US stock indices mostly rebounded after last Friday's sell-off, while Iran and Israel said they would halt strikes - Newsquawk Daily Asia-Pac Market Open

• US stock indices were predominantly firmer on Monday, with the Nasdaq recovering some of the sharp losses seen in the latter half of last week, while the S&P 500 posted modest gains. The Dow closed little changed and the Russell 2000 also finished in positive territory. Market breadth was weak, however, with Technology accounting for most of the upside while the majority of sectors closed lower, in which Utilities and Real Estate led the declines after outperforming during last week's risk-off trade. Crude prices settled higher following a fresh exchange of strikes between Israel and Iran over the weekend. The escalation saw oil gap higher at the reopening of trade. However, President Trump later called on both sides to exercise restraint, helping reduce some of the geopolitical risk premium. Reports during the European session suggested the US and Israel had agreed not to strike Iran, while Iran had agreed to suspend military operations against Israel, although Tehran warned it would respond should Israeli attacks on Hezbollah in Lebanon continue.
• USD was mixed against G10 FX peers, as geopolitical news dominated the tape, after the weekend escalations with Iran and Israel, although Trump got involved and seemed to intimate that Iran and Israel are looking to do an immediate ceasefire... and final negotiations on “Peace” are proceeding, while both sides have eased off but promised to retaliate if fighting begins again, and Iran has warned of a "severe" response if the Israel Defence Forces continues striking southern Lebanon.
• Looking ahead, highlights include New Zealand Manufacturing Sales Volume, South Korean GDP, Australian Westpac Consumer Sentiment & NAB Business Confidence, Chinese Trade Data.

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LOOKING AHEAD

• Highlights include New Zealand Manufacturing Sales Volume, South Korean GDP, Australian Westpac Consumer Sentiment & NAB Business Confidence, Chinese Trade Data.
• Click for the Newsquawk Week Ahead.

