S&P 500 entered a bull market and tech outperformed as yields declined due to a spike in initial jobless claims - Newsquawk Asia-Pac Market Open

US stocks were mostly higher and the S&P 500 officially entered a technical bull market after climbing 20% from its October 2022 low, while particular outperformance was seen in duration/tech as US yields tumbled due to the highest initial jobless claims print since October 2021, while the recessionary fears on the troubling labour market data catalysed a pullback in the Russell 2k small-cap index.
USD weakened and the DXY retreated further away from the 104.00 level as yields declined after the spike in Initial Jobless Claims to the highest level since October 2021.
Crude futures declined but settled off lows with heavy selling pressure from reports that Iran and US were near an interim deal on nuclear enrichment and oil exports which was later refuted by the White House.
Looking ahead, highlights include South Korean Current Account, Japanese Money Supply, Chinese CPI & PPI.

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LOOKING AHEAD

Highlights include South Korean Current Account, Japanese Money Supply, Chinese CPI & PPI.

US TRADE

US stocks were mostly higher and the S&P 500 officially entered a technical bull market after climbing 20% from its October 2022 low, while particular outperformance was seen in duration/tech as US yields tumbled due to the highest initial jobless claims print since October 2021, while the recessionary fears on the troubling labour market data catalysed a pullback in the Russell 2k small-cap index.
SPX +0.62% at 4,293, NDX +1.27% at 14,484, DJIA +0.50% at 33,833, RUT -0.41% at 1,880.
Click here for a detailed summary.

NOTABLE HEADLINES

S&P 500 entered bull market territory after gaining 20% from the October 2022 low.

DATA RECAP

US Wholesale Inventory MM (Apr) -0.1% vs. Exp. -0.2% (Prev. -0.2%)
US Wholesale Sales MM (Apr) 0.2% vs. Exp. 0.4% (Prev. -2.1%, Rev. -2.7%)
US Initial Jobless Claims (3 Jun, w/e) 261k vs Exp. 235k (Prev. 232k, Rev. 233k)
US Continued Jobless Claims (27 May, w/e) 1.757M vs. Exp. 1.800M (Prev. 1.795M, Rev. 1.794M)

FIXED INCOME

US Treasuries bull-flattened after the spike in jobless claims piqued recession fears and unwound hike pricing, with price action also accentuated by a tumble in oil.

FX

USD weakened and the DXY retreated further away from the 104.00 level as yields declined and Initial Jobless Claims spiked to the highest level since October 2021.
EUR benefitted from the dollar's demise and shrugged off the downward revisions to EU GDP data.
GBP gained and reclaimed the 1.2500 handle with cyclical currencies buoyed by the positive risk tone.
JPY continued to reverse recent losses as US yields retreated after the disappointing claims data.
SNB's Jordan said inflation is more persistent than they thought and they are seeing second and third-round effects, while he added that Swiss rates are relatively low and that it is not a good idea to wait for inflation to rise and then have to hike rates.

COMMODITIES

Crude futures declined but settled off lows with heavy selling pressure from reports that Iran and US were near an interim deal on nuclear enrichment and oil exports which was later refuted by the White House.
Russian Deputy PM Novak said Russia is to expand key oil pipeline capacity by 32mln tons by 2026, while Russia and APAC countries were reported to discuss new long-term LNG contracts and participation in LNG projects, according to state media.

GEOPOLITICAL

Iran and the US were initially reported to be near an interim deal on nuclear enrichment and oil exports, while direct talks between US Special Envoy to Iran Malley and Iran's ambassador to the UN have taken place but it remains to be seen whether senior officials back it, according to Middle East Eye citing an Iranian source. Furthermore, an Iranian official and source said there is still reluctance on the US side to rejoin the 2015 nuclear deal and President Biden has no intention of returning to the JCPOA in its original form.
Israel expects an Iran agreement to be reached within a few weeks and understandings are expected to include an Iranian agreement to stop uranium enrichment at high levels in return for easing sanctions, according to Haaretz.
White House said the report that Iran and the US are nearing a deal on Iranian uranium enrichment and sanctions relief is false.
WSJ's Norman tweeted regarding rumours of a “deal” on Iran hashed out between Malley and Iran’s ambassador in which he noted that his info is that Malley has been or is in Paris and the ambassador is in New York which raises questions about the report and it is his understanding that Malley has not met Iran ambassador in a couple of months, according to WSJ.
White House said in the Atlantic Declaration statement that they face new challenges to international stability from authoritarian states such as Russia and China.
White House National Security Council spokesperson Kirby said 'its not accurate' when asked about the WSJ report on China establishing a spy facility in Cuba, according to an MSNBC interview.
Russian Kremlin said President Putin is to hold a "big press conference" at end-2023.
Russian Deputy Foreign Minister Rybakov said there is no cause for optimism regarding arms control dialogue with the US, according to Interfax.
Russian commander said Ukraine tried to launch a surprise attack on Zaporizhzhia, according to Interfax.
Japanese Defence Ministry said a jet was scrambled on Thursday morning as Chinese-gathering aircraft was flying over the Pacific East of Taiwan.

CRYPTO

US SEC Chair Gensler said crypto security issuers need to register the offer and sale of their investment contracts with the SEC or meet requirements for exemption, while he added that the vast majority of crypto tokens meet the SEC's investment contract test.
US Senator Warren said Binance appears to have lied to lawmakers.

ASIA-PAC

NOTABLE APAC HEADLINES

Chinese President Xi said they will stick with the economic opening, according to Xinhua.
China's Vice President said the momentum of UK economic and trade cooperation is positive and has great potential, as well as noted that China is willing to deepen cooperation with UK financial sector and promote sound development of bilateral relations.
UK and US agreed on a partnership to boost economic security in response to the growing threat of China, according to Sky News.
Taiwan's Foreign Minister is to visit Europe next week and is to speak with the Czech President at a one-day diplomatic event, according to Reuters citing sources.

EU/UK