US stocks were but mostly edged following softer-than-expected PPI data - Newsquawk Asia-Pac Market Open

• US stocks were choppy but ultimately finished mostly higher as tailwinds from the softer-than-expected May PPI report offset the geopolitical concerns in the Middle East. Sectors were predominantly firmer in which Utilities, Tech, and Healthcare led the advances while Industrials, Communications and Discretionary lagged in the red with the former weighed on by Boeing (BA) (-4.8%) after a 787-8 Dreamliner crashed shortly after taking off in India.
• USD weakened against its peers in the aftermath of the softer-than-expected US PPI report which signalled a similar theme on US prices seen in the recent CPI report.
• Looking ahead, highlights include Japanese Industrial Production Final Reading for April, Peru Central Bank Rate Decision.

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LOOKING AHEAD

• Highlights include Japanese Industrial Production Final Reading for April, Peru Central Bank Rate Decision.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks were choppy but ultimately finished mostly higher as tailwinds from the softer-than-expected May PPI report offset the geopolitical concerns in the Middle East. Sectors were predominantly firmer in which Utilities, Tech, and Healthcare led the advances while Industrials, Communications and Discretionary lagged in the red with the former weighed on by Boeing (BA) (-4.8%) after a 787-8 Dreamliner crashed shortly after taking off in India.
• SPX +0.38% at 6,045, NDX +0.24% at 21,913, DJI +0.24% at 42,968, RUT -0.38% at 2,140.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump is expected to sign off on key components of the US/UK trade deal related to the "cars for agriculture" deal and officials cited by the FT said negotiations are ongoing on delivering tariff-free entry for UK steelmakers.
• US Treasury Secretary Bessent said talks with China will achieve balance in relations and China must be a reliable partner in trade negotiations. Bessent also said that China continues to add manufacturing capacity and that if China is willing to open its economy to American products, they could see a rebalancing of the US-China relationship, while he believes that China wants to address fentanyl trafficking and said they can fix it.
• USTR Greer said found a way for China to expedite magnets to the US and export controls aren't the thing you negotiate, while they are still finalising the implementation of the London talks with China and said they are in the process of changing policies. Furthermore, he said "We're it as a deadline" regarding the 90-day pause.
• EU and China are eyeing July 24th-25th for a summit, while the goal of the summit for China is for the EU to remove its duties on EVs, according to Politico.
• Cognac industry offered a "minimum import price" to Chinese authorities, while talks between the industry and Chinese officials are ongoing, according to Reuters.
• Canadian PM Carney said he sees progress in trade talks with the US.

NOTABLE HEADLINES

• US President Trump said don't like oil prices have gone up and they'd like to get lower interest rates, while he added can't get Fed Chair Powell to lower rates and he is not going to fire Powell. Furthermore, he said all Powell has to do is lower it and "If we lower by one point, pay one point less. If we lower by two points, pay less".

DATA RECAP

• US PPI Final Demand MM (May) 0.1% vs. Exp. 0.2% (Prev. -0.5%, Rev. -0.2%)
• US PPI Final Demand YY (May) 2.6% vs. Exp. 2.6% (Prev. 2.4%, Rev. 2.5%)
• US PPI exFood/Energy MM (May) 0.1% vs. Exp. 0.3% (Prev. -0.4%, Rev. -0.2%)
• US PPI exFood/Energy YY (May) 3.0% vs. Exp. 3.1% (Prev. 3.1%, Rev. 3.2%)
• US Initial Jobless Claims w/e 248k vs. Exp. 240k (Prev. 247k, Rev. 248k)
• US Continued Jobless Claims w/e 1.956M vs. Exp. 1.91M (Prev. 1.904M, Rev. 1.902M)

FX

• USD weakened against its peers in the aftermath of the softer-than-expected US PPI report which signalled a similar theme on US prices seen in the recent CPI report.
• EUR outperformed on the back of the dollar's continued demise, while there were several ECB comments including from de Guindos who said the role of the euro can gradually expand and ECB's Simkus stated that rates may still have to come down as risk has increased that inflation will be below projections and that the ECB has arrived at the neutral rate.
• GBP was initially weighed following disappointing UK data including monthly GDP estimates but then recouped its losses as the dollar selling persisted.
• JPY strengthened with USD/JPY firmly beneath the 144.00 handle and lows seen after the US PPI data and subsequent narrowing of yield differentials.

FIXED INCOME

• T-notes gained with the curve flattening amid renewed tariff woes, escalating geopolitics, and cooler-than-expected US PPI data.