IRAN CONFLICT

• US President Trump asked Israeli PM Netanyahu to back off on new strikes on Iran in a call on Monday morning, according to NYT citing sources. Trump reiterated in the call that he believes Iran and the US are nearing an agreement on a framework to bring the sides to the table for a longer-term deal.
• US President Trump argued during the call on Sunday with Israeli PM Netanyahu that either he would get a deal with Iran in a few days that would make the strikes unnecessary, or he wouldn't — in which case he might lead the strikes on Iran, according to Axios citing sources.
• US President Trump was said to have warned Israeli PM Netanyahu that if he turns escalation into war, he will be left alone against Iran, while Trump believes Iran is interested in signing an agreement, according to Al Jazeera.
• US President Trump posted "Both sides, Israel and Iran, are looking to do an immediate CEASEFIRE! Final negotiations on “Peace” are proceeding, subject to ignorance or stupidity getting in its way. The Blockade will remain in place, and in full force and effect, until a “Final Deal” is reached.”
• US current assessment is that Iran was not targeting any US personnel, assets, or locations during the strikes directed at Israel, according to NBC citing a US official.
• US is demanding Iran provide "precise" information on its enriched uranium stockpile and give the UN nuclear agency access "without delay", according to a draft resolution seen by AFP.
• Israeli PM Netanyahu said Iran intended to attack Israel with missiles, and if they had not acted in time, they would not be here today, while he stated that Iran will not have a nuclear weapon. Netanyahu stated that Iran and Hezbollah are weaker than ever, but the struggle is not over, and operations against Hezbollah are not over yet. Furthermore, he said the fire on the Iranian front is contained, and Israel is holding fire in Iran for now, but they will respond forcefully if they are fired upon again.
• Israeli PM Netanyahu has ordered the military to halt preparations for a new round of strikes on Iran, while Netanyahu was reportedly to make a decision regarding escalation with Iran during a Security Cabinet meeting on Monday evening.
• Lebanon's President said for the time being, they are negotiating a non-aggression agreement with Israel and he will not meet Israeli PM Netanyahu before reaching an agreement to end the war, while he told the Israeli government that the military solution will never provide security to the people of northern Israel, and they seek a good relationship with Iran based on non-interference.
• Israel and the US conveyed a message to Iran that there will be no further attacks if Iran does not fire again, Al Jazeera reports citing Israel Hayom sources.
• Iran's armed forces announced an end of the military operations against Israel, and warned of harsher attacks if Israel resumes attacks on Lebanon, according to Fars.
• Iranian President Pezeshkian said "Diplomacy and defense are the two wings of national power; we have neither left the field nor the negotiating table", while he added "We will defend the rights of the nation with authority and will not retreat in the face of any threat".
• Iranian Parliamentary Speaker Ghalibaf said they will turn the naval blockade into another defeat for the enemy, while he said that Trump's statements about the MoU were against the agreed parts of the deal and show the US is neither seeking a ceasefire nor dialogue. Ghalibaf also stated that the goal is to end the war and establish sustainable security, not to normalise relations with the US, and they have no trust towards the opposing party.
• Iranian Major General Rezaei said the Strait of Hormuz belongs to Iran and Oman, and they will not allow any power to interfere. Rezaei also stated he is not optimistic about an agreement because President Trump is not a man of negotiations, while he stated that if negotiations fail, Iran will not tolerate a naval blockade and will not stop enriching, as well as noted that Iran is serious about releasing its blocked funds.
• Iran’s Deputy Foreign Minister said Iran does not attach any value to recent EU sanctions and will continue its strategy of maintaining sovereignty over the Strait of Hormuz.
• Top Iranian official has cast doubts on a deal being imminently reached between the US and Iran, while the official said major roadblocks persist on issues like Iran’s nuclear program and uranium enrichment.
• IRGC force commander said from the Strait of Hormuz to Bab El-Mandeb and from the Persian Gulf to the Red Sea, there will be a new security belt of resistance.
• Iran said UAE bases used by the US and Israel may be targeted, according to IRNA.
• Israel's Defence Minister Katz said Israel rejects Iran's warning not to strike Lebanon, while a military spokesperson issued an evacuation warning for residents of an area in southern Lebanon's Tyre.
• Israel halted strikes on Iran at the request of US President Trump, according to N12 citing a senior Israeli official, while it was stated that strikes in southern Lebanon will continue in the coming days at full strength, and they will also bomb Dahiyeh if the attacks on their settlements and citizens continue.
• US official denied Israel’s claim that the US intercepted Iranian ballistic missiles that were fired at Israel, according to CNN.
• US CENTCOM said forces disabled an unladen oil tanker in the Gulf of Oman, June 8th, after the vessel violated the ongoing blockade against Iran by attempting to sail to an Iranian port.
• EU sanctions Iran guards over the closure of the Strait of Hormuz.
• Yemen's Houthis announced a complete and total ban on Israeli maritime navigation in the Red Sea, and it also claimed responsibility for a missile attack in Israel, while the Houthi group said banning navigation to the enemy is a preliminary step and the group is prepared for additional steps against any escalation, according to Al Araby TV.

US TRADE

• US stock indices were predominantly firmer on Monday, with the Nasdaq recovering some of the sharp losses seen in the latter half of last week, while the S&P 500 posted modest gains. The Dow closed little changed and the Russell 2000 also finished in positive territory. Market breadth was weak, however, with Technology accounting for most of the upside while the majority of sectors closed lower, in which Utilities and Real Estate led the declines after outperforming during last week's risk-off trade. US indices were predominantly firmer on Monday, with the Nasdaq recovering some of the sharp losses seen in the latter half of last week, while the S&P 500 posted modest gains. The Dow closed little changed, and the Russell 2000 also finished in positive territory. Market breadth was weak, however, with Technology accounting for most of the upside while the majority of sectors closed lower. Utilities and Real Estate led the declines after outperforming during last week's risk-off trade. Within Technology, Intel (INTC) was a standout performer after The Information reported that Alphabet (GOOGL) and Nvidia (NVDA) are evaluating the company as a secondary manufacturing partner. Elsewhere, the Memory ETF (DRAM) rebounded around 8%, while the Semiconductor ETF (SOXX) gained roughly 6%, recovering part of last week's sharp declines. Meanwhile, Apple held its WWDC, where it unveiled the updated Siri AI. The feature will be available later this year, although it will not be available in China due to regulatory issues, seeing the stock close lower. Crude prices settled higher following a fresh exchange of strikes between Israel and Iran over the weekend. The escalation saw oil gap higher at the reopening of trade. However, President Trump later called on both sides to exercise restraint, helping reduce some of the geopolitical risk premium. Reports during the European session suggested the US and Israel had agreed not to strike Iran, while Iran had agreed to suspend military operations against Israel, although Tehran warned it would respond should Israeli attacks on Hezbollah in Lebanon continue.
• SPX +0.30% at 7,406, NDX +1.58% at 29,414, DJI -0.16% at 50,791, RUT +0.77% at 2,855.
• Click here for a detailed summary.

