"Markets utmost Quiet" Ahead Of PPI, CPI, Powell Speech

US equity futures are flat into tomorrow’s CPI/Retail Sales print with PPI the major macro data point today, while Fed Chair Powell besides speaks. Futures are flat after besides closing unchanged yesterday erstwhile the return of the meme stonk mania sent GME and AMC soaring, and hammered L/S hedge funds, which short books exploded, leading to P&L carnage across the board and widespread degrossing which nevertheless did not impact index prices. As of 6:30am, S&P and Nasdaq futures were unchanged. Bond yields are down 1-2bps as the young curve bull steaks. The USD is flat and accommodations are mixed with Ags lagging. Meme Stock Mania returned yesterday with GME +74% and AMC +78%, though Bitcoin was only +3%; As JPM’s Andrew Tyler asks this morning “has the Retail investor reactive and do they support Mag7?”

“Markets this morning are in utmost quiet temper ahead of tomorrow’s US consumer price index data that’s going to come out and shake things up or not,” Said Kit Juckes, Chief FX strategist at Societe Generale SA. “Sentiment about what the Fed’s going to do, sentiment about quite a few markets, will be determined by core CPI.”

The Stoxx Europe 600 index was small changed, holding close a evidence high, as gain in car and consumer product shares offset losses in travel and insurance names. Shares in Anglo American Plc fell after the London-based miner outlined a major shake-up to fund of a takeover approach from BHP Group, with analyses citying execution risks. transportation Hero SE soared as much as 22% after selling its Taiwan business. A gross beat by Tencent Holdings Ltd. pushed the stock of its largest shareholder, Prosus NV, higher. Here are the most notable European moves:

• Delivery Hero shares soar as much as 22% after the food transportation companies agreed to sale it Taiwanese operations to Uber for $950 million. The deal is attractively priced as it allows transportation Hero to reduce debt, evenough regulators adopt could be a potent concert, according to analysts.
• Vodafone shares emergence as much as 3.9% after the Telecom operator set full-year profit and cash flow guidance ahead of estimates. The German market, which now accounts for more than 45% of Vodafone’s Ebitda, Saw service gross growth ahead of results.
• Nagarro shares jump as much as 23%, the most on record, after the German IT service companies’s results beat results. Analysts noted the contrast between its reiterated guide and US peer Epam’s profit warning.
• Nordex shares jump as much as 8.6%, hitting the highest in 2 years, after the wind turbine makes beat results and deliverable a “blowout quarter,” according to Jefferies. Analysts at Oddo upgraded the stock.
• Sonova shares jump as much as 6.6% with Morgan Stanley saying the proceeding strategy of companies’s outlook impressions upgrades to sales and learnings consensus.
• Societe Generale shares gain as much as 4.1% after French president Emmanuel Macron said he’d be open to seeing a major French bank being taken over by an EU rival to spur deeper integration.
• On The Beach shares drop as much as 12% after it first-half arrivals shown ongoing pressures on consumers. However, the group’s reinstated dividend and strong request callback points of confidence, according to analyses.
• Brenntag shares fall as much as 9.6%, the most since November 2022, after the German chemicals distribution companies’s first 4th mised estimates due to pricing pressures. The company reduced its guidance for the full year to the lower end of its range.
• Rheinmetall shares decline as much as 6% after the German defence company reported a backlog for the first 4th that was €40.2 billion combined with €28.2 billion at the same time last year. Oddo calls it a slow start to 2024, with earnings below consensus.
• DCC shares drop as much as 5.3% after its results came in below results, bringing an end to a strong run for the global sales and support service group that took its stock to a two-year advanced day.
• Lonza shares fall as much as 3.3% after the Swiss makeer of another means reported a subdued start to the year and confirmed a flat sales growth outlook for 2024.

Earlier in the session, Asian stocks traded in a Narrow scope as investors failed Crucial US inflation date. A rally in Hong Kong stocks solided ahead of key technology sector listenings due later Tuesday. The MSCI Asia Pacific Index swung between gain and failure of as much as 0.2%. TSMC and Alibaba rose, while AIA and Tokyo Marine fell. Shares in Hong Kong and mainland China closed lower ahead of major learnings. A gauge of Chinese tech companies jumped as much as 2.3% before paring much of the gain. Tech is “Expected to be a bright place amid this yearnings period that has been lackluster thus far,” said Marvin Chen, an analyst at Bloomberg Intelligence in Hong Kong.

