• US stocks finished mixed on what was a relatively rangebound and choppy session amid a lack of fresh major macro themes although gains were seen in the Mag-7 led sectors such as Communications, Tech and Consumer Discretionary, while Healthcare, Materials and Real Estate were at the other end of the spectrum with the latter pressured, as was the small-cap Russell 2000, amid the continued upside in US yields.
• USD saw two-way price action and ultimately clawed back its initial losses with the DXY returning to above the 101.00 level, while the rebound was facilitated as US yields edged higher and as a Bloomberg report noted that the "US are not looking to weaken the Dollar as part of trade deals". Furthermore, there were reports of further deals from President Trump's Middle East trip with a USD 1.2tln economic commitment from Qatar, while the latest Fed comments from Goolsbee and Jefferson had little impact with the latter noting Q1 GDP data overstated deceleration in activity.
• Looking ahead, highlights include Australian MI Inflation Expectations & Jobs Data, Supply from Japan.

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LOOKING AHEAD

• Highlights include Australian MI Inflation Expectations & Jobs Data, Supply from Japan.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks finished mixed on what was a relatively rangebound and choppy session amid a lack of fresh major macro themes although gains were seen in the Mag-7 led sectors such as Communications, Tech and Consumer Discretionary, while Healthcare, Materials and Real Estate were at the other end of the spectrum with the latter pressured, as was the small-cap Russell 2000, amid the continued upside in US yields.
• SPX +0.10% at 5,983, NDX +0.57% at 21,319, DJI -0.21% at 42,051, RUT -0.88% at 2,084.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump received a USD 1.2tln economic commitment from Qatar, while Saudi Aramco announced 34 MOUs and agreements with US companies with a potential value worth around USD 90bln.
• US Treasury Secretary Bessent and USTR Greer are engaged with China to stop fentanyl.
• Trade-tariff deals with Japan and South Korea are said to be “close” although the timing is unclear and India deal as well but has been throttled by the tensions with Pakistan, according to Fox's Gasparino citing Wall St sources close to the White House.
• China’s Commerce Ministry said China paused the unreliable entity list measure on 17 US entities.
• China's Foreign Minister welcomes more Mexican products into China's market and China will encourage Chinese businesses to invest in Mexico.
• US is not seeking to weaken USD as part of trade deals, according to a source.

NOTABLE HEADLINES

• Fed's Goolsbee (2025 voter) said that some part of April inflation represents the lagged nature of data and the Fed is still holding its breath, while it will take time for current inflation trends to show up in the data. Furthermore, he said right now is a time for the Fed to wait for more information and try to get past the noise in the data.
• Fed's Jefferson (voter) said current moderately restrictive policy rate is in a good place to respond to economic developments and Q1 GDP data overstated the deceleration in activity, while recent inflation data is consistent with further progress toward 2% goal, but the future path is uncertain due to tariffs.
• US House Speaker Johnson believes it could take until the weekend to get a deal on a new SALT cap, according to Punchbowl's Sherman.

FX

• USD saw two-way price action and ultimately clawed back its initial losses with the DXY returning to above the 101.00 level, while the rebound was facilitated as US yields edged higher and as a Bloomberg report noted that the "US are not looking to weaken the Dollar as part of trade deals". Furthermore, there were reports of further deals from President Trump's Middle East trip with a USD 1.2tln economic commitment from Qatar, while the latest Fed comments from Goolsbee and Jefferson had little impact with the latter noting Q1 GDP data overstated deceleration in activity.
• EUR failed to sustain early gains against the dollar and reverted to below the 1.1200 level, while there was a lack of surprises from the final CPI data from Germany and Spain which all matched their preliminary figures.
• GBP reversed its initial advances and gave back the 1.3300 status as the dollar recovered, with participants now awaiting UK GDP data.
• JPY outperformed which dragged USD/JPY briefly beneath the 146.00 handle before bouncing off lows as the dollar regained composure.

FIXED INCOME

• T-notes settled lower after yields continued to gain with 2yr yields at the highest level since March as participants dialled back further Fed rate cut bets for 2025.

COMMODITIES

• Oil prices were lower with traders citing profit taking after the recent upside and with the latest inventory data showing a surprise build in headline crude stockpiles, while the attention turns to Ukraine/Russia talks on Thursday with Russia remaining tight-lipped on whether President Putin will be attending or not.
• US EIA Weekly Crude Stocks w/e 3.454M vs. Exp. -1.078M (Prev. -2.032M)
• OPEC MOMR stated that 2025 and 2026 global oil demand growth forecasts were maintained at 1.3mln BPD each and supply growth forecasts were cut to 0.8mln BPD (prev. 0.9mln BPD).
• Libya's Sirte Oil Company said it suspended land transportation to the western region due to deteriorating security conditions.
• Kazakhstan's oil output fell 3% in April from March to 1.82mln BPD but remained above the OPEC+ quota, according to Reuters calculations.
• Russia's government is considering extending restrictions on gasoline exports for two months until the end of October. It was separately reported that Russia and Egypt are discussing the construction of LNG terminals in Egypt, while Russia is also reportedly discussing the possibility of supplying Russian LNG to Malaysia.

GEOPOLITICAL

MIDDLE EAST

• Israeli PM Netanyahu said French President Macron is standing with Hamas and that Israel is sticking to its war aims, releasing hostages, defeating Hamas, and ensuring Gaza poses no threat.
• No progress has been made in the talks being held by US envoy Witkoff in Doha regarding the hostage deal and an Israeli official said that PM Netanyahu has so far shown “zero flexibility” when it comes to changes to the Witkoff outline, according to Axios's Ravid on X.
• US President Trump said the US wants to do a deal with Iran and reiterated that Iran cannot have a nuclear weapon. Trump separately commented that Qatar is working with the US on negotiating an Iran deal and he wants to see Iran thrive.
• US issued new Iran-related sanctions which target individuals in China and Iran.

RUSSIA-UKRAINE

• Ukrainian President Zelensky said he is waiting to see who will represent Russia at proposed talks in Turkey and then will decide on Ukraine's next steps.
• US President Trump said he does not know whether Russian President Putin will attend Ukraine peace talks, while he added they are always considering secondary sanctions on Russia. Trump separately commented that there may be news on Russia/Ukraine today.
• US Special Envoy Witkoff said he and Secretary of State Rubio will travel to Istanbul on Friday but is unsure if Russian President Putin will attend.

ASIA-PAC

NOTABLE HEADLINES

• PBoC said China and the EU had in-depth exchanges on global economic uncertainties and discussed optimising market access. It was also reported that China's market regulator held a meeting on supporting individual business owners.

EU/UK

NOTABLE HEADLINES

• ECB's Nagel said there is a good probability the inflation target will be maintained, while he added the current uncertainty will be the new "normal" and central banks have to get used to managing it.
• ECB supervisors step up checks on banks' dollar funding on Trump concerns and some of the EU's largest banks are assessing unprecedented scenarios of the Fed not providing dollars.