC's Beaudry.

EUROPEAN TRADE

EQUITIES

• European bourses are mixed/flat with newsflow limited and the region alongside broader assets largely struggling for direction into a sparse docket.
• Sectors are mixed overall; Basic Resources outperform as metals lift slightly and on a Rio Tinto upgrade while Tech and Healthcare names lag.
• Stateside, futures paint a similar picture but feature incremental underperformance in the NQ and outperformance in RTY which continues its recent strength amid a rotation into small caps.
• Tesla (TSLA) is asking several Chinese supply chain companies to build factories in Mexico to replicate a Giga Shanghai and its supply chain system there, according to a report cited by CnEVPost.
• Meta (META) voluntary child protection appears not to work, according to EU's Bretton via a Reuters exclusive; calls on CEO to explain and take immediate action.
• Click here and here for a recap of the main European updates.
• Click here for more detail.

FX

• Dollar drifts ahead of US jobless claims, as DXY fades above 104.000 within 104.070-103.810 range.
• Aussie and Kiwi derive most from the latest Buck downturn, with AUD/USD and NZD/USD elevated above 0.6650 and around 0.6050 respectively.
• Loonie straddles 1.3350 vs Greenback post-BoC hike and pre-commentary from Beaudry before Canadian jobs on Friday.
• Euro and Yen firmer against Dollar around 1.0700 and 140.00 handles, but wary of very large option expiries nearby.
• Lira continues to collapse with no respite insight this side of 23.5000 vs Dollar.
• PBoC set USD/CNY mid-point at 7.1280 vs exp. 7.1282 (prev. 7.1196)
• PBoC Vice Governor said they have confidence, conditions and the capacity to maintain stable operations of the FX market, while the FX market, yuan market expectations and cross-border capital flows are relatively stable. Furthermore, the official stated as the Fed nears the end of its rate hike cycle, USD strength is hardly sustainable and the external impact on the yuan is expected to weaken, according to Reuters.
• Click here for notable OpEx for the NY Cut.
• Click here for more detail.

FIXED INCOME

• Debt still waning and after hawkish Central Bank turns, Bunds regained some poise after dipping below 133.00, but bounce curtailed bang on 133.50.
• Gilts lag within 95.94-61 range and T-note mostly sub-par between 113-07+/112-30 bounds pre-US jobless claims and Quarterly Refunding announcement.
• Orders for the new 4yr BTP Valore retail bond reach EUR 15bln since the commencement of the offer.
• Click here for more detail.

COMMODITIES

• Crude benchmarks have spent the morning choppy but within particularly narrow parameters of sub-USD 1.00/bbl with specific newsflow exceptionally light and markets generally quiet ahead of US IJC during Fed blackout.
• Specifically, WTI and Brent are holding at the lower end of USD 72.07-72.88/bbl and USD 76.44-77.29/bbl parameters which themselves are well within the ranges of yesterday and by extension the more pronounced movement of last week.
• Spot gold is firmer but remains capped by the USD 1950/oz level with the 10-DMA just above at USD 1954/oz. To the downside, the sessions trough dipped just below the 100-DMA at USD 1940/oz; the current low is USD 1939/oz.
• Base metals are more of the same, with the main benchmarks rangebound and around familiar levels and following suit to the broader risk tone.
• Click here for more detail.

CRYPTO

• Bitcoin is essentially unchanged, in very narrow parameters and moving in-situ with broader asset classes in very quiet newsflow.
• G20 emerging nations are reportedly concerned that widespread use of stablecoins could threaten their monetary policy and as such are after stricter regulation, via CoinDesk citing officials.

NOTABLE EUROPEAN HEADLINES

• UK wage growth accelerated in the UK last month despite the cooling labour market in which the median wage cited in UK job adverts rose by 7.2% Y/Y, according to a report in FT citing a cross-country wage tracker published by Indeed.

DATA RECAP

• UK RICS Housing Survey (May) -30 vs. Exp. -38 (Prev. -39.0)
• EU GDP Revised QQ (Q1) -0.1% vs. Exp. 0.0% (Prev. 0.1%); YY (Q1) 1.0% vs. Exp. 1.2% (Prev. 1.3%)

NOTABLE US HEADLINES

• US President Biden vetoed the lawmaker resolution against his student loan plan, according to Reuters.
• US federal prosecutors notified former President Trump that he is a target of a special counsel investigation over classified documents, according to ABC citing sources.
• Click here for the US Early Morning Note.

GEOPOLITICS

• Taiwan Defence Ministry said 37 Chinese aircraft entered Taiwan's air defence zone starting Thursday morning and some of the aircraft flew into the western Pacific, while Taiwan sent an aircraft to keep watch, according to Reuters.
• IAEA's Gross intends to rotate inspectors at the Zaporizhzhia nuclear plant next week, plans need to be agreed with Ukraine and Russia.

APAC TRADE

• APAC stocks were mostly subdued following the mixed handover from Wall St where tech underperformed as global yields climbed after the surprise BoC rate hike.
• ASX 200 traded rangebound as gains in the commodity-related sectors were offset by underperformance in property and tech, while softer trade data from Australia added to the non-committal mood.
• Nikkei 225 was initially choppy but eventually retreated firmly beneath the 32,000 level despite the stronger-than-expected upward revisions to Japan's Q1 GDP.
• Hang Seng and Shanghai Comp. were lacklustre amid the ongoing growth concerns surrounding the world’s second-largest economy although the losses stemmed after China's Big 4 banks reduced their deposit rates following calls from the government to help bolster the economy.

NOTABLE ASIA-PAC HEADLINES

• China National Financial Regulation Administration head Li said they will continue to support Shanghai as a financial centre and that China's economy is continuing its recovery, while the domestic economy is showing resilience and dynamism. Li added that they will step up support for high-tech sectors and comprehensively improve financial regulation, as well as improve private firms' financing environment, according to Reuters.
• China securities regulator chairman said they will support technology innovation in a more precise and effective manner, while they will further promote long-term capital to invest in equities and promote product innovation to support bond, equity and M&A financing, according to Reuters.
• RBI kept the key Repo Rate unchanged at 6.50%, as expected, with the decision on rates made unanimously and it also maintained the policy stance of remaining focused on the withdrawal of accommodation through a 5-1 vote. RBI Governor Das said the path ahead is now somewhat clearer and uncertainty on the horizon is comparatively less, while he added the MPC will remain vigilant on the evolving situation and growth outlook. Das also said they will take further action promptly and headline inflation is still above target and that being within the tolerance band is not enough.

DATA RECAP

• Japanese GDP QQ (Q1 F) 0.7% vs. Exp. 0.5% (Prev. 0.4%); Annualised (Q1 F) 2.7% vs. Exp. 1.9% (Prev. 1.6%)
• Australian Trade Balance (AUD) (Apr) 11.2B vs. Exp. 14.0B (Prev. 15.3B)
• Australian Exports MM (Apr) -5.0% (Prev. 4.0%); Imports MM (Apr) 2.0% (Prev. 2.0%)