Sentiment lifted and crude craters as Iran delivers a "symbolic" strike on empty US bases - Newsquawk Asia-Pac Market Open

• Iran responded to the US attacks over the weekend, and attacked the Al Udeid Air Base in Qatar, although many of its US personnel had been evacuated of US personnel for a little while.
• NYT reported that Iran coordinated the attacks with Qatari officials and gave advanced notice that attacks were coming to minimise casualties, and Axiosʼ Ravid noted the Trump admin was aware in advance. 
• As such, given the heads-up warning and it being deemed a more "symbolic" attack, WTI and Brent significantly sold off.
• Fed's Bowman (voters) struck a notably dovish tone, following in the footsteps of known dove Waller last week.
• US stocks ended the day with gains in what was a very choppy session as Middle East tensions dominated newsflow. 
• Looking ahead, highlights include Japanese Chain Store Sales.

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SNAPSHOT

US TRADE

• US stocks ended the day with gains in what was a very choppy session as Middle East tensions dominated newsflow.
• Sectors were exclusively firmer, aside from Energy, which was weighed on by the losses in the crude complex.
• SPX +0.96% at 6,025, NDX +1.06% at 21,856, DJI +0.89% at 42,582, RUT +1.11% at 2,133
• Click here for a detailed summary.

DATA RECAP

• US S&P Global Composite PMI Flash (Jun) 52.8 (Prev. 53.0); Manufacturing PMI Flash (Jun) 52.0 vs. Exp. 51.0 (Prev. 52.0); Services PMI Flash (Jun) 53.1 vs. Exp. 53.0 (Prev. 53.7)

CENTRAL BANKS

• Fed's Bowman (voters) struck a notably dovish tone, following in the footsteps of known dove Waller last week, continue to highlight a potential divide forming between FOMC Committee members. Bowman said she is open to cutting rates as soon as the July FOMC meeting if inflation pressures stay contained, and 'it is time to consider adjusting the policy rate'. Bowman added they should put more weight on downside risks to the job market going forward, and trade policy is only likely to have 'minimal impacts' on inflation. She added data not showing much impact from trade policy shifts, the Government policy changes should lower inflation risks, and tariffs likely to have a small impact on inflation. Note, that Bowman, after Waller, is the second Committee member to signal a willingness for a July cut, and both of them are Governors. The year-end 2025 median SEP dot plot signalled 50bps of cuts, but with a hawkish composition, as if 1 Committee member shifted to 25bps of cuts this year (from 50bps) the median would have shifted to 25bps of cuts.
• US NEC Director Hassett says Fed's Waller and US President Trump are right about interest rates; no reason for the Fed not to cut rates.
• ECB's Lagarde: "Survey data point overall to some weaker prospects for economic activity in the near term. Higher tariffs and a stronger euro are expected to dampen exports, with high uncertainty delaying investment decisions."

FX

• The Dollar started the weekend on the back foot due to two main factors: 1) the pulling back of geopolitical risk premium, and 2) a dovish Fed Bowman.
• In Europe, flash PMIs for June filled the calendar, with Germany beating on mfg. and services, France fell short on both, while the UK beat on mfg. but disappointed on services, and the EZ missed on mfg., but met expectations on the services front.
• Haven FX was mixed with the CHF outperforming its JPY counterpart, putting USD/CHF at ~0.8120.
• In Mexico, Retail Sales fell 1% in April, the steepest drop since January 2024; meanwhile, Y/Y fell 2%, driven by declines in groceries and beverages, hardware and glass, and motor vehicles and fuel;

FIXED INCOME

• T-notes ended the day with gains as Bowman turned dove, in what was a choppy session as geopols dominated the tape.

COMMODITIES

• Oil prices traded between extreme parameters, but settled with significant weakness and settled at lows, as markets read the Iran response as de-escalatory

GEOPOLITICAL

MIDDLE EAST

• Iran responded to the US attacks over the weekend, and attacked the Al Udeid Air Base in Qatar, although many of its US personnel had been evacuated of US personnel for a little while.
• NYT reported that Iran coordinated the attacks with Qatari officials and gave advanced notice that attacks were coming to minimise casualties, and Axios’ Ravid noted the Trump admin was aware in advance.
• As such, given the heads-up warning and it being deemed a more ‘symbolic’ attack, WTI and Brent significantly sold off.
• Regarding the actual retaliation, which has been deemed a de-escalation, there were reports Iran was targeting bases in Qatar, Kuwait, and Iraq, but a US military official confirmed no Iranian attack recorded at any US base other than Qatar, and Qatar said its air defences intercepted all missiles on the US military base.
• US President Trump on Truth Social said, "Everyone, keep oil prices down. I'm watching!, and "To the DoE: Drill, baby, drill, and I mean now".
• Iran said it will continue its retaliation in response to US attacks, according to a senior official to Reuters.
• "Trump admin was anticipating Tehran would retaliate after US strikes, and the president does not want more military engagement in the region", via CNN citing a senior White House official.
• Kpler's Bakr said "As per our latest images, traffic in Hormuz is unaffected".
• Trump admin was aware in advance of Iran's attack on Al Udeid airbase, according to Axios' Ravid.
• There were no Iranian missile attacks against the Ain al-Assad base in Iraq, the sirens were activated at the base in preparation for an expected Iranian attack, via Roi Kais citing Iraqi security sources to Qatar's Al-Arabi channel.
• US President Trump posted "Iran has officially responded to our Obliteration of their Nuclear Facilities with a very weak response, which we expected, and have very effectively countered. There have been 14 missiles fired — 13 were knocked down, and 1 was “set free,” because it was headed in a nonthreatening direction. I am pleased to report that NO Americans were harmed, and hardly any damage was done. Most importantly, they’ve gotten it all out of their “system,” and there will, hopefully, be no further HATE. I want to thank Iran for giving us early notice, which made it possible for no lives to be lost, and nobody to be injured. Perhaps Iran can now proceed to Peace and Harmony in the Region, and I will enthusiastically encourage Israel to do the same. Thank you for your attention to this matter! DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA."
• A White House official told Axios' Ravid that Trump's goal now is to end the war and he is going to make it clear to Israeli PM Netanyahu. "We want a deal and don't want any more war", the official said

DATA RECAP

• EU HCOB Composite Flash PMI (Jun) 50.2 vs. Exp. 50.5 (Prev. 50.2); Services Flash PMI (Jun) 50.0 vs. Exp. 50.0 (Prev. 49.7); Manufacturing Flash PMI (Jun) 49.4 vs. Exp. 49.7 (Prev. 49.4)
• French HCOB Services Flash PMI (Jun) 48.7 vs Exp. 49.2 (Prev. 48.9); Manufacturing Flash PMI (Jun) 47.8 vs Exp. 50.0 (Prev. 49.8); Composite Flash PMI (Jun) 48.5 vs Exp. 49.3 (Prev. 49.3)
• German HCOB Manufacturing Flash PMI (Jun) 49.0 vs. Exp. 48.7 (Prev. 48.3); Services Flash PMI (Jun) 49.4 vs. Exp. 47.5 (Prev. 47.1); Composite Flash PMI (Jun) 50.4 vs. Exp. 49.0 (Prev. 48.5)
• UK Flash Services PMI (Jun) 51.3 vs. Exp. 51.5 (Prev. 50.9); Manufacturing PMI (Jun) 47.7 vs Exp. 46.6 (Prev. 46.4); Composite PMI (Jun) 50.7 vs. Exp. 50.5 (Prev. 50.3)