US TRADE

EQUITIES

US stocks were initially perky in the pre-market and rallied after the open, but then stumbled after US consumer confidence data missed expectations and highlighted deteriorating consumer expectations driven by concerns about high inflation, which were driving recessionary risks.

SPX -2.01% at 3,822, NDX -3.09% at 11,638, DJIA -1.56% at 30,947, RUT -1.86% at 1,738.

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NOTABLE HEADLINES

Fed's Williams (voter) said a recession is not his base case and expects GDP to grow 1.0% to 1.5% for the year. Williams also stated that they need to get to somewhat restrictive territory in 2023 and that a 75bps move in June was exactly right, while they will have a debate on 50bps or 75bps at the July meeting.

Fed's Daly (2024 voter) said the Fed can address inflation, at least partly, and the US will have slower growth but does not see a recession. Daly also stated supply is still short and made shorter by the war in Ukraine, while she added the Fed can reduce demand which is about half of the cause of inflation and that the Fed is tapping on the breaks to get to a more sustainable pace.

US CDC activated an emergency operations centre for response to Monkeypox, according to a statement.

Citi's prelim month-end FX hedge rebalancing flows suggested USD buying with the signal stronger than the historical average.