TARIFFS/TRADE

• US Pentagon posted a list of Chinese military companies, in which it named Alibaba (BABA), Baidu (BIDU), BYD (BYDDY), Tencent (TCEHY), Nio (NIO) and Cosco among others.
• Brazilian Ministers Vieira and Elias are expected to meet USTR's Greer this week on tariffs, while a Lula-Trump meeting is eyed at the G7.

NOTABLE HEADLINES

• US bipartisan group will launch a discharge petition this week to prevent Trump from creating a weaponisation fund, while the bill would permanently amend the Federal Judgment Fund Act to prevent any opportunity for abuse, sources told Punchbowl.
• NY Fed SCE May: 1yr ahead expected inflation eases to 3.5% (prev. 3.6%), 3yr unchanged at 3.1%, 5yr unchanged at 3.0%.

FX

• USD was mixed against G10 FX peers, as geopolitical news dominated the tape, after the weekend escalations with Iran and Israel, although Trump got involved and seemed to intimate that Iran and Israel are looking to do an immediate ceasefire... and final negotiations on “Peace” are proceeding, while both sides have eased off but promised to retaliate if fighting begins again, and Iran has warned of a "severe" response if the Israel Defence Forces continues striking southern Lebanon.
• EUR eked mild gains in rangebound but choppy trade at the 1.1500 handle with little fresh catalysts from the bloc.
• GBP was flat on the day amid a light calendar, while it was reported that UK's Burnham is poised to delay any Labour leadership bid until after the battle to retain the Greater Manchester mayoralty, which is likely to provide further breathing room for UK PM Starmer.
• JPY lacked firm conviction in which USD/JPY traded on both sides of the key 160.00 level with participants tentative ahead of next week's BoJ meeting and are on the lookout for any intervention signals.

FIXED INCOME

• T-notes settled marginally lower and yields finished little changed after pulling back from session highs as US President Trump pushed de-escalation efforts.

COMMODITIES

• Oil prices were firmer to start the week, albeit settled well off highs, with Israel/Iran tensions the main driver. Upon reopening of trade after the weekend, benchmarks gapped higher in the wake of the weekend escalations and back-and-forth fire from Israel and Iran, which saw WTI and Brent hit peaks of USD 95.47/bbl and USD 98.08/bbl, respectively. However, supporting the oil space retracing off peaks were a couple of more positive Middle East comments, and largely from US President Trump, who said "Israel and Iran must immediately stop shooting", and also that "Israel and Iran are looking to do an immediate CEASEFIRE!". In addition to this, according to local media, Iran's armed forces announced the end of military operations against Israel, but warned of harsher attacks if Israel resumes attacks on Lebanon, while Israel and the US conveyed a message to Iran that there will be no further attacks if Iran does not fire again.
• Russia is to cut oil exports from western ports by one-third M/M in June, according to sources cited by Reuters.

GEOPOLITICAL

RUSSIA-UKRAINE

• Ukraine’s military said it struck a pipeline pumping station in Russia’s Volgograd region.

OTHER

• US is expected to send a delegation to Venezuela in the coming days.

ASIA-PAC

NOTABLE HEADLINES

• Chinese President Xi held talks with North Korean leader Kim, and will attend a welcome ceremony hosted by Kim, while Xi highlighted China's firm stance on highly valuing the traditional China-North Korea friendship will not change, with China ready to work with Kim to promote greater development of bilateral ties.

EU/UK

NOTABLE HEADLINES

• UK's Burnham is poised to delay any Labour leadership bid until after the battle to retain the Greater Manchester mayoralty, according to The Sun citing allies.
• French President Macron and German Chancellor Merz have agreed that companies involved in building a joint fighter jet are unable to reach an agreement.

DATA RECAP

• German Factory Orders MoM (Apr) M/M -3.8% vs. Exp. -1.2% (Prev. 5.0%)