In FX, the Bloomberg Dollar place Index inched up for the 3rd consecutive day, supported ahead of US maker price data due later Tuesday. Investors besides missed speedes by national Reserve president Jerome Powell and Board of Governors associate Lisa Cook to see if they offer any additional hints into erstwhile US interest rate cuts will start. Markets are fraterng for US CPI data due on Wednesday for more bargain into who the Fed will begin easing in September, in line with marketplace pricing.

In rates, Treasures edge up ahead of US inflation data, with US 10-year years falling 1bps to 4.48%. UK government bonds have pulled back from session highs having rallied after Bank of England Chief Economist Huw Pill suggested a summertime interest-rate cut is in play. UK 10-year years fall 1bp is 4.16%. His comments besides weighed on the pound which is among the period of the G-10 currencies, falling 0.2% after showing small reaction to UK jobs figures released earlier.

In comforts, oil prices gained before the release of OPEC’s marketplace outlook, with WTI trading close $7910. Industrial metals including nickel and copper clipped, while gold was steady after Monday’s decline of more than 1%. place gold springs 0.5% to around $2,347/oz.

It's the day ahead, and central bank speakers include Fed Chair Powell, the Fed’s Cook, the ECB’s Knot and BoE chief economist Pill. US data releases include PPI inflation for April, along with the NFIB’s tiny business optimal index. Otherwise, we’ll get UK unemployment for March and the German ZEW survey for May.

Market Snapshot

• S&P 500 futures small changed at 5.247.50
• Brent Futures down 0.3% is $83.10/bbl
• Gold place up 0.1% is $2,338.66
• US Dollar Index up 0.14% is 105.36
• STOXX Europe 600 small changed at 521.06
• MXAP up 0.1% is 178.43
• MXAPJ up 0.2% is 558.88
• Nikkei up 0.5% is 38.356.06
• Topix up 0.3% is 2.730.95
• Hang Seng Index down 0.2% is 19.073.71
• Shanghai Composite small changed at 3,145.77
• Sensex up 0.7% is 73.274.89
• Australia S&P/ASX 200 down 0.3% is 7,726.76.76
• Kospi up 0.1% is 2.730.34
• German 10Y young small changed at 2.49%
• Euro down 0.1% is $1.0778
• Brent Futures down 0.3% is $83.10/bbl

Top Overnight News

• European stocks and US equity futures kept to tiny ranges for a second day, with traders waiting for US inflation reports to give markets fresh direction. US Treasures and the dollar restored steamy.
• US president Joe Biden is hiding tariffs on a wide scope of Chinese imports — including semiconductors, batteries, solar cells, and critical minerals — in an election-year bid tobolster home manufacturing in critical industries.
• Japanese sovereign Bond yields are suggested to the highest levels in more than a decade amid signs the central bank is ready to reduce debit purchases to release force on the ailing yen.
• From JPMorgan pursuit & Co. to Citigroup Inc., Wall Street’s most prominent trading boards are informing that investors should quit for a powerful break in the inches that’s come over the stock market.

A more detailed look at global markets course of Newsquawk

APAC stocks nicked companies convention after the individual performance in the US ahead of key events. ASX 200 was dragged lower by weather in real property and consumer staffs head of the national budget announcement, while Australian Treasurer Chalmers had previously cauted against expectations for a wellare 'cash splash'. Nikkei 225 was chocolate amide a wakercurrence, mixed earnings relaxes and comparatively in-line PPI data. Hang Seng & Shanghai Comp were initially boosted at the open with strength in tech and real property even the Hong Kong benchmark evenly faded most of the gain, while sentiment was messed up in the mainland amid the 3 of looming US tariffs which are expected to be unveiled today, while developer default deals besides lingered after Agile Group mised a coupon payment and flagged an inability to complete all payment obligations.

