MNI US OPEN - Indonesia Hike Latest Sign of APAC Activism
EXECUTIVE SUMMARY
- HOUSE TO VOTE ON IMMIGRATION BILL, GOP DISCUSSES RECONCILLIATION 3.0
- ISRAEL HALTS IRAN STRIKES AFTER TRUMP CLAIMS PROGRESS TOWARD NUCLEAR TALKS
- LATEST BOJ PRESS REPORTS REAFFIRM JUNE HIKE/JGB BUYING DISCUSSIONS
- INDONESIA BOLSTERS CURRENCY DEFENSE WITH SURPRISE RATE HIKE
- CHINA EXPORTS TOP EXPECTATIONS AS IMPORTS SURGE
Figure 1: Bank Indonesia surprise rate hike seeks to halt USD/IDR rally
Source: MNI, Bloomberg Finance L.P.
NEWS
US (MNI): House to Vote on Immigration Bill, GOP Discusses Reconcilliation 3.0
The House of Representatives will vote today on the Senate-passed USD$69.5 billion reconciliation package to fund ICE and Border Patrol through the end of President Donald Trump's term. First votes are expected at 13:30 ET 18:30 BST. While the bill is expected to pass, final consideration may be delayed by last-minute negotiations with members who have yet to reveal if they will vote 'yes' to advance the bill. Meanwhile, Republican leaders have begun preparing for a third reconciliation bill, to be fast-tracked through Congress before the midterm elections in November. A third party-line bill is a long shot, but likely the last opportunity to legislate GOP priorities during Trump's second term.
US/MIDEAST (NYT): Israel Halts Iran Strikes After Trump Claims Progress Toward Nuclear Talks, Officials Say
President Trump called Israel’s prime minister, Benjamin Netanyahu, on Monday morning and persuaded him to halt further military strikes against Iran, telling him that Washington and Tehran were within days of a breakthrough clearing the way for talks on a long-term nuclear deal. The call came after tit-for-tat strikes had briefly jeopardized a two-month cease-fire, and brought the Middle East back to the precipice of full-blown war. Mr. Trump has repeatedly said that the United States and Iran were drawing near an agreement that would bring the sides back to the table for long-term negotiations over Iran’s nuclear program, and it is not clear that they are actually any closer at the moment. But the situation became more complicated when Iran and Israel traded fire over the last two days.
CORPORATE (WSJ): OpenAI Files to Go Public in Test of Investor Appetite for Top AI Startups
OpenAI, which kick-started the artificial-intelligence boom with the 2022 release of ChatGPT, is officially preparing to stage an initial public offering that will test investor appetite for AI companies. The company led by Sam Altman confidentially filed IPO paperwork with the Securities and Exchange Commission, the startup said in a written statement. The filing sets up the company to potentially go public as soon as this fall, though OpenAI said it hasn’t yet decided on timing. OpenAI said in a written statement on Monday that “it may be a while” until it goes public because there are “things we want to do that are likely easier as a private company.” There are a “complicated set of tradeoffs” tied to going public, it said, without elaborating further.
SECURITY (MNI): German-Led Alliance Looks to Replace Doomed Franco-German FCAS Jets - FT
Following the collapse of the Franco-German initiative to develop a next-generation fighter jet, the FT reports that a German-led alliance is planning to create an alternative. In a major blow to French President Emmanuel Macron, who had long advocated for the EUR100bln Future Combat Air System (FCAS), Politico reported on 8 June a German gov't official stating "...Macron and the Federal Chancellor [Friedrich Merz] have come to the shared conclusion that the companies involved will not be able to come together to build a joint fighter jet. [...] Merz has therefore advised President Macron not to pursue the development of a joint fighter jet any further".
