Weekend News Round Up - Newsquawk Asia-Pac Market Open

• US stocks finished mostly higher on Friday as participants digested a dovish NFP report in which the headline came in above expectations at 206k (exp. 190k), although the prior saw a chunky revision lower to 218k from 272k, while the Unemployment Rate surprised to the upside at 4.1% (exp. 4.0%, prev. 4.0%) to surpass the Fed's median 2024 projection of 4.0% and earnings were in line with expectations but softened from the prior month. The downward revisions and rising unemployment rate sparked a dovish reaction with both stocks and bonds firmer on the session while the buck was hit.
• French pollsters’ initial projection shows the left-wing New Popular Front alliance is projected to win the most seats in the second round of the French parliamentary election but fall short of an absolute majority, while President Macron’s centrist bloc is seen to win the second-most number of seats followed by the far-right National Rally in third place in a shock win for the left-wing coalition with France set for a hung parliament.
• Israeli PM Netanyahu said any Gaza deal must allow Israel to continue fighting until all war objectives are met and the deal must not allow weapon smuggling to Hamas via the Gaza-Egypt border. Netanyahu added that thousands of armed militants cannot return to northern Gaza under the deal and that the proposal to which Israel agreed allows the return of hostages without compromising war objectives, according to Reuters.
• Looking ahead, highlights include Japanese Labour Cash Earnings, Current Account & Eco Watchers Survey, Australian Home Loans.

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LOOKING AHEAD

• Highlights include Japanese Labour Cash Earnings, Current Account & Eco Watchers Survey, Australian Home Loans.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks finished mostly higher on Friday as participants digested a dovish NFP report in which the headline came in above expectations at 206k (exp. 190k), although the prior saw a chunky revision lower to 218k from 272k, while the Unemployment Rate surprised to the upside at 4.1% (exp. 4.0%, prev. 4.0%) to surpass the Fed's median 2024 projection of 4.0% and earnings were in line with expectations but softened from the prior month. The downward revisions and rising unemployment rate sparked a dovish reaction with both stocks and bonds firmer on the session while the buck was hit.
• SPX +0.55% at 5,567, NDX +1.02% at 20,392, DJI +0.17% at 39,376, RUT -0.49% at 2,027.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US President Biden said he is convinced he is the most qualified person to beat Donald Trump and has done ten major events since the debate, while he pointed to his successes when asked if he was the same man as he was when he took office three years ago. Biden also stated he is still in good shape and that no one has said he needs neurological and cognitive tests.
• US Democrat Rep. Schiff said either Biden has to win overwhelmingly or he had to pass the torch and that Kamala Harris could win overwhelmingly but Biden needs to make a decision, according to Reuters.
• US Senator Mark Warner was reportedly seeking to assemble a group of Democratic senators to ask President Biden to exit the race, according to sources cited by the Washington Post on Friday.
• WSJ's Timiraos said on Friday that the June jobs report creates a more interesting series of risk management questions for the Fed and that officials have downplayed trade-offs so long as employment growth was running above expectations.

DATA RECAP

• US Non-Farm Payrolls (Jun) 206.0k vs. Exp. 190.0k (Prev. 272.0k, Rev. 218k); two month net revisions -111k (prev. -15k)
• US Unemployment Rate (Jun) 4.1% vs. Exp. 4.0% (Prev. 4.0%)
• US Average Earnings YY (Jun) 3.9% (3.86% to two decimal places) vs. Exp. 3.9% (Prev. 4.1%)

COMMODITIES

• NHC said Beryl is forecast to strengthen to a hurricane again before landfall and a storm surge warning was extended along the Texas coast. NHC also announced that a hurricane warning is in effect for the Texas coast from Baffin Bay northward to San Luis Pass and Galveston Island, as well as for the south of Baffin Bay to the mouth of the Rio Grande River, according to Reuters.
• Citgo began cutting production at its Corpus Christi, Texas refinery (165k bpd) ahead of Beryl but plans to keep the refinery running at minimum rates during the storm, according to sources cited by Reuters. It was later reported that the Port of Corpus Christi announced the port was closed due to Beryl.
• A fire broke out at a gas pipeline in Crimea due to an accident although there were no casualties, according to Russia-installed officials.