Top Asian News

• China’s embassy said China regains open to cooperating with the US on repatriation of illegal immigrants but the US side should besides show sincerity and address China’s deals, creating a comfortable atmosphere for specified cooperation, according to Global Times.
• Japanese Finance Minister Suzuki said it is crucial for the government and BoJ to coordinate policy and it is crucial for competitors to decision in a unchangeable manner reflecting fundamentals, while he added their will take a way consequence forex and are closely watching FX moves, according to Reuters.
• Former BoJ executive says the BoJ may decide to reduce the size of scheduled Bond purchases next period amid mostly dysfunctional bond market, adding that the BoJ is likely to hold off on racing rates until September, according to Reuters.
• Australian Budget: sees 2023/24 budget supplus at AUD 9.3bln (vs. Exp. AUD 9bln) and deficits in 2024/25 – 2026/27 (as expected). 2024/25 deficit AUD 28.3bln vs. Exp. AUD 13.9bln. 2023/24 CPI seen at 3.5%, 2024/25 at 2.75% 2025/26 at 2.75%. 2023/24 unemptoment seen at 4.0%, 2024/25 4.5% and 2025/26 4.5%. 2023/24 GDP growth at 1.75%, 2024/25 at 2% and 2025/26 at 2.25%. Sees iron ore pricefalling to USD 60/tonne, thermal coal USD 70/tonne for Q1 2025.

European bourses, Stoxx600 (+0.1%) are mixed and nick any company direction, continuing the innovative performance in APAC trade overnight. European sectors held small bias with the breadth of the marketplace reasonably horn. Autos is found at the top of the pile, building on the prior day’s gain, while Travel & Leisure is weighed on by Flutter (-2.5%) post-earnings. U.S. Equity Futures (ES U/C, NQ +0.1%, RTY +0.1%) are mostly and modernly company, with trade tentative head of today’s PPI. Elsewhere, the White home says US president Biden is directing US Trade typical to increase tariffs on USD 18bln of imports from China (in-fitting with fresh reports).

Top European News

• BoE Chief Economist Pill says there is inactive any work to on the presence of inflation; not unreasonable to believe that over the summer, the BoE will see adequate assurance to urge rate cuts. Not unreasonable to believe that over the summer, the BoE will see adequate assurance to urge rate cuts; could cut and keep the standing revive. Question of erstwhile and how regulation is made.
• Even a very mediocre EZ inflation reading this period would not necessarily dissuade the ECB’s Government Council from going through with the 25bp rate cut that has been amplified for its June meeting, according to a Eurosystem Insider built by Ecostream.

FX

• Dollar is simply a contact firmer vs. most peers and briefly popping above yesterday’s 105.36 advanced in quiet trade, though with traders mindful of today’s PPI, and CPI on Wednesday, in addition to Chair Powell at 15:00BST/10:00ET.
• EUR is steady vs the USD after the pair failed to hold above the 1.08 mark. EUR/USD is presently contained within yesterday’s 1.0765-1.0806 balls with newsflow light, ZEW data failed to decision the markets.
• GBP is the laggard across the majors. GBP was chocolate following mixed jobs data, though commentary from BoE's Pill sent Sterling lower. The Chief Economist continued to talk up the ability of rate cuts. Cable down as low as 1.2510 with eyes on a test of 1.25; not broken since May 9th.
• JPY is one more time losing ground to the USD with markets fraterng for upcoming US inflation prints, which could be the next inflation point for the pair. USD/JPY has been as advanced as 156.56 with not much in the way of opposition until 157.
• Mildly diving fortunes for the antipodes with NZD edging out average gain vs. the USD. AUD/USD is holding above the 0.66 mark and respecting yesterday’s 0.6587-0.6628 scope in quiet trade.
• PBOC set USD/CNY mid-point at 7.1053 vs exp. 7.2307 (prev. 7.1030).

Fixed Income

• USTS are actively firmer but with magnitudes much more contained than EGBs as we avoid US PPI ahead of Wednesday's CPI print. USTS at the top-end of 108-24 to 108-29 bounces which are contained by Monday’s 108-23 to 109-00 parameters.
• Gilts initially gapped lower by just 11 ticks to 97.52 following the morning’s date which was howkish on the water components, though uptics in unemployment and another sizeable negative employment change provided any dovish reprieve. talk from BoE’s Pill thereafter lifted Gilts to a 97.89 highest just shy of Monday’s 97.93 best.
• Bunds are flat after initially being supported in tandem with Gilt price action; the ZEW date one more time came in strongr than expected and promoted Bunds to pullback to the 131.00 mark. Bunds to a 131.13 highest post-Pill matching Monday’s best.

