Intermarket: Market sentiment deteriorates on China's service PMI

China's Caixin Service PMI (May) came lower-than-expected, with growth slowing to a 3-month low, leading to a worsening of the slightly more constructive sentiment seen on Thursday, with the Nikkei 225 giving back the vast majority of its early gains, taking a toll on Yen crosses.

At present, the Nikkei 225 operates circa +0.17% at 16,585.00, while USD/JPY trades back below 109.00 after a 20 pips down-move from levels around 109.15. As per SP500 futures, a retracement off the highs is currenty underway, currently flat for the day at -0.02%, following a commanding bullish bounce yesterday.

Meanwhile, the USD index is holding steadier in Asia, mainly on a weakker Euro post the ECB monetary policy meeting. Copper, interesingly, is trending higher at present, last at 2.074, despite the stronger US Dollar, suggesting the underlying sentiment on industrial metals remains buoyant.

As per gold, following a sharp fall in early Asia, the precious metal is back at $1,210.00. Lastly, the 30-year US Treasuries yields continue to trade at fairly depressed levels, as the odds for a Fed rate hike in June were reduced to 20%, while a hike in July is still being priced at around 60%, according to CME Fed fund futures.