Morning wrap (01.06.2023)

• Wall Street indices finished yesterday's trading lower but off the session lows. Dow Jones dropped 0.4%, S&P 500 and Nasdaq traded 0.6% lower and Russell 2000 plunged 1%

• Higher-than-expected JOLTS data yesterday led to a jump in Fed rate hike pricing and triggered a drop on stock markets. However, those moves were later reversed on the back of dovish Fed speak

• Fed members Jefferson and Harker strongly hinted that FOMC is in position to skip a rate hike at the coming meeting

• Wall Street Journal also reported, based on insider info, that holding rates unchanged at June meeting looks to be the base case scenario

• Indices from Asia-Pacific traded higher today. Nikkei gained 0.8%, S&P/ASX 200 moved 0.4% higher and Nifty 50 added 0.2%. Indices from China traded up to 1% higher. Kospi was a laggard and dropped 0.2%

• DAX futures point to a slightly higher opening of the European cash session today

• US House of Representatives passed a bill suspending the debt ceiling. Bill will now be put under the vote in Senate, where it is also expected to pass

• Chinese Caixin manufacturing PMI jumped from 49.5 to 50.9 in May (exp. 49.5)

• Japanese business capital expenditures in Q1 2023 increased 11% YoY (exp. 5.5% YoY)

• Australian capital expenditures increased 2.4% QoQ in Q1 2023 (exp. 1% QoQ)

• API report showed an unexpected 5.2 million barrel build in US oil inventories (exp. -1.0 mb)

• Energy commodities trade higher - oil gains around 1% while US natural gas prices climb 0.3%

• Precious metals gain - gold and silver trade 0.1% higher, platinum adds 0.6% and palladium surges 1.5%

• AUD and CAD are the best performing G10 currencies while JPY and NZD lag the most

EURUSD managed to recover part of yesterday's losses in the evening after dovish comments from Fed Harker and Jefferson. However, woes may not be over yet as the main currency pair launched today's trading lower. Source: xStation5