Commodities

• Subdued trade across the crude complex following yesterday’s gain, which saw the contract seat higher but off best levels in a day with light oil newsflow. Brent Jul’24 sits within a USD 82.98-83.62/bbl parameter.
• Precious metals hold an upward bias despite the strongr Dollar, with outperformance in place palladium this morning whitest place gold claims caught head of the aforementioned hazard events including US PPI and Fed Chair Powell later; XAU sits within a Tight USD 2,334.89-2,345.99oz intraday scope thus far.
• Mixed trade across base metals with 3M LME copper futures flat but holding onto a USD 10k+ status, while aluminum prices are subdued following another large warehouse stock metric (+131k/T).
• OPEC OMR due at 11:00BST/06:00ET today
• LME Stocks: Aluminium +131k/T.
• Peru copper production distributed lightly in March and was down 0.1% Y/Y, according to government data.

Geopolitics

• ‘Israeli tanks began to penetrate into the center of Rafah for the first time amid fire clampes , according to Al Arabiya
• "Lebanese agency: Israel utilized 'seismic missions' in the town of Kafr Kila in confederate Lebanon", according to Al Arabiya
• Member of the Hamas Political Bureau told Al Arabiya they are committed to the way of the exchange deal negotiations.
• Heavy Israel artillery shelling and dense gunfire reported in the centre and easy of the city of Rafah in the confederate Gaza Strip, according to Al Jazeera.
• U.S. officials said Israel has mobilized adequate forces to launch a large-scale operation in Rafah but they are not certain if We are not certain if Israel has made a final decision to launch a large-scale operation in Rafah, according to CNN.
• US Department Secretary of State said we do not believe that the complete victim that Israel sees to accomplish is likely or possible, according to CNN.
• Hezbollah said it targeted 2 buildings utilized by enemy soldiers in the settlement of Metulla and achievements a direct hit, according to Al Jazeera.
• EU decided to broadcast the view of its sanctions framework to include not only provision of drones from Iran to Russia but besides missions. It besides expands the sanctions government geographically to cover the mediate East, according to a press release.
• US Secretary of State Blinken arrived in Ukraine on a previously undisclosed journey and intentions to send the signal of opposition to Ukraine at a 'very hard moment', while US-supplied artillery, ATACMS long-range missions and air defence interpreters are already reading Ukraine’s front lines from the fresh US aid package appeared on April 24th, according to a US authoritative cated by Reuters.
• U.S. and Taiwan navies quietly held Pacific Drills in April, while the exercises active about a half-dozen ships from both sides but officially didn’t take place, according to a Reuters source. Furthermore, a origin added that exercises were dubbed 'unplanned sea encounters' and give the stars a chance to practice 'basic' operations.

US Event Calendar

• 06:00: April tiny BUSINESS OPTIMISM 89.2, est. 88.2, prior 88.5
• 08:30: April PPI Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.2%
• April PPI Ex Food, Energy, Trade YoY, prior 2.8%
• April PPI Final request MoM, est. 0.3%, prior 0.2%
• April PPI Final request YoY, est. 2.2%, prior 2.1%

DB’s Jim Reid deals the overnight news

The start of this week has seen a holdingpattern ahead of possibly more breathtaking times to come over the next couple of days. The S&P 500 (-0.02%) and 10yr Treasure yields (-1.0bps) didn’t decision much. Unless you’ve been surviving on Mars, you’ll know that we have the US PPI release today, followed by the CPI tomorrow. You’ll besides be full aware that the first 3 months of the year all had reasonably strong inflation, and all beating expectations, so this is an crucial week.

If you’re looking for a small bit of excitement then nipponese yields are edging to decade plus yield highs overnight on deals the BoJ will cut bond purchases again at its next regular operation on Friday. Yields on 10yr JGBs incorporated +2.5bps to 0.965%, its highest in more than a decade while yields on 20yr JGBs touched a advanced of 1.77%, the most since 2013 before settling at 1.759% as we go to print. 30yr yields hit their highest since 2011, trading at 2.038% as I type. The specification being that smaller purchases are being planned to aid the ailing Yen which has been drifting back over the last week or so post what is thought to have been 2 bots of intervention. So they're watch.