UK (MNI INTERVIEW): UK Growth Seen Lower, But Rates on Hold - CBI
MNI talks to the chief economist of leading UK business lobby group. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
BOJ (MNI): Latest Press Reports Reaffirm June Hike/JGB Buying Discussions
The latest Nikkei sources piece reaffirms the idea that the BoJ will discuss an end to its quarterly reduction in bond buying at the upcoming monetary policy meeting, along with hiking its policy rate to 1.00%. Meanwhile former BoJ Executive Director, Hideo Hayakawa, tells Bloomberg that the Bank is likely to follow up a June hike with further tightening in October "at the earliest". He suggests that "the BoJ is already falling behind the curve a little, so they need to catch up at some point." ~23bp of tightening is priced for next week's monetary policy decision, with 37.5bp of hikes priced through October (50% odds of another hike being delivered through that meeting).
JAPAN (BBG): Katayama Says Japan’s Budget Reform the Biggest Since 1945
Japanese Finance Minister Satsuki Katayama cast the government’s push to reduce reliance on extra budgets as the country’s greatest budgetary reform since the end of World War II. “As for budget system reform, this is clearly the biggest overhaul since the end of the war,” Katayama told reporters in Tokyo, following Tuesday’s cabinet meeting. “That’s the level of commitment we’re bringing to it.”
JAPAN (MNI EXCLUSIVE): BOJ Sees Strong CPGI Supporting Inflation
MNI discusses the BOJ's CPI view. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
INDONESIA (BBG): Indonesia Bolsters Currency Defense With Surprise Rate Hike
Indonesia’s central bank announced a surprise interest rate hike, seeking to halt a currency freefall that risks stoking inflation. Bank Indonesia lifted the benchmark BI-Rate by 25 basis points to 5.5% on Tuesday, more than a week ahead of its next scheduled meeting. The central bank has now raised the rate by 75 basis points over three weeks, following a larger-than-expected 50 basis-point hike in May. “This increase is a follow-up measure to strengthen the stabilization of the rupiah exchange rate against the impact of heightened global volatility caused by the war in the Middle East,” the central bank said in a statement. It added that the move is also “a preemptive step to keep inflation in 2026 and 2027 within the government’s target range.”
CHINA (BBG): China Prepares $295 Billion Plan to Fund Nationwide AI Buildout
China is preparing to spend around 2 trillion yuan ($295 billion) over the next five years on building data centers across the country, fueling Beijing’s ambition to propel the domestic AI sector and surpass the US in a potentially game-changing technology. Key government agencies including the National Development and Reform Commission are drafting a blueprint to erect a network of inter-connected computing hubs across the country, people familiar with the matter said. State firms such as China Mobile Ltd. and China Telecom Corp. will operate the bulk of the data centers and ensure they’re connected, one of the people said. The idea is to rely on local suppliers including Huawei Technologies Co. for at least 80% of technology such as AI chips, effectively squeezing out Nvidia Corp. and Advanced Micro Devices Inc., the people said.
CHINA/N.KOREA (BBG): Xi Pledges Deeper Ties With Kim While Avoiding Nuclear Issue
President Xi Jinping vowed to expand China’s trade, agriculture and technology cooperation with North Korea, while avoiding public mentions of its neighbor’s nuclear program in a meeting with Kim Jong Un in Pyongyang. In comments made Monday in the North Korean capital, Xi pledged “unwavering support” for Kim, saying China is ready to “expand practical cooperation in areas including economy and trade, agriculture, construction, science and technology, and medical and health care,” according to China’s state news agency Xinhua.
S.KOREA (BBG): Korea Upgrades Economic Growth, Reinforcing BOK Hawkish Shift
South Korea’s economy grew faster at the start of the year than initially estimated, reinforcing the central bank’s increasingly hawkish stance as an artificial intelligence-led export boom fuels business activity. Gross domestic product expanded 1.8% in the January-March period from the previous three months, a tad faster than the preliminary estimate of 1.7%, according to Bank of Korea data released Tuesday. The reading marked the strongest pace of quarterly growth since the fourth quarter of 2021 and topped the median estimate in a Bloomberg survey.
