US stocks gained following a rise in JOLTS data - Newsquawk Asia-Pac Market Open

• US stocks reversed the recent weakness that was triggered by trade worries and with further upside seen in the wake of the rise in April JOLTS ahead of the May NFP due on Friday, which also saw bonds pare earlier gains. Sectors were predominantly firmer with outperformance in Technology, Energy and Materials, while Communication Services, Real Estate and Consumer Staples lagged with the comms. sector weighed on by losses in Alphabet (GOOGL) following more reports that Apple (AAPL) is considering Perplexity as an iPhone search alternative from Google Search.
• USD clawed back Monday's data-induced losses with some brief support seen following the latest April JOLTS number which exceeded expectations as the vacancy rate rose and the quits rate fell, while the April factory orders were soft and showed a larger-than-expected contraction but did little to derail the dollar's recovery. There were also several Fed speakers but had little impact on price action including from Fed's Cook who stated Fed policy is well-positioned for a range of scenarios and said she can't prejudge what the FOMC will do with rates.
• Looking ahead, highlights include South Korean GDP & CPI, Australian AIG Manufacturing & Construction Indexes, Australian & Japanese Services & Composite PMIs, Australian GDP.

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LOOKING AHEAD

• Highlights include South Korean GDP & CPI, Australian AIG Manufacturing & Construction Indexes, Australian & Japanese Services & Composite PMIs, Australian GDP.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks reversed the recent weakness that was triggered by trade worries and with further upside seen in the wake of the rise in April JOLTS ahead of the May NFP due on Friday, which also saw bonds pare earlier gains. Sectors were predominantly firmer with outperformance in Technology, Energy and Materials, while Communication Services, Real Estate and Consumer Staples lagged with the comms. sector weighed on by losses in Alphabet (GOOGL) following more reports that Apple (AAPL) is considering Perplexity as an iPhone search alternative from Google Search.
• SPX +0.59% at 5,970, NDX +0.80% at 21,662, DJI +0.51% at 42,519, RUT +1.58% at 2,102.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump signed a Proclamation to double steel and aluminium tariffs to 50% under section 232 authority which takes effect on Wednesday, while it was reported that the White House said US tariffs on UK steel and aluminium will remain at 25% for now, with the UK failing to get the 0% tariffs promised in the US ‘deal’ implemented in time, and all other countries will be hit by 50% tariffs, according to Bloomberg's Wickham.
• US President Trump is reportedly set to speak with Chinese President Xi on Friday, according to sources. However, it was earlier reported that a Chinese Foreign Ministry spokesperson said there was no information to share on a call between US President Trump and Chinese President Xi.
• White House Press Secretary said the Trump-Xi call will be held very soon, while she noted that USTR Greer is in Paris meeting with trading partners and a deal will be made soon. She also stated regarding China's critical mineral curbs that the White House is actively monitoring compliance with the Geneva trade agreement.
• White House said regarding the Wednesday trade offer deadline that it can confirm the letter is authentic and they are on track for good deals, while it was separately reported that the EU did not receive a US letter demanding best trade negotiations offers by Wednesday, according to Reuters sources.
• US Treasury Secretary Bessent said China has a choice here, on being a reliable partner and noted that China either wants to be a reliable partner for others, or not and must become more consumption-focused.
• US sent a "long" and "tough" list of requests to Vietnam in tariff negotiations and requested that Vietnam to effectively cut off its reliance on Chinese supply chains, according to Reuters citing sources.
• Chinese Foreign Minister Wang met with the US ambassador to China and hopes the latter promotes healthy, steady and sustainable bilateral ties, while he stated that China and US relations are at a critical juncture and that after the Geneva talks, China has conscientiously and strictly implemented the consensus. Furthermore, he commented it is regrettable that the US recently introduced a series of negative measures and that China firmly opposes the measures which harm China's legitimate interests, as well as urged the US to create the necessary conditions for bilateral relations to go back on the right track.
• Chinese Premier Li said China and Japan should expand trade and investment to achieve a higher level of mutual benefit and win-win results under the current international situation.
• China's Commerce Minister met with Australia's Trade Minister in France and held a pragmatic, constructive exchange on deepening bilateral economic and trade relations.
• China’s Commerce Minister said Chinese firms oppose the EU's plan to restrict Chinese firms’ participation in procurement of medical devices and that China will take measures to firmly safeguard the legitimate rights and interests of Chinese enterprises.
• EU’s trade chief and Chinese counterpart are to hold a fourth round of trade talks in June ahead of the July EU-China summit.
• Japan is to form a think tank with an eye on Trump tariffs and Taiwan, according to Nikkei.