GEOPOLITICAL

MIDDLE EAST

• Israeli PM Netanyahu said any Gaza deal must allow Israel to continue fighting until all war objectives are met and the deal must not allow weapon smuggling to Hamas via the Gaza-Egypt border. Netanyahu added that thousands of armed militants cannot return to northern Gaza under the deal and that the proposal to which Israel agreed allows the return of hostages without compromising war objectives, according to Reuters.
• A revised proposal on a Hamas-Israel deal stated talks on the release of Israeli hostages including soldiers will start in a 16-day period after the first phase and an agreement on a hostage release deal is to be concluded before the end of the fifth week of the second phase, according to a senior Hamas source. Furthermore, the revised proposal involves mediators to guarantee a temporary ceasefire, aid delivery, and the withdrawal of Israeli troops as long as indirect talks continue to implement the second phase, according to Reuters.
• Egypt is to host Israeli and American delegations to discuss outstanding issues in Gaza and a ceasefire agreement, according to senior sources cited by Al Qahera News TV. It was also reported that CIA Director Burns is expected to visit Cairo this week for Gaza ceasefire talks.
• An Israeli air strike on a school sheltering displaced Palestinians in Gaza’s Al-Nuseirat killed at least 13 people, while the Israeli military said its airstrike targeted militants in an area near a Gaza school. It was also reported that senior Hamas government official Ehab Al-Ghussein was killed by Israel’s air strike in Gaza City, according to Reuters.
• Moderate Pezeshkian beat his hard-line rival in the Iranian presidential race runoff, according to the interior ministry, while the vote is unlikely to result in a shift of policies but may shape the succession for Iran’s Supreme Leader Khamenei, according to Reuters.

OTHER

• Ukrainian security source said Ukrainian forces hit a Russian munitions depot in the Voronezh region using drones, while a state of emergency was introduced in some parts of the Voronezh region following the drone attack.
• China is developing a new stealth aircraft which will be a fifth-generation fighter jet with stealth function and is likely to be deployed on China’s third aircraft carrier the Fujian, according to Nikkei.
• Philippines President’s Office said Japan and the Philippines are to sign a reciprocal access agreement on July 8th.

ASIA-PAC

NOTABLE HEADLINES

• China’s auto manufacturers association is strongly dissatisfied with the EU Commission’s anti-subsidy tax rate, according to Reuters.
• Tokyo Governor Koike won re-election for a third term, according to exit polls cited by Reuters.
• A magnitude 6.18 earthquake hit the Bonin Islands, Japan region, according to GFZ.
• India’s government is to present the union budget to parliament on July 23rd.

DATA RECAP

• China FX Reserves (USD)(Jun) 3.222tln (Prev. 3.232tln)
• China Gold Reserves (USD)(Jun) 169.7bln (Prev. 171.0bln)

EU/UK

NOTABLE HEADLINES

• French pollsters’ initial projection shows the left-wing New Popular Front alliance is projected to win the most seats in the second round of the French parliamentary election but fall short of an absolute majority, while President Macron’s centrist bloc is seen to win the second-most number of seats followed by the far-right National Rally in third place in a shock win for the left-wing coalition with France set for a hung parliament. IPSOS initial projection sees the left-wing New Popular Front winning 172-192 seats, Macron’s centrists winning 150-170 seats and the far-right National Rally winning 132-152 seats vs 289 needed for an absolute majority. Furthermore, IFOP’s updated estimate is for the New Popular Front to win 180-205 seats, Macron’s centrists to win 164-174 seats, and National Rally to win 120-130 seats, while Elabe’s updated estimate is for the New Popular Front to win 178-205 seats, Macron’s centrists to win 157-174 seats, and National Rally to win 113-148 seats, according to Reuters.
• French Presidency said Macron will respect the choice of the French people and will wait for the full picture to emerge in parliament before taking the necessary next decisions, while it added that Macron is currently analysing the latest parliament election results.
• French PM Attal said no absolute majority can be formed by extreme parties after the parliamentary elections and his political camp has no majority, while he will offer his resignation to President Macron.
• French left-wing leader Melenchon said the election score is the result of a magnificent mobilisation effort and the far-right is from a majority, while he added Macron’s defeat is clearly confirmed and PM Attal must go, according to Reuters.
• French far-right National Rally’s Le Pen said she sees the seed of tomorrow’s victory in today’s results and their victory has merely been delayed, while she added that French President Macron’s situation is untenable, according to Reuters.