DATA
GERMANY DATA (MNI): Little Impetus From IP in April
- GERMANY APR IND PROD -0.5% Y/Y (-3.4% MAR, REV FROM -2.8%)
- GERMANY APR IND PROD 0.4% M/M (-0.1% MAR, REV FROM -0.7%)
German industrial production was as expected in April, coming in at 0.4% but a March revision has to be accounted for positively (0.4% cons; -0.1% March, revised from -0.7%). This follows weaker (Eurozone-driven) factory orders data yesterday. On a broader scale, the IP series remains close to its cycle lows. "The less volatile three-month on three-month comparison showed that production was 0.5% lower in the period from February 2026 to April 2026." "Industry excluding energy and construction remained unchanged (0.0%) compared with March"
UK DATA (MNI): BRC Retail Sales Rebound in May, Helped by Warm Weather
- UK MAY BRC TOTAL RETAIL SALES 3.7% Y/Y (-3.0% APR)
BRC retail sales growth rebounded to 3.7% Y/Y in May (-3.0% Apr, 3.6% Mar), after the prior two months were distorted by base effects relating to Easter timing. Across March and April together, retail sales had grown 1.5Y Y/Y, so this is still a decent acceleration in May. Growth here was led by food sales, alongside a decent pickup in clothing and household appliances, with the latter helped by May's record-breaking heat. Food sales increased 3.9% Y/Y in May (-2.5% Apr, 6.8% Mar), which the press release attributes in part to the bank holidays and warmer weather. "The late May bank holiday heatwave boosted shopper activity, driving sales growth in the final week of the month."
SWEDEN DATA (MNI): Business Survey Argues for Near-Term Patience; Willingness to Act Later in ‘26
Overall, the Riksbank's Business Survey should argue in favour of a continued patient approach to policy tightening. There remains uncertainty around the extent to which selling prices will increase in response to higher costs, and for some companies "there is room to absorb some of the cost increases for a period of time". The activity/labour market backdrop also supports this approach. The survey notes that while the war "does not seem to have significantly affected the current economic outlook.it risks posing a new challenge to the recovery." Furthermore, "companies are holding off on both recruitment and staff cuts."
CHINA DATA (MNI): Exports Top Expectations as Imports Surge
- CHINA MAY TRADE SURPLUS +$105.43 BLN VS MEDIAN +$92.60 BLN
- CHINA MAY EXPORTS +19.4% Y/Y VS MEDIAN +15.0% Y/Y
- CHINA MAY IMPORTS +27.4% Y/Y VS MEDIAN +26.5% Y/Y
Those still holding reservations about the growing strength of China's economy may be revisiting their view on rates as May's export numbers topped expectations. May exports jumped +19.4% YoY in USD terms topping the April expansion of +14.1%. Imports surged also up +27.4% above April's expansion of +25.3%. Exports to the US jump +35.6% YoY to US$39bn whilst Imports from the US rose +20.2% to US$13bn. The accompanying trade surplus widened to US$26bn from $23bn in April. China's export sector, driven by surging global demand for high-tech products, is expected to remain robust in the second half, which will provide strong support for the country's economic growth as the recent thaw in trade relations between China and US could help reduce uncertainty over external demand in the months to come.
AUSTRALIA DATA (MNI): NAB Business Survey - Upside Inflation, Downside Growth Risks
There seemed some stabilisation in the private sector in May with NAB business conditions stable at +3 and confidence improving substantially to -14 from -23. However, Q2 averages are signalling growth slowed in the quarter. Price/cost increases moderated from April but remained elevated compared to pre-Iran War rates and are signalling upside risks to Q2 CPI. The RBA remains alert to signs of a greater or faster pass through of higher costs to consumers and while the NAB survey shows some easing in the size of price rises they remain inconsistent with the inflation target.
FOREX: USD Index Only Modestly Lower, Holding Bulk of Post-NFP Advance
- The Dollar index sits moderately lower on Tuesday, reflective of President Donald Trump saying on Tuesday that he was in the "final throes" of reaching a peace deal in the Middle East. While the cross-asset impact is displaying this renewed cautious optimism, the greenback adjustment has been relatively small. The DXY remains within 30 pips of yesterday’s recovery high as the market continues to digest the strong US data and increased chances of a fed hike this year.
