MARKET WRAPS

Watch For:

No major economic data expected; trading update from Intermediate Capital Group

Opening Call:

Shares in Europe may open higher on Tuesday as investors await economic data for cues. In Asia, stock benchmarks were mixed; Treasury yields were little changed; the dollar weakened; while oil and gold gained.

Equities:

European stock futures were tracking higher early Tuesday. Trading volumes were light on Monday with U.S. equity and bond markets closed for Memorial Day and U.K. markets also shut for a holiday.

The Fed's preferred measure of inflation, the personal consumption expenditures price index, is due Friday, while inflation readings for the eurozone and Australia are also due. Several Fed and European Central Bank policymakers are also due to speak this week.

"A lot of the market's attention is focused on what central banks will do next," said Florian Ielpo, head of macro at Lombard Odier Investment Managers.

Conflicting data on growth and inflation has made markets more volatile, Ielpo said.

Forex:

The U.S. dollar weakened in Asia in possible position adjustment ahead of U.S. economic data due out later.

The Conference Board's consumer confidence for May could be key to monitor today, Maybank analysts said.

A softer-than-expected reading could potentially weigh on the greenback more as forex markets continue to be data-dependent, they said.

Investors may also focus on more possible clues on the Fed's rate path with Cleveland Fed President Loretta Mester due to speak on the topic of conventional and unconventional monetary policy instruments, Commonwealth Bank said.

Both Mester and Fed Gov. Michelle Bowman are scheduled to participate in a policy panel discussion this afternoon at the 2024 BOJ-IMES Conference.

Bonds:

U.S. Treasury yields were little changed early Tuesday following U.K. and U.S. holidays on Monday.

After Germany's Ifo business sentiment data on Monday, inflation data later this week will also provide key input ahead of the European Central Bank's rate decision on June 6, where a 25 basis point rate cut is nearly a done deal, rates strategists at Commerzbank said.

That said, last week's data, including the ECB's negotiated wage index, reduced the rate cut probability to 89% currently, according to Refinitiv.

Energy:

WTI crude oil futures were higher on prospects for OPEC+ to extend production cuts at its meeting on Sunday.

The recent weakness in oil prices is likely to reverse, partly owing to expected tightness in the oil balance in the coming quarters, OCBC's Global Markets Research & Strategy team said.

For the week, key focuses are the outcome from the OPEC+ Joint Ministerial Monitoring Committee meeting and the EIA weekly inventories report, they added.

Metals:

Gold edged higher in Asia. Prices were getting a lift from a more dovish tone from central banks, ANZ Research analysts said, adding that the European Central Bank isn't expected to rule out cutting rates at its June and July meetings.

A survey last Friday showed that U.S. consumers expect prices to rise less quickly than earlier in the month, ANZ analysts said.

"This raised hopes that the Fed's inflation gauge due out later this week will show further signs of price pressures easing," they added.

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Copper gained as investors watch China's property-sales data in top-tier cities after a major policy change, and inflation signals globally, Huarong Rongda Futures said.

The recent better-than-expected PMI figures in the U.S. and European countries indicate strong fundamentals supporting copper prices, it added.

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Iron ore futures rose, reversing Monday's losses in possible technical correction. Investors were likely weighing the recent property measures by China to stabilize the sector, which are likely to remain a welcome boost to sentiment, the ANZ research team said.

However, the measures are likely to have little effect in stimulating new projects which remain the key drivers for steel and iron ore demand, they added.


TODAY'S TOP HEADLINES

Switzerland's Central Bank Sold Apple Stock, and More. It Bought Virgin Galactic.

The central bank of Switzerland recently made some major adjustments in its portfolio of U.S.-listed equities.

The Swiss National Bank reduced its investment in Apple stock, slashed positions in Lucid Group and Shopify, and bought more shares of Virgin Galactic Holdings in the first quarter. The bank disclosed the trades, among others, in a form it filled with the Securities and Exchange Commission.


China Raises $48 Billion for Semiconductor Fund to Bolster Chip-Making Capabilities

SINGAPORE-China raised about $48 billion in its third installment of a national semiconductor fund, aiming to increase its chip-making capabilities in the face of an escalating technology competition with the U.S.

This latest financing round is the largest for the state-owned National Integrated Circuit Industry Investment Fund, created in 2014. Commonly known as the "Big Fund," it directs state support to build up the country's semiconductor-supply chain and has played an outsize role in its development.


ABN AMRO to Buy Private German Bank for EUR672 Million

ABN AMRO Bank has agreed to acquire a private bank in Germany for 672 million euros ($729.7 million), solidifying its position as one of the country's top three wealth-management firms.

The Dutch bank is acquiring Hauck Aufhauser Lampe, or HAL, from Chinese conglomerate Fosun International, ABN AMRO said Tuesday.


The Russian Drone Plant That Could Shape the War in Ukraine

Early last month, cellphone footage captured a Ukrainian unmanned aerial vehicle slowly winding toward its final destination in a new installment in the spreading drone wars-a drone itself was being used to hit a site where enemy drones were being made.

The target was a high-tech college and manufacturing complex in the Russian steppes where Moscow is aiming to scale up production of the weapons it needs to gain an advantage in Ukraine.


Write to singaporeeditors@dowjones.com


Expected Major Events for Tuesday

06:00/NOR: Apr Retail Sales

06:00/DEN: Apr Retail Sales Index

06:00/SWE: Apr Foreign trade

06:00/GER: Apr WPI

07:00/SVK: Apr PPI

08:00/AUT: May Austria Manufacturing PMI

09:00/CRO: 1Q Flash Estimate GDP

09:00/CRO: 1Q GDP

10:00/UK: May CBI Distributive Trades Survey

10:00/FRA: 1Q OECD trade statistics release

10:00/IRL: Apr Retail Sales Index

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This article is a text version of a Wall Street Journal newsletter published earlier today.


(END) Dow Jones Newswires

05-28-24 0015ET