NOTABLE HEADLINES

• Fed Governor Cook said Fed policy is well positioned for a range of scenarios and she is committed to keeping longer-term inflation expectations in check, while she said the Fed has to be open to all possibilities and can't prejudge what the FOMC will do now with rates.
• Fed's Goolsbee (2025 voter) said the Fed has to wait and see if tariffs have a big or small inflation impact, while he reiterated they could see a direct tariff effect on prices within a month.
• Fed's Logan (2026 voter) said monetary policy framework should be robust to a range of scenarios and the Fed should focus on achieving 2% inflation, while she added they should not try to make up for past inflation shortfalls and should pay attention to overshooting full employment and not just employment shortfalls. Furthermore, she stated that the Fed should consider how to better convey key risks, uncertainties, and policy responses.
• Fed's Bostic (2027 voter) said the best monetary policy approach now entails 'patience' and the Fed has time to see how uncertainty resolves given the ‘healthy’ economy. Bostic stated he is in no hurry to adjust their policy stance and still sees a possible path to one interest rate cut this year, depending on the economy but noted it is a 'tough call' to say if the Fed would be cutting rates absent trade uncertainty. Furthermore, he is 'very cautious' about jumping to cutting rates and needs to see more progress on lowering inflation before supporting rate cut, while he is not declaring victory on inflation yet and said there is still a way to go on inflation and that core prices are 'still an issue'.
• FOMC Discount Rate Minutes stated that directors voted to establish the primary credit rate at the existing level of 4.5%, while no sentiment was expressed by the Board at the meeting for changing the primary credit rate at this time.
• US President Trump is expected to waive statutory requirements under the Defence Production Act to help boost domestic production of critical minerals and weapons, with Trump expected to waive the requirement for congressional approval for projects above the USD 50mln threshold, according to Reuters citing a document.
• BLS said some April jobs data will be corrected on Friday and major measures such as the unemployment rate are unaffected; many numbers are to be corrected but the impact is 'negligible'.

DATA RECAP

• US Factory Orders MM (Apr) -3.7% vs. Exp. -3.1% (Prev. 4.3%, Rev. 3.4%)
• US JOLTS Job Openings (Apr) 7.391M vs. Exp. 7.1M (Prev. 7.192M, Rev. 7.2M)

FX

• USD clawed back Monday's data-induced losses with some brief support seen following the latest April JOLTS number which exceeded expectations in which the vacancy rate rose and the quits rate fell, while the April factory orders were soft and showed a larger-than-expected contraction but did little to derail the dollar's recovery. There were also several Fed speakers but had little impact on price action including from Fed's Cook who stated Fed policy is well positioned for a range of scenarios and said she can't prejudge what the FOMC will do with rates.
• EUR gave way to the rebound in the dollar and steadily retreated to beneath the 1.1400 handle in the aftermath of softer HICP inflation data.
• GBP relatively outperformed although still marginally weakened against the greenback, while a slew of comments from BoE officials did little to shift the dial.
• JPY was pressured amid the dollar strength and positive risk tone which saw USD/JPY briefly return to 144.00 territory.
• SNB's Tschudin said they look at price stability in the mid-term, not next month and that Swiss inflation fell to -0.1% in May, but that is just one data point and noted the outlook for the Swiss economy has become clearly more uncertain.

FIXED INCOME

• T-notes fluctuated and the curve flattened after a rise in JOLTS which pared the initial upside seen in the wake of the recent strong 10yr JGB auction.