- Lower energy prices and higher equities have assisted NZD back firmly above 0.5800 following the aggressive reversal last week that saw NZDUSD erode the entirety of the post RBNZ advance.
- Sterling also outperforms today after yesterday’s GBPUSD low print came within 3 pips of the key support at 1.3303, the May 18 low. The pair has drifted back to 1.3380 ahead of the NY crossover.1.33 will remain in focus ahead of June 18 which remains a pivotal date for GBP, given it is the BOE meeting and the Makerfield by-election, with added potential to stoke political and fiscal uncertainty in the UK.
- USDJPY has traded in a tight overnight range, consolidating above the 160.00 mark. Despite last month’s intervention, spot remain uncomfortably close to pre-intervention highs of 160.72. Positioning and price action signals the market's doubts around the ultimate feedthrough of the MOF’s efforts.
- Separately, the BOJ will consider halting its quarterly reductions in bond buying from April 2027 according to matching overnight sources reports, with an updated plan to be laid out at next week's meeting alongside an expected rate hike.
- ADP Weekly Employment Change, trade data, existing home sales, and wholesale trade are scheduled in terms of data. ECB's Moulin is scheduled to appear but is unlikely to speak on monetary policy as per the ECB's pre-decision quiet period; the FOMC also remains in blackout.
EGBS: 2023 Highs May Contain Topside in 5-Year Bobl Yields
Concerns around medium-term Eurozone growth prospects against the backdrop of the energy shock and ECB rate hikes could contain topside in 5-year Bobl yields. Bobl yields are currently 2.77%, having reached a multi-year high of 2.90% on May 19. That means the September 2023 high of 2.93% has been untested through the duration of the Iran war.
- Intraday, the curve has twist steepened, with Schatz yields down 3bps at 2.68% and 30-year yields up 1bp to 3.60%.
- Bund futures are +6 ticks at 125.33, recovering from overnight lows of 125.04. Initial firm resistance is not seen until 126.11 (June 3 high).
- Sovereign supply has been the main point of interest today: The EU and Italy are both holding dual tranche syndications, while conventional supply has come from the Netherlands, Austria and Germany. Finland will also sell bonds at 1100BST
- 10-year EGB spreads to Bunds are up to 1.5bps narrower on the session.
- German April industrial production was in line with expectations at 0.4% M/M, but annual growth remains tepid at -0.5% Y/Y. Both import and export growth were stronger than consensus.
- Regional focus remains on Thursday’s ECB decision, where a hike is unanimously expected and fully priced.
Figure 2: 5-year Bobl yields
EQUITIES: Trend Signals in EuroStoxx Futures Continue to Point North
Trend signals in EuroStoxx 50 futures are pointing north, highlighted by moving average studies that remain in a bull-mode position. The recent pause appears to be a flag formation - a bullish continuation pattern. A resumption of gains would pave the way for a climb towards 6200.00 next. Firm support lies at 5922.78, the 50-day EMA. A clear break of the average would undermine the bull theme. The trend in S&P E-Minis is bullish and short-term pullback’s appear corrective. Friday’s move down resulted in the break of an important short-term support at 7467.60, the 20-day EMA. The clear breach of this average suggests scope for a deeper short-term retracement towards 7285.93, the 50-day EMA. Note that the 50-day EMA is considered a key support. Key resistance and the bull trigger is 7632.25, the Jun 1 high.
- Japan's NIKKEI closed higher by 1392.03 pts or +2.17% at 65416.63 and the TOPIX ended 43.73 pts higher or +1.14% at 3896.11.
- Elsewhere, in China the SHANGHAI closed higher by 50.693 pts or +1.28% at 4010.031 and the HANG SENG ended 91.16 pts lower or -0.37% at 24565.9.
- Across Europe, Germany's DAX trades higher by 127.06 pts or +0.52% at 24744.12, FTSE 100 lower by 28.99 pts or -0.28% at 10345.21, CAC 40 up 68.57 pts or +0.84% at 8267.38 and Euro Stoxx 50 up 54.75 pts or +0.9% at 6116.91.
