Weekend News Round Up - Newsquawk Asia-Pac Market Open

US stocks were choppy on month end with futures firmer in the premarket, with gains seen in the wake of the softer-than-expected Core PCE data
US President Biden on Friday said Israel has been offered a comprehensive new proposal; the new proposal has three phases, and has been offered to Hamas.
OPEC+ has agreed to extend its collective production cuts, which total around 3.6mln BPD, until the end of 2025 (prev. until the end of 2024). Additionally, the eight states that implemented voluntary cuts of 2.2mln BPD will extend these cuts until the end of Q3 2024 (prev. Q2 2024, exp. at least Q3 2024).
S&P cut France to AA- from AA; Outlook stable; downgrade on deterioration of budgetary position.
Looking ahead highlights include Australian, Japanese, and Chinese Final Manufacturing PMIs.

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3rd June 2024

SNAPSHOT

Click here for the Newsquawk Week Ahead.

US TRADE

US stocks were choppy on month end with futures firmer in the premarket, with gains seen in the wake of the softer-than-expected Core PCE data.
SPX +0.80% at 5,278, NDX -0.01% at 18,53, DJIA +1.51% at 38,686, RUT +0.66% at 2,070
Click here for a detailed summary.

NOTABLE HEADLINES

NVIDIA (NVDA) CEO said on Sunday that the Co. next-generation artificial intelligence chip platform, called Rubin, would be rolled out in 2026, according to Reuters.

NORTH AMERICAN DATA

US Core PCE Price Index YY (Apr) 2.8% vs. Exp. 2.8% (Prev. 2.8%); the 12-month change was 2.75%, a three-year low. 6-month annualized rate was 3.18%, the highest since July.
US Core PCE Price Index MM (Apr) 0.2% vs. Exp. 0.3% (Prev. 0.3%); Unrounded 0.249% (prev. 0.317%).
US PCE Price Index YY (Apr) 2.7% vs. Exp. 2.7% (Prev. 2.7%)
US PCE Price Index MM (Apr) 0.3% vs. Exp. 0.3% (Prev. 0.3%)Unrounded - US Core PCE M/M 0.249% (prev. 0.317%)
US Personal Income MM (Apr) 0.3% vs. Exp. 0.3% (Prev. 0.5%)
US Personal Consump Real MM (Apr) -0.1% (Prev. 0.5%, Rev. 0.4%)
US Consumption, Adjusted MM (Apr) 0.2% vs. Exp. 0.3% (Prev. 0.8%, Rev. 0.7%)
US Chicago PMI (May) 35.4 vs. Exp. 41.0 (Prev. 37.9)
Canadian GDP QQ Annualized (Q1) 1.7% vs. Exp. 2.2% (Prev. 1.0%, Rev. 0.1%)

FX

The DXY declined throughout the session, dipping beneath its 200DMA at 104.425 in the wake of the US Core PCE release.
The Euro was slightly firmer in Friday’s session, initially weakening in the session.
Cyclical currencies experienced a mixed session.
The Yen and Yuan both underperformed in FX against the greenback. The Yuan was weighed on after China’s contractionary PMI result

FIXED INCOME

Treasuries caught a bid on Friday after soft PCE and woeful Chicago PMI.
T-NOTE FUTURES (U4) SETTLE 8 TICKS HIGHER AT 108-25+

COMMODITIES

WTI and Brent on Friday chopped to US data ahead of OPEC+. Peaks were seen on Friday in the wake of the softer-than-expected US Core PCE report.

OPEC+

OPEC+ has agreed to extend its collective production cuts, which total around 3.6mln BPD, until the end of 2025 (prev. until the end of 2024). Additionally, the eight states that implemented voluntary cuts of 2.2mln BPD will extend these cuts until the end of Q3 2024 (prev. Q2 2024, exp. at least Q3 2024), after which they will gradually increase production from October 2024 to September 2025, contingent on market conditions.
Additionally, the UAE has been permitted to increase its production by 0.3mln BPD from 2025, according to Reuters.
Baseline revisions have been pushed back a year to 2026. "That’s because some countries like Russia are under embargo and the independent companies are not able to have access to data to support the assessment process.", according to Energy Intelligent's Bakr.
"Under the agreement today there are no barrels that are immediately going to be added to the market. The partial return of the voluntary cuts in q4 this year is subject to market conditions. The agreement also does not stray away from the cautious path the group has been following. Even the possible return of the voluntary cuts is being done cautiously.", according to Energy Intelligent's Bakr.
Saudi Energy Ministry said 2.2mln bpd voluntary oil cuts are to be extended till September and to be gradually phased out on a monthly basis till Sept 2025, according to Reuters citing a statement. Saudi Energy Ministry said the gradual monthly phase-out may be reversed according to market conditions, and added OPEC meeting welcomes Iraq, Russia, and Kazakhstan's renewed commitment to adhere to OPEC production cuts. Saudi Energy Ministry says the OPEC meeting also welcomes Iraq, Russia, and Kazakhstan's plan to resubmit their updated compensation for overproduction since January 2024 before the end of June, the statement said.
Saudi Energy Minister said discussions among eight countries implementing voluntary cuts started two or three weeks ago, and "we are waiting for interest rates to come down, better trajectory of global growth, that would probably cause demand to increase with a clear path", according to Reuters. Saudi Energy Minister said some ministers gathered in Riyadh to make sure they interacted with each other and the message was comprehensively understood and agreed upon.

