Juneteenth Headlines Recap - Newsquawk Asia-Pac Market Open

US markets were closed for Juneteenth.
USD gained in the holiday-thinned session amid weakness in its transatlantic counterparts and a weaker yuan.
Looking ahead, highlights include Japanese Industrial Production April Final Reading, Malaysian Trade Data, PBoC Loan Prime Rate, RBA Minutes, Speeches from RBA Deputy Governor Bullock & Assistant Governor Kent.

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LOOKING AHEAD

Highlights include Japanese Industrial Production April Final Reading, Malaysian Trade Data, PBoC Loan Prime Rate, RBA Minutes, Speeches from RBA Deputy Governor Bullock & Assistant Governor Kent.

US TRADE

US markets were closed for Juneteenth.

STOCK NEWS

UBS (UBSG SW) faces hundreds of millions of dollars in penalties over Credit Suisse’s (CSGN SW) Archegos failings, according to FT.
Airbus (AIR FP) won a record 500-plane order from India’s IndiGo airline.

DATA RECAP

US NAHB Housing Market Index (Jun) 55.0 vs. Exp. 51.0 (Prev. 50.0)

FIXED INCOME

T-note futures were subdued and finished at session lows with demand hampered amid the closure of cash treasuries.

FX

USD gained in the holiday-thinned session amid weakness in its transatlantic counterparts and a weaker yuan.
EUR marginally softened amid the slew of ECB rhetoric which pointed to a hike for July and a question mark for September.
GBP was mildly pressured and GBP/USD retreated beneath the 1.2800 handle despite a move higher in UK yields.
JPY traded rangebound with USD/JPY contained by resistance at the 142.00 level.

COMMODITIES

Seaborne shipments of June-loading Russian Urals oil to China fell 50% for June 1st-19th M/M.
Iran set July Iranian light crude price to Asia at Oman/Dubai plus USD 3/bbl.

GEOPOLITICAL

Kyiv is in talks with Western arms manufacturers to boost output and set up production in Ukraine, according to Reuters.
UK government introduced new legislation enabling sanctions on Russia to be maintained until Moscow pays compensation to Ukraine.
EU report on Ukraine's membership bid said Kyiv has met 2 out of the 7 conditions to start formal accession talks, according to Reuters citing sources.
Russian government said if the Black Sea grain deal ends, the Russian-UN memorandum of facilitating exports will still be in place, according to RIA.

ASIA-PAC

NOTABLE APAC HEADLINES

Chinese President Xi met with US Secretary of State Blinken and said that China respects US interests and does not seek to challenge or displace the US, while he hopes to see a sound and steady China-US relationship and believes that the two major countries can overcome various difficulties and find the right way to get along. Furthermore, President Xi said he hopes the visit by Secretary Blinken could make positive contributions to stabilizing US-China relations and said "very good" progress was made on US-China ties.
US Secretary of State Blinken said the US is clear-eyed about the challenges that China poses and that he had important conversations with Chinese President Xi. Blinken reiterated the US’ long-standing one-China policy and noted that the US is for de-risking and diversifying, while he made it clear that the US will continue to take targeted action to protect national interests.
US President Biden said US-China relations are on the right trail, according to Reuters.
Chinese Foreign Ministry official said unilateral sanctions by the US is one reason blocking military-to-military communications.
China's state council issued guidelines on improving charging infrastructure to support the new energy vehicle industry and proposed to build a high-quality charging infrastructure system with wide coverage and moderate scale by 2030.
German Chancellor Scholz said the entire export business to China should not be put under state supervision and screening must be limited.

EU/UK

NOTABLE HEADLINES

BoE said it launched its first financial system-wide stress test which aims to improve understanding of how banks and non-banks behave in market stresses. BoE said large banks, insurers, clearing houses and investment funds will be included in the test, while test results in 2024 will not provide information on individual firms.
ECB’s de Guindos said there is no doubt that inflation will ease but also noted the slowdown in core inflation may be limited, according to Bloomberg.
ECB's Lane said inflation will come down fairly quickly in the next couple of years to the 2% target, while another hike in July seems appropriate, and then we will see in September.
ECB's Schnabel said the fact that they underestimated inflation persistence last year raises the probability that they are underestimating inflation now, while they need to remain "highly data-dependent" and err on the side of doing too much rather than too little.
ECB's Kazimir said rates need to increase again in July and is awaiting analysis of the cumulative impact of prior hikes for September, while he added that stopping rate hikes too soon is a much more significant risk than over-tightening.
ECB's Simkus said they are close to the end of the rate cycle and there is no need to rush with the September assessment.
ECB's Stournaras said a further decrease in inflation is expected and they cannot exclude a further hike but cannot say now and decisions are data-driven. Furthermore, Stournaras responded that it might be six months or a year and it depends on the data when asked about keeping rates at terminal and said they are definitely close to the end of rate hikes.
ECB is said to have told banks to prepare for harsher stress test results and that the regulators told banks to prepare for changes to the testing aimed at getting more credible results.
EU is to focus on export controls and critical technology in its security plan, according to Bloomberg.
EU countries failed to agree on a deal on power market reforms and talks will continue after Monday.