• European bourses are firmer across the board and largely unphased by numerous ECB speakers
• Stateside, futures post modest gains and await the likes of Fed’s Waller and Barkin as the blackout lifts
• DXY has lifted off-lows with Yen assisting post-BoJ while EUR pivots OpEx and GBP continues to advance
• Fixed income experiences a modest and perhaps technically driven revival alongside notably less explicit Holzmann commentary
• Crude slips slightly while base metals lift on further Chinese stimulus, though copper bucks the trend
• Looking ahead, highlights include US Uni. of Michigan Sentiment Preliminary, ECB Repayment Publication, Speeches from Fed’s Waller, Barkin, ECB’s Lagarde, Villeroy & de Guindos.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer across the board, Euro Stoxx 50 +0.4%, though action has at times been somewhat choppy in the likes of the FTSE 100 +0.3% despite a lack of fresh specific drivers since the Cash Open.
• Note, Goldman Sachs lifted its end-2023 year-end target for the Stoxx 600 to 500 from 475.
• Sectors are primarily in the green with some of the more defensively biased names leading such as Utilities and Healthcare while Basic Resources lags slightly after recent upside.
• Stateside, futures are firmer though only modestly so with newsflow limited thus far as we await a number of Fed speakers lter in the session.
• Click here and here for a recap of the main European updates.
• Click here for more detail.

FX

• Dollar off post-IJC lows with help from the Yen, DXY holds 102.000 handle as USD/JPY bounces from sub-140.00 towards 141.50 YTD peak in response to unchanged BoJ and dovish Governor Ueda press conference.
• Euro pivots 1.0950 vs Buck after hawkish ECB hike and flanked by hefty option expiries.
• Pound extends gains against Greenback to 1.2800+ awaiting BoE next week and unfazed by a decline in UK inflation expectations.
• Yuan continues recovery in hope of even more Chinese stimulus, with USD/CNY and USD/CNH both eyeing 7.1000 from peaks nearer 7.2000.
• PBoC set USD/CNY mid-point at 7.1289 vs exp. 7.1282 (prev. 7.1489)
• Click here for notable OpEx for the NY Cut.
• Click here for more detail.

FIXED INCOME

• More sustainable debt revival appears technical and positional following the extent of the recent decline.
• Bunds bounce from 132.18 to 132.96 and Gilts to 95.36 from 94.41.
• T-note lags within 113-16+/05 range awaiting prelim Michigan sentiment and commentary from the Fed post-hawkish FOMC hold.
• ECB TLTRO.III June window early repayment figure (EUR): 29.5bln (prev. 87.7bln).
• Click here for more detail.

COMMODITIES

• Crude benchmarks are under modest pressure this morning with fresh drivers limited and the action perhaps a break in the least few sessions consolidation and a return to the last few weeks general direction.
• WTI and Brent are towards the lower-end of circa. USD 1.00/bbl parameters and erring towards the USD 70.00/bbl and USD 75.00/bbl marks respectively.
• Spot gold is firmer as the tone remains tentative pre-FOMC speak while base metals are mixed given further Chinese support though a sizeable LME warehouse print seemingly weighs on Copper.
• Click here for more detail.

NOTABLE EUROPEAN HEADLINES

• ECB's Holzmann says has no view on what should happen with rates beyond July.
• ECB's Nagel said the ECB may need to keep raising rates after the summer break.
• ECB's Simkus says he does not see rate cuts at the start of next year.
• ECB's Rehn says rate decisions will continue to follow a data-dependent approach; key rates will be brought to levels sufficiently restrictive to achieve a timely return to inflation's medium-term target.
• ECB's Muller says rates are yet to peak.

NOTABLE US HEADLINES

• Fed Discount Window borrowing at USD 3.6bln on June 14th vs USD 3.1bln on June 7th, 'Other Credit' was at USD 180.5bln vs prev. 185.2bln and BTFP lending at USD 102bln vs prev. 100.2bln.
• Fed's Bostic (non-voter) disclosed new transactions that violated the central bank's trading guidelines in which ETF transactions were conducted during the forbidden blackout period, according to FT.
• WSJ's Timiraos tweeted that "Powell's Freudian "skip" suggests a July rate rise is the base case, even though (as always) the economy can intervene", while he cited comments from Fed watcher Tim Duy that "There is an every-other-meeting strategy, and the July decision has all but been made".

GEOPOLITICS

• US State Department said it wants Iran to take steps to cease its actions that destabilise the region including steps to curb its nuclear programme. It was separately reported that the US and Iran are in talks aimed at limiting Iran's nuclear programme, releasing some US citizens and unfreezing Iranian assets, while steps would be cast as an understanding and not an agreement subject to Congressional review, according to officials cited by Reuters.
• Russian Kremlin says President Putin remains open to any contacts to discuss the Ukraine conflict resolution, via Ria.
• Explosions heard in central Kyiv, according to Reuters witnesses. Note, an African leader delegation, led by South African president Ramaphosa, is currently in Kyiv.

APAC TRADE

• APAC stocks traded higher following the gains on Wall St where the major indices were lifted alongside a weaker dollar and softer yields as participants digested a hawkish ECB and the rise in US jobless claims.
• ASX 200 was positive with the gains led by early strength in energy and utilities after AGL Energy flagged a jump in FY24 underlying profit and with some households facing electricity tariff increases of up to 51% for the winter season.
• Nikkei 225 initially declined amid cautiousness heading into the BoJ policy decision but then recovered after the BoJ refrained from any hawkish surprises and maintained its ultra-easy policy settings.
• Hang Seng and Shanghai Comp. were underpinned amid anticipation of further support measures from China but with gains capped in the mainland amid lingering frictions with the EU to ban Huawei and ZTE equipment from internal Commission networks and after the US tempered expectations of a breakthrough in relations ahead of US Secretary of State Blinken’s visit to China.

NOTABLE ASIA-PAC HEADLINES

• NDRC said China will accelerate the implementation of policies to increase consumption and that temporary fluctuations in some sectors are normal with China's economic operations maintaining a recovery trend overall. NDRC also stated that China will speed up the process to allow private firms to access the infrastructure of major national scientific research projects, while they will encourage and attract more private firms to participate in national major projects and key industrial supply chain projects.
• White House National Security Adviser Sullivan said they do not expect a breakthrough in US-China relations from Secretary of State Blinken's upcoming trip to China.
• BoJ kept its policy settings unchanged, as expected, with rates at -0.10% and the parameters of QQE with YCC maintained in which the decision on YCC was made through a unanimous vote. BoJ said Japan's economy is picking up and is likely to continue recovering moderately but also noted that uncertainty regarding the economy is very high. Furthermore, it reiterated that core consumer inflation is likely to slow the pace of increase towards the middle of the current fiscal year and that inflation expectations are moving sideways after heightening.
• BoJ Governor Ueda says more time is needed to meet BoJ's 2% inflation target; do need to pay attention to financial and FX markets. Responding to inflation undershoot after a premature rate hike is more difficult than responding to overshoot. Risk of excessive inflation overshoot with cautious policy response is "not zero" but there's also risk of inflation undershoot with hasty monetary normalisation. Possible a large shift in the price view could result in a policy change.

DATA RECAP

• Singapore Non-Oil Exports MM (May) -14.6% vs. Exp. -1.3% (Prev. 2.7%); YY (May) -14.7% vs. Exp. -8.1% (Prev. -9.8%)