OTHER HEADLINES

Russia-China gas pipeline deal reportedly stalls over Beijing's price demands, according to the FT. China is said to have asked to pay prices close to Russia's subsidised domestic prices and would only commit to purchasing a smaller fraction of the Siberia 2 pipeline's annual capacity, sources said.
An oil refinery in northwest Russia near the city of Ukhta was operating normally after a fire broke out on Sunday, according to Reuters.
Magnitude 5.7 earthquake hit Antofagasta, Chile region, according to EMSC.

CRYPTO

US President Biden says he is vetoing congressional disapproval of US SEC bulletin on crypto-assets, according to Reuters.

GEOPOLITICS

ISRAEL-HAMAS

US President Biden on Friday said Israel has been offered a comprehensive new proposal; the new proposal has three phases, and has been offered to Hamas. Phase 1: Will last six weeks, with a complete ceasefire and withdrawal of Israeli forces from populated areas of Gaza. Phase 2: An exchange for the release of all remaining living hostages and Israeli forces will withdraw. Phase 3: A major reconstruction plan for Gaza.
Israeli PM aid confirmed on Sunday that Israel had accepted a framework deal for winding down the Gaza war being advanced by US President Biden, according to Reuters. The aid however described the plan as flawed and in need of much more work. The aid added that Israeli conditions, including "the release of the hostages and the destruction of Hamas" have not changed.
Hamas said they view US President Biden's latest proposal for a ceasefire as 'positive' and affirmed its readiness to deal positively with any proposal that offers a permanent ceasefire, complete withdrawal of Israeli forces from Gaza, reconstruction of the strip, return of displaced and a 'serious' hostage exchange, according to Reuters.
Qatar, the US, and Egypt jointly called on Hamas and Israel to finalise the agreement embodying the principles outlined by US President Biden, according to a joint statement.
Israeli Defence Minister said in any process to bring about the end of the war, Israel will not accept the rule of Hamas in Gaza, according to Reuters.
Israeli Finance Minister Smotrich called for the Gaza offensive to be pursued until Hamas is destroyed and all hostages are rescued, saying he would not stay in government otherwise, according to a post on X.
Israeli National Security Minister Ben-Gvir threatened to bring down the coalition government if PM Netanyahu agreed to a deal that would include ending the war without eliminating Hamas, according to a post on X.
US National Security spokesperson Kirby said the US has every expectation that if Hamas agrees to the proposal, then Israel will say yes, according to an ABC News interview.
Yemen's Houthis said they conducted six military operations including targeting US aircraft carrier and destroyer, and added they targeted 'Maina ship, Aloraiq ship and Abliani ship', according to Reuters.
US CENTCOM said On June 1, it destroyed one Iranian-backed Houthi uncrewed aerial system (UAS) in the southern Red Sea, and also observed two other UAS crash into the Red Sea. No injuries or damage were reported. Additionally, USCENTCOM forces successfully engaged two Houthi anti-ship ballistic missiles in the southern Red Sea, according to Reuters.
Israeli PM Netanyahu has accepted an invitation to address both houses of the US Congress, according to Reuters.

RUSSIA-UKRAINE

Ukrainian President Zelenskiy said he received a signal from China they will not take part in the peace summit, according to Reuters.
Russian Defence Ministry said Russia struck Ukraine's energy facilities working for the military-industrial complex, and hit depots with Western weapons, according to RIA.
Russia has announced plans to raise taxes on businesses and the wealthy amid the need for additional revenue to fund the war in Ukraine, according to Sky News.

CHINA-TAIWAN

Chinese Defence Minister, at the Shangri-La dialogue, said China will take resolute actions to curb Taiwan's independence and make sure such a plot never succeeds, and anyone who dares to separate Taiwan from China will only end up in self-destruction. He added China stays committed to peaceful reunification, however, this prospect is increasingly being eroded by separatists for Taiwan's independence and foreign forces, according to Reuters.
Taiwan government reiterated Taiwan has never been a part of the People's Republic of China and added that China has repeatedly openly threatened Taiwan with force at international events, whilst maintaining peace in the Taiwan Strait is the common responsibility of both sides of the strait, according to Reuters.

NORTH KOREA

North Korea is to temporarily suspend sending balloons carrying trash, but will resume if South Korea sends anti-North Korea leaflets, according to KCNA citing the North Korean Vice Defence Minister.

ASIA-PAC

Earthquake of intensity of 5 on Japan's 1-7 scale hits Japan's Ishikawa Prefecture; no tsunami warning issued, according to NHK.

EU/UK