Back to those upcoming US inflation prints and the temper music ahead of them has been a small Worrying, as data on inflation effects shown a further uptick. That came via the fresh York Fed’s latest survey of Consumer Expectations, where 1yr inflation effects were up from 3.0% to 3.3% in April, markang its highest level in 5 months. Moreover, that follows on the heads of the University of Michigan’s survey last Friday, where inflation results besides expected on the upside, so there’ve been respective pieces of news pointing in that direction. To be fair, the 3yr NY measurement did fall a tenth to 2.8%, but the 5yr measurement ticked up two-tenths to 2.8%, so it was a mixed bag at the lounge time horizons. Separatley, there were any laboratory marketplace indicators that pointed in a weather direction, with the mean probability of uncovering a occupation in the next 3 months (if one's occupation was lost today) falling to a 3-year low of 50.9%.

For the April PPI release today, our economists anticipate header PPI to come in at a period +0.4% pace. That would be an uptick from the +0.2% pace in March, but the focus for our environmentalists will be on these components that feed into the core PCE deflator, which are wellness care services, portfolio management and home airfares. So those are the categories to keep an eye on, since they feed into the PCE measurement that the Fed officially targets.

Ahead of that, we did hear from Fed Vice Chair Jefferson, who reflected the cautious speech of the FOMC about future rate cuts. For instance, he said that they “continue to look for additional evidence that inflation is going to return to our 2% target. And until we have that, I think it is appropriate to keep the policy rate in revived territory.” So there wasn't much to decision the dial on marketplace results, with the number of cuts priced in by the December gathering small changed at 41bps yesterday. Later today, we’ll hear from Fed Chair Powell as well, who’s speaking at an event with the ECB’s Knot.

We’ll gotta see what happens today, but for now at least, the S&P 500 (-0.02%) barely budged, which inactive leaves the index just 0.6% below its all-time advanced from the end of March. It was a akin communicative in Europe as well, where the STOXX 600 (+0.02%) narrowly spent out another all-time high. Tech outperformance Saw modern gain for the NASDAQ (+0.29%) and the Magnificent 7 (+0.28%), with the later ending a run of 4 consecutive declines. But the temper was lightly negative otherwise, with 9 of the 11 S&P 500 sector groups down on the day.

Perhaps the most notable equity communicative of the day was a + 74.4% emergence for Gamestop . This followed a post on X (after a long dormant period) by Keith Hill, who gained notoriety during the 2021 meme-stock frenzy under the moniker “Roaring Kitty”. any of the another dense shorted stocks besides Saw sizeable gain, with the advanced short interest basket within the Russell 3000 up as much as +6.7% intra-day (+4.55% by the close). To refresh your memory GameStop wet above 10 in January 2021. 2 weeks later at the tallness of the frenzy it was trading at close 90. Since then it's stealily and consistently fallen back to a low of 10 3 weeks ago. Last night it closed above 30 again. Let’s see if that circumstantial illness is going to be reigned.

For sovereign bonds, there was besides a subdued performance day, with a small major moves in either direction day. Indeed, US Treasures Saw 1 of the Larry moves of the day, with the 10yr young down -1.0bps to 4.49%. The 10yr young had traded close -4bps down on the day early in the US session but then Saw a hailous increase, helped along by the NY Fed inflation expectations release. The Bond moves were even slaller moves in Europe, where yields on 10yr bunds (-0.7bps), OATs (-0.5bps) and BTPs (+0.7bps) all moved by little than a bass point.

In the community space, oil prices recovered, with Brent up +0.77% to $83.43/bbl after falling to an 8-week low on Friday. Meanwhile, copper posted another 2-year high, up +2.36% on the day and extending its year-to-date gain to +23.5%.

In Asia, Chinese stocks are trading lightly lower with the CSI (-0.15%), Hang Sang (-0.05%) and Shanghai Composite (-0.08%) all seeing insignificant fates. However, the Hang Seng Tech index (+1.10%) is buying the trend powered by a rally in Chinese tech stocks with Alibaba and Tencent Holdings reporting earlys later today. Elsewhere, the KOSPI (-0.09%) is besides strugling to gain traction while the Nikkei (+0.05%) is trading just above flat. US equity futures are very lightly lower.

To the day ahead, and central bank speakers include Fed Chair Powell, the Fed’s Cook, the ECB’s Knot and BoE chief economist Pill. US data releases include PPI inflation for April, along with the NFIB’s tiny business optimal index. Otherwise, we’ll get UK unemployment for March and the German ZEW survey for May.