Japanese yen sets records, geopolitics at the center of markets, corporate news

• The dollar rose to 159.94 yen in early trading, prompting the usual warnings from Japanese officials against "excessive" volatility, shorthand for intervention worries. The 160.00 level is seen as a red line for the Japanese, given that they intervened in late April when the dollar hit 160.245. The yen's weakness is adding to imported inflation and putting pressure on the Bank of Japan (BoJ) to further unwind its ultra-loose policies. Minutes from the central bank's latest meeting confirmed that there was a lot of discussion about cutting bond purchases and raising rates.

• The yen's sustained depreciation is also spreading to emerging markets, putting Asian currencies under stress as they need to fall to remain export competitive. The Chinese yuan has risen more than 10% against the yen this year and is near its highest level since 1992, the main reason analysts suspect Beijing is weakening its own currency over time.

• Geopolitics also loomed large, with the first US presidential debate on Thursday and the first round of voting in the French election over the weekend. An opinion poll over the weekend showed France's far-right National Rally (RN) party and its allies leading the country's first round of elections with 35.5% of the vote.

• The key this week will be the Personal Consumer Expenditures (PCE) price index on Friday, which really needs to be favorable for the market to continue betting on a September rate cut. The benchmark interest rate is expected to slow to a three-year low of 2.6% YoY from 2.8% in a range of 2.5% to 2.8%. In favorable CPI/PPI reports, the market is strongly pricing in 2.6% or lower, so a surprise rise would be very damaging. Analysts also warn that a number of very soft PCE figures for the second half of last year will decline in the coming months, making it difficult to overcome the base effect. Fed Chairman Powell cited this factor as the reason the median dot plot showed core PCE would still be at 2.8% by the end of this year.

• Apple and Meta discussed partnership in the field of AI - WSJ. Parent company Facebook has been in talks with Apple to integrate the company's Meta Platforms generative AI model into Apple Intelligence, its recently announced AI system for the iPhone and other devices.

• Nvidia to launch in the Middle East amid US restrictions on AI exports to the region - Ooredoo CEO. Nvidia has signed an agreement to deploy its artificial intelligence technology in data centers owned by Qatari telecoms group Ooredoo in five Middle Eastern countries - Reuters.

• Yaccarino shakes up X amid Musk's demands to cut costs - FT. This month, Yaccarino fired her right-hand woman and head of business operations and communications, Joe Benarrocha, the newspaper reported, citing three people familiar with the matter.

• ChatGPT-5 has not yet been released, and people can no longer distinguish it from a person - research. UPS is selling its freight brokerage business Coyote Logistics to RXO for $1 billion

• RXO said the deal will be financed through a combination of equity and debt capital, including a $300 million investment from MFN Partners and $250 million from Orbis Investments, the company's two largest shareholders.

• UPS bought Chicago-based Coyote in 2015 for $1.8 billion. Shares of UPS and RXO are down 13% year to date.

• The US dollar remains strong. This puts pressure on the crypt - Bitcoin is below $63 thousand. Raw materials are stable.

This week's main events will be:
- The Fed's preferred measure of inflation.
- On Friday, the Bureau of Economic Analysis will publish the personal consumption expenditure price index for May. The main and core indexes are forecast to rise 2.6% from the previous year.
- Carnival and FedEx will report on Tuesday, followed by Micron Technology and General Mills on Wednesday. Nike, McCormick and Walgreens Boots Alliance will report on Thursday.
- Other economic data to watch this week include the Conference Board's June consumer confidence index on Tuesday, the Census Bureau's May durable goods report on Thursday, and various housing market indicators.

Key events that could affect markets on Monday:
- Ifo business climate survey in Germany, CBI Trends orders in the UK for June.
- ECB board members Claudia Buch, Eduard Fernandez-Bollo, Isabelle Schnabel and Elizabeth McCall speak.
- Speeches by Federal Reserve representatives Austan Goolsbee, Mary Daly and Christopher Waller. Speech by Bank of Canada Governor Tiff Macklem.
- Dallas Fed Manufacturing Index for June.