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Negative bias in APAC after the choppy performance stateside; S&P 500 and Nasdaq notched fresh record closes – Newsquawk Europe Market Open

  • APAC stocks traded with a negative bias after the choppy performance stateside; S&P 500 and Nasdaq notched fresh record closes. 
  • Apple closed down 1.9% after its WWDC event failed to ignite enthusiasm; announced an integration of ChatGPT.
  • European equity futures indicate a mildly positive open with Euro Stoxx 50 futures up 0.2% after the cash market closed down 0.7% on Monday.
  • DXY is holding above the 105 mark, with FX markets broadly contained, EUR/USD remains on a 1.07 handle.
  • Looking ahead, highlights include UK Employment Data, US NFIB Business Optimism Index, EIA STEO & OPEC MOMR, Comments from ECB’s Lane & Elderson, Supply from Netherlands & US, Earnings from Oracle.

 

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negative bias in apac after the choppy performance stateside sp 500 and nasdaq notched fresh record closes newsquawk europe market open

US TRADE

EQUITIES

  • US stocks eked marginal gains after having shrugged off the downbeat mood seen in Europe following the EU Parliamentary elections over the weekend which saw far-right parties make notable gains and spurred French President Macron to call for a snap election. Nonetheless, US equities clawed back earlier losses once cash trade got underway, while the S&P 500 and Nasdaq 100 printed fresh record closes albeit with gains capped in quiet trade and as participants await upcoming risk events.
  • SPX +0.26% at 5,361, NDX +0.39% at 19,075, DJI +0.18% at 38,868, RUT +0.25% at 2,032.
  • Click here for a detailed summary.

NOTABLE HEADLINES

  • Apple (AAPL) announced at the WWDC its Vision OS2 and expanded Apple Vision Pro to eight new countries, while it also announced Apple Tap to Pay and confirmed a deal with OpenAI to integrate ChatGPT for iPhones. iPads and Macs.

APAC TRADE

EQUITIES

  • APAC stocks traded with a negative bias after the choppy performance stateside where the S&P 500 and Nasdaq notched fresh record closes but the gains were capped ahead of the mid-week key events.
  • ASX 200 declined amid broad weakness across sectors and as miners led the descent.
  • Nikkei 225 bucked the trend as it benefitted from recent currency weakness.
  • Hang Seng and Shanghai Comp. were pressured amid ongoing property sector concerns after a Hong Kong court issued a wind-up order to Chinese property developer Dexin China.
  • US equity futures were lacklustre amid the risk aversion in Asia and as key risk events loom.
  • European equity futures indicate a mildly positive open with Euro Stoxx 50 futures up 0.2% after the cash market closed down 0.7% on Monday.

FX

  • DXY traded steadily overnight slightly above the 105.00 level amid a lack of fresh drivers and as participants await Wednesday's US CPI release, the FOMC rate decision and the latest SEPs.
  • EUR/USD remained contained after the recent politically triggered underperformance and with a few ECB speakers scheduled later today.
  • GBP/USD eked slight gains after recovering from a brief dip beneath the 1.2700 handle, while the focus for GBP turns to the looming UK Employment Change and Average Earnings data.
  • USD/JPY mildly extended above 157.00 amid light catalysts and the absence of jawboning.
  • Antipodeans were lacklustre with headwinds from the mostly negative risk tone and following weaker NAB Business Surveys from Australia which showed business confidence slipped into negative territory.
  • PBoC set USD/CNY mid-point at 7.1135 vs exp. 7.2724 (prev. 7.1106).

FIXED INCOME

  • 10-year UST futures attempted to nurse some of its post-NFP losses after finding support around the 109.00 level but with the recovery limited ahead of a 10-year auction and Wednesday's key risk events.
  • Bund futures were off the prior day's lows although remained sub-130.00 as attention turned to upcoming ECB speakers, while Lagarde recently noted they can keep rates on hold for as long as needed.
  • 10-year JGB futures partially recovered some of the recent lost ground heading into an enhanced liquidity auction for long to super-long JGBs which saw a muted reaction despite attracting firmer interest.

COMMODITIES

  • Crude futures were little changed overnight and held on to most of the prior day's spoils after rallying on upcoming summer fuel demand and lingering geopolitical risks.
  • European officials are reportedly in talks to keep gas flowing through a key Russia-Ukraine pipeline, according to Bloomberg.
  • Spot gold traded rangebound heading closer to the mid-week key events and after having reclaimed the USD 2,300/oz level.
  • Copper futures were subdued after the recent sideways price action and amid the downbeat risk tone in its largest purchaser China amid property sector concerns.

CRYPTO

  • Bitcoin was pressured overnight and slipped firmly beneath the USD 69,000 level.
  • Crypto insiders are said to be meeting with US Senate staffers to try to resolve a surprise crypto policy push embedded in a recent Senate spending package that cleared the intelligence committee, according to CoinDesk.

NOTABLE ASIA-PAC HEADLINES

  • China saw 110mln domestic tourist trips during the three-day Dragon Boat Festival holiday and official data showed that Chinese cross-border trips rose 45.1% Y/Y during the three-day holiday.
  • Hong Kong court issued a wind-up order to Chinese property developer Dexin China (2019 HK), while it was later reported that Dexin China suspended trading in Hong Kong.

DATA RECAP

  • Australian NAB Business Confidence (May) -3.0 (Prev. 1.0)
  • Australian NAB Business Conditions (May) 6.0 (Prev. 7.0)

GEOPOLITICAL

MIDDLE EAST

  • Israel conducted raids on the Hosh al-Sayed Ali area of the Hermel district near the Lebanese-Syrian border, according to Al Jazeera.
  • US State Department said Secretary of State Blinken discussed with Israeli Defence Minister Gallant on Monday the Gaza ceasefire proposal.

OTHER

  • US President Biden is to lift the ban on allowing a controversial Ukrainian unit to use US weapons, according to The Washington Post.
  • South Korean military said it fired warning shots after North Korean soldiers briefly crossed the border on Sunday, according to Yonhap.

EU/UK

NOTABLE HEADLINES

  • UK PM Sunak pledged to 'keep cutting people's taxes' as part of the Tory election manifesto, according to The Standard. It was also reported that the Conservative Party unveiled a 100% capital gains tax break for landlords who sell properties to their tenants, according to The Telegraph.
  • French President Macron is to give a press conference on Tuesday to explain his decision to call early elections and to appeal to voters to reject the far right, according to Eurasia Group.
  • France's National Rally party and lawmaker Marion Marechal are in talks about potentially joining forces to oppose President Macron in the upcoming elections, according to Bloomberg.
  • ECB President Lagarde said interest rates are not necessarily on a linear declining path and there might be periods when they hold, while she said it is possible the ECB will hold rates for longer than a single meeting and noted that time-dependent guidance on rates is not helpful. It was separately reported in FT that Lagarde said the ECB can keep rates on hold for as long as needed.

via June 10th 2024