US stocks were pressured and yields climbed on strong PMI data - Newsquawk Asia-Pac Market Open

US stocks were pressured and futures gave back the early Nvidia-inspired gains with headwinds from the upside in yields after the hot services PMI data which underpinned the dollar and dragged equities lower. The selling in stocks accelerated once European desks packed for the day with little fresh fundamentals driving the move, although it is worth noting that there could perhaps be some early month-end rebalancing ahead of the long weekend with US and UK markets shut next Monday.
USD strengthened and climbed to above the 105.00 level with support seen after hotter-than-expected US Flash PMI data which was led by the services sector and extended once European players left for the day.
Looking ahead, highlights include New Zealand Trade Data, UK GfK Consumer Confidence, Japanese CPI, Malaysian CPI, Singapore Industrial Production, Supply from Australia & Japan.

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LOOKING AHEAD

Highlights include New Zealand Trade Data, UK GfK Consumer Confidence, Japanese CPI, Malaysian CPI, Singapore Industrial Production, Supply from Australia & Japan.
Click here for the Newsquawk Week Ahead.

US TRADE

US stocks were pressured and futures gave back the early Nvidia-inspired gains with headwinds from the upside in yields after the hot services PMI data which underpinned the dollar and dragged equities lower. The selling in stocks accelerated once European desks packed for the day with little fresh fundamentals driving the move, although it is worth noting that there could perhaps be some early month-end rebalancing ahead of the long weekend with US and UK markets shut next Monday.
SPX -0.74% at 5,267, NDX -0.44% at 18,623, DJIA -1.53% at 39,869, RUT -1.60% at 2,048.
Click here for a detailed summary.

NOTABLE HEADLINES/EARNINGS

Fed's Bostic (voter) said the last couple of inflation numbers suggest it's going back to 2%, but going slow, while he added that households and homeowners locked in low rates which limits the sensitivity of the economy to Fed policy rate hikes.
The OCC announced enforcement action against Comerica (CMA) and said it found unsafe or unsound practices including those relating to the bank's risk governance framework and internal controls.

DATA RECAP

US S&P Global Manufacturing PMI Flash (May) 50.9 vs. Exp. 50.0 (Prev. 50.0)
US S&P Global Services PMI Flash (May) 54.8 vs. Exp. 51.3 (Prev. 51.3)
US S&P Global Composite Flash PMI (May) 54.4 vs. Exp. 51.1 (Prev. 51.3)
US New Home Sales-Units (Apr) 0.634M vs. Exp. 0.679M (Prev. 0.693M, Rev. 0.665M)
US Initial Jobless Claims 215k vs. Exp. 220k (Prev. 222k, Rev. 223k)
US Continued Jobless Claims 1.794M vs. Exp. 1.794M (Prev. 1.794M, Rev. 1.786M)
US KC Fed Manufacturing (May) -1.0 (Prev. -13.0)
US KC Fed Composite Index (May) -2.0 (Prev. -8.0)

FX

USD strengthened and climbed to above the 105.00 level with support seen after hotter-than-expected US Flash PMI data which was led by the services sector and extended once European players left for the day.
EUR marginally softened against the firmer buck with early pressure seen following disappointing French PMI metrics although better results from Germany and in the Eurozone unwound some of the pressure.
GBP slightly weakened in which GBP/USD trickled beneath the 1.2700 level after mixed PMI data.
JPY was marginally pressured as US yields rose which briefly lifted USD/JPY above 157.00 before gradually pulling back.
CBRT maintained its Weekly Repo Rate at 50.00% as expected, while it reiterated that it remains highly attentive to inflation risks and the monetary policy stance will be tightened in case a significant and persistent deterioration in inflation is foreseen.

FIXED INCOME

Treasuries were lower with choppy price action seen following EZ PMI data before being hit on super strong services PMI in the US.

COMMODITIES

Oil prices declined for the fourth straight session amid the rising dollar in the wake of the Flash PMI data.
Oil loadings from Russia's western ports are seen at 2mln BPD in June which is little changed from May, according to Reuters citing sources who added that higher refinery runs or additional production cuts could lead to a decline in loadings.

GEOPOLITICAL

MIDDLE EAST

Israeli Defence Minister said they will reach their goal in Rafah which is to strip Hamas of its military capabilities, according to Al Arabiya.
Israeli government said no power on earth will stop Israel from protecting its citizens and going after Hamas in Gaza.
Israeli army announced the elimination of the commander of the Hamas Beit Hanoun Brigade, Hussein Fayyad, during operations in Jabalia, according to Sky News Arabia.
Israeli army radio said their forces are advancing in Rafah and have reached the outskirts of the Shaboura refugee camp, according to Al Arabiya.
It was initially reported that the Israeli position is still not qualified to reach a deal on the ceasefire and the release of hostages, according to Sky News Arabia. However, a separate report stated that Israel’s PM and ministers decided to expand the mandate of the negotiating team during the war cabinet meeting on Wednesday night, according to Axios' Ravid citing an Israeli senior official, although the official noted that it is not certain that it will be possible to achieve a breakthrough in the talks on the abductees deal.
All the heads of the establishment and negotiating team presented a united front regarding the need to act urgently to obtain a hostage deal, even at the cost of a willingness to discuss Hamas' latest proposal and make more compromises, according to Axios' Ravid.

OTHER

Russian Foreign Ministry said that Moscow will retaliate with strikes on UK targets in and beyond Ukraine if British weapons are used for strikes on Russian territory.
Russian President Putin signed a decree on a procedure for compensating Russia and its Central Bank for damage caused by the unfriendly actions of the US, according to TASS. Russian government commission will identify property and securities belonging to the US that could be used as compensation for damages, according to IFX.

ASIA-PAC

NOTABLE HEADLINES

Chinese President Xi is holding a seminar with firms and experts on deepening reforms, according to state media.
Chinese Premier Li said policy support for food production will only strengthen, not weaken, while he added that deepening of reforms will specialise on addressing deep system, institutional obstacles and structural conflicts.
BoJ Governor Ueda said a soft landing is a key issue for the global economy and there is no change of view on Japan's economic outlook despite the Q1 GDP contraction. Furthermore, he said the Q1 GDP contraction was largely due to auto output and he expects auto output to recover in Q2 onwards and for cost-push inflation to keep easing and underpin consumption.

EU/UK