COMMODITIES

• Oil prices extended on the prior day's gains amid the positive risk tone and ongoing geopolitical tensions between Russia and Ukraine.
• OPEC crude output seen rising 200k b/d to 27.54mln BPD in May, according to Bloomberg.
• Peru's Mining Minister said there is a rise in informal and illegal mining activity in two major copper production regions.

GEOPOLITICAL

MIDDLE EAST

• US proposed an interim step in Iran nuclear talks allowing some enrichment, according to the NY Times. It was separately reported that White House Press Secretary Leavitt said Witkoff sent a detailed proposal to Iran and hopes Iran will accept the proposal, otherwise, there will be consequences, while the US State Department said the maximum pressure campaign on Iran remains in 'full force'.
• Iran said the US nuclear deal proposal is not clear and raises many questions, while it was also reported that Iranian President Pezeshkian said Tehran will not bow to US pressure to dismantle its nuclear programme.

RUSSIA-UKRAINE

• Russia's Kremlin said work is ongoing but it would be wrong to expect imminent decisions and Ukrainian President Zelensky's insults directed at Russia's delegation clashed with the spirit of negotiations. Furthermore, it said agreements reached at talks in Istanbul will be honoured and when asked about a potential meeting between Russian President Putin, US President Trump and Ukrainian President Zelenskiy, it said that it is unlikely in the near future.
• White House Press Secretary Leavitt said President Trump is keeping sanctions on Russia as a tool in the toolbox and Trump remains optimistic about progress in Russia-Ukraine discussions.
• US Special Envoy Kellogg believes the Russia Sanctions Act is "ready to drop and said he spoke to Senator Graham about Russia sanctions.
• US Secretary of State Rubio spoke with Turkish Foreign Minister Fidan to discuss supporting direct negotiations between Russia and Ukraine.
• IAEA Chief Grossi said conditions for conducting a restart of the Zaporizhzhia nuclear power plant do not currently exist due to lack of water and stable power supply, while it would take quite some time before the plant can be restarted.

ASIA-PAC

NOTABLE HEADLINES

• US President Trump reportedly plans to sign another 90-day operating extension for TikTok, according to FBN's Gasparino citing people close to the White House.
• South Korean conservative presidential candidate Kim Moon-soo conceded defeat and liberal candidate Lee Jae-Myung was confirmed the winner of South Korea's presidential election.

EU/UK

NOTABLE HEADLINES

• BoE Governor Bailey said "Will not make any prediction about the June rate decision" and the path for rates remains downwards but added how far and how quickly rates will fall is shrouded in a lot more uncertainty, as well as noted that uncertainty reflects the international situation. Bailey said how QT feeds along the yield curve is important and the long end of the yield curve is less important for monetary transmission than the short end, while he added that a large steeping of the yield curve is not due to QT, but will need to consider how QT interacts with this.
• BoE's Breeden said she sees merit in maintaining a gradual and careful approach to adjusting the policy stance, while she also commented that the chance of inflation getting out of control is much less than in 2022.
• BoE's Dhingra said she is slightly reassured that global trade will not enter the worst-case scenario and she is not seeing the same rise in firms' inflation expectations as they are from consumers.
• BoE's Mann said she voted to hold rates unchanged in May as the labour market had not loosened as much as she expected in February and services price inflation was above what she viewed as consistent with getting CPI back to target, while she added the switch in the vote from a 50bps cut to a hold reflected the spillover from financial market volatility.
• UK will be forced to increase defence spending to 3.5% to keep the US on side, according to Sky News.
• Dutch Far-Right Leader Wilders confirmed to quit the government coalition (as expected) and told PM Schoof that all of his ministers will quit the government.

DATA RECAP

• EU HICP Flash YY (May) 1.9% vs. Exp. 2.0% (Prev. 2.2%)
• EU HICP-X F&E Flash YY (May) 2.4% vs. Exp. 2.5% (Prev. 2.7%)
• EU Unemployment Rate (Apr) 6.2% vs. Exp. 6.2% (Prev. 6.2%, Rev. 6.3%)