COMMODITIES

• Oil prices were choppy throughout the session amid the ongoing geopolitical angst.
• US President Trump’s administration is expected to release a renewable fuel volume proposal on Friday, according to Reuters citing sources.
• Majority of G7 is prepared to lower the Russian oil price cap without agreement from the US if required, while Europe, Canada and the UK support a lower price cap, according to Reuters citing sources.

GEOPOLITICAL

MIDDLE EAST

• Israel is reportedly considering military action against Iran in the coming days, according to ABC.
• Israel’s Foreign Ministry said the international community must respond to Iran's non-compliance and take measures to prevent it from developing nuclear weapons.
• IAEA Board of Governors passed a resolution declaring Iran as being in non-compliance with nuclear safeguards.
• Iran’s President Pezeshkian said "We will continue enrichment and we will go on our way and will not deviate from the current trend", according to Sky News Arabia.
• IRGC Commander Salami said Tehran would respond in a more "forceful and destructive way" to Israel than in past offensives, according to Reuters citing state media.
• Iran’s Defence Minister said if nuclear talks fail and a conflict is imposed on it, IRGC will target all US bases in the host countries.
• Iran's National Security Committee stated the option of exiting the Treaty on the Non-Proliferation of Nuclear Weapons is on the table, according to Asharq News.
• Iran's nuclear chief Eslami said their new enrichment site is already built and ready to operate as soon as equipped with machinery, according to IRNA.
• US President Trump said an Israeli strike is not imminent but looks like it could happen. Trump also stated that he wants to have an agreement with Iran and they are fairly close to an agreement but added that Iran is going to have to negotiate tougher and Iran will have to give the US things they are not willing to. Furthermore, he said there's a chance of massive conflict and that something could happen soon.
• White House envoy Witkoff warned Republican senators that Iran could respond to an Israeli attack on its nuclear facilities with a massive missile attack that would overcome Israeli defences and cause massive damage and casualties, according to Axios’s Ravid.
• US Defense Secretary Hegseth said talks with Iran are still ongoing, according to Al Arabiya. It was also reported that US envoy Witkoff plans to travel to Muscat on Sunday for a sixth round of talks with Iran, according to a source cited by Reuters.
• According to US intelligence estimates, Iran has about 2,000 ballistic missiles with warheads capable of carrying tons of explosives or even more, many of which are within range of Israel, according to Axios.
• German Foreign Minister said they will not accept that Iran will get nuclear weapons.

RUSSIA-UKRAINE

• Foreign Ministers of France, Germany, Italy, Poland, Spain and the UK reiterate a readiness to increase pressure on Russia, including further sanctions, while they are determined to keep Russian assets frozen until Russia ceases aggression and pays damages.
• NATO is to boost missile defences in the east to deter Russia.

ASIA-PAC

NOTABLE HEADLINES

• PBoC Governor Pan said the PBoC is willing to continue to deepen exchanges and cooperation with the ECB to address global challenges and both sides will establish an annual meeting mechanism between the governors of the PBoC and the ECB.
• Chinese Premier Li met ECB President Lagarde and said China is willing to strengthen market connectivity with the EU, while he added that China is fully capable of hedging against the influence of external adverse factors and is willing to step up industrial coordination with the EU.
• An Air India Boeing (BA) plane that was headed to London crashed in Ahmedabad shortly after taking off, which killed 241 out of 242 of the passengers.

EU/UK

NOTABLE HEADLINES

• ECB's de Guindos said the role of the euro can gradually expand, especially if we deliver on “more Europe”, while he added the euro area economy has proved fairly resilient to date, supported by a strong labour market but noted recent developments may well have a dampening impact on growth in the euro area.
• ECB's Schnabel said the monetary policy cycle is coming to an end and the growth outlook is broadly stable despite the trade conflict, while financing conditions are no longer restrictive.
• ECB's Simkus said rates may still have to come down as risk has increased that inflation will be below projections and the ECB has arrived at the neutral rate.

DATA RECAP

• UK GDP Est 3M/3M (Apr) 0.7% vs. Exp. 0.7% (Prev. 0.7%)
• UK GDP Estimate MM (Apr) -0.3% vs. Exp. -0.1% (Prev. 0.2%)
• UK GDP Estimate YY (Apr) 0.9% vs. Exp. 1.1% (Prev. 1.1%)
• UK Services YY (Apr) 0.9% vs. Exp. 1.3% (Prev. 1.3%)
• UK Manufacturing Output YY (Apr) 0.4% vs. Exp. 0.5% (Prev. -0.8%)
• UK Industrial Output YY (Apr) -0.3% vs. Exp. -0.2% (Prev. -0.7%)