- Dow Jones mini up 70 pts or +0.14% at 50926, S&P 500 mini up 25.25 pts or +0.34% at 7441.5, NASDAQ mini up 190.75 pts or +0.65% at 29644.25.
Time: 10:00 BST/05:00 ET
COMMODITIES: WTI Futures Back Below 50-Day EMA Support
The trend condition in WTI futures is unchanged, it remains bullish and recent weakness appears corrective. A key area of support to watch is $90.59, the 50-day EMA. The contract has traded through it, a clear breach is required to highlight a top and the start of a stronger correction. This would open $77.22, the Apr 17 low. For bulls, key resistance has been defined at $105.21, the May 18 high. Clearance of this hurdle would resume the primary uptrend. A bear theme in Gold remains intact - moving average studies are in a bearish mode position, and this continues to highlight a dominant downtrend. A sharp sell-off on Friday reinforces this condition and signals scope for an extension towards the next key support at $4099.2, the Mar 23 low. A clear break of this level would highlight an important medium-term bearish development. Initial resistance is seen at $4501.0, the 20-day EMA.
- WTI Crude down $2.05 or -2.25% at $89.27
- Natural Gas up $0.04 or +1.11% at $3.182
- Gold spot down $1.54 or -0.04% at $4328.59
- Copper up $6.85 or +1.08% at $641.75
- Silver up $0.26 or +0.39% at $68.4419
- Platinum up $4.57 or +0.26% at $1763.35
Time: 10:00 BST/05:00 ET
| Date | GMT/Local | Impact | Country | Event |
| 09/06/2026 | 1200/0800 | * |  US | NY Fed SOFR |
| 09/06/2026 | 1215/0815 | *** | US | ADP Employment Report |
| 09/06/2026 | 1230/0830 | ** | US | Trade Balance |
| 09/06/2026 | 1230/0830 | ** |  CA | International Merchandise Trade (Trade Balance) |
| 09/06/2026 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 09/06/2026 | 1300/0900 | * | US | NY Fed EFFR |
| 09/06/2026 | 1400/1000 | *** | US | NAR existing home sales |
| 09/06/2026 | 1400/1000 | ** | US | Wholesale Trade |
| 09/06/2026 | 1530/1130 | ** | US | US Treasury Auction Result for 52 Week Bill |
| 09/06/2026 | 1700/1300 | *** | US | US Note 03 Year Treasury Auction Result |
| 10/06/2026 | 0130/0930 | *** |  CN | CPI |
| 10/06/2026 | 0130/0930 | *** | CN | Producer Price Index |
| 10/06/2026 | 0600/0800 | ** |  SE | Private Sector Production m/m |
| 10/06/2026 | 0600/0800 | *** |  NO | CPI Norway |
| 10/06/2026 | 0700/0300 | *** |  CZ | Czech Republic Final CPI |
| 10/06/2026 | 0800/1000 | * |  IT | Industrial Production |
| 10/06/2026 | 1100/0700 | ** | US | MBA Weekly Applications Index |
| 10/06/2026 | 1200/0800 | * | US | NY Fed SOFR |
| 10/06/2026 | 1230/0830 | *** | US | CPI |
| 10/06/2026 | 1300/0900 | * | US | NY Fed EFFR |
| 10/06/2026 | 1345/0945 | *** | CA | Bank of Canada Policy Decision |
| 10/06/2026 | 1430/1030 | CA | BOC Press Conference | |
| 10/06/2026 | 1430/1030 | ** | US | US DOE Petroleum Supply |
| 10/06/2026 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 10/06/2026 | 1700/1300 | ** | US | US Note 10 Year Treasury Auction Result |
| 10/06/2026 | 1800/1400 | ** | US | Treasury Budget |
| 10/06/2026 | - | *** | CN | Money Supply |
| 10/06/2026 | - | *** | CN | New Loans |
| 10/06/2026 | - | *** | CN | Social Financing |
