• APAC markets traded lower amid wide-spread risk aversion after late Wall Street selling
• All major US indices declined after another failed relief rally; S&P 500 -1.1%
• Netflix shares dropped 20% after-hours on disappointing subscriber additions and forecasts
• DXY remained steadfast despite decline in yields. Antipodeans lag
• Looking ahead, highlights include UK Retail Sales, EZ Consumer Confidence, BoE's Mann; ECB's Lagarde, BoJ's Kuroda

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APAC TRADE

EQUITIES

• APAC markets traded lower amid wide-spread risk aversion after late Wall Street selling.
• ASX 200 (-2.5%) underperformed as miners led the broad downturn.
• Nikkei 225 (-1.9%) dropped more than 500 points intraday on currency strength but finished off lows.
• Hang Seng (-0.8%) and Shanghai Comp. (-0.8%) downside was somewhat cushioned on reports of further PBoC action.
• US equity futures traded with losses across the board; NQ underperformed post-Netflix earnings.

FX

• DXY remained steadfast despite decline in yields.
• EUR/USD attempted to nurse losses after finding support at 1.1300.
• GBP/USD contained by resistance at 1.3600 amid ongoing political storm.
• USD/JPY slipped beneath 114.00 on haven flows, while CPI printed softer than expected and BoJ Minutes were outdated.
• Antipodeans lag in the G10 FX space

FIXED INCOME

• 10-year USTs climbed above 128.00 amid risk aversion and softening in yields.
• 10-year JGBs tested 151.00 to upside but off highs after relatively inline enhanced liquidity auction.
• Bund futures gapped above 170.00

COMMODITIES

• WTI and Brent front-month futures declined amid the negative sentiment and following recent bearish crude inventories.
• Spot gold traded sideways around USD 1840/oz as the USD held steady.
• Copper futures continued to fade yesterday's gains.

CRYPTO

• Crypto markets saw substantial losses overnight with Bitcoin back under USD 40k.

NOTABLE APAC HEADLINES

• PBoC is to lower interest rates on its Standing Lending Facility for all tenors by 10bps today with rates on Overnight, 7-day and 1-month SLF to be cut to 2.95%, 3.10% and 3.45%, respectively, according to sources. (Newswires)
• China and US are in discussion for a potential meeting between China top diplomat Yang Jiechi and US National Security Adviser Sullivan regarding core national security concerns although sides are divided on protocol and agenda, according to SCMP sources. (SCMP)
• BoJ December meeting minutes stated that they are actively monitoring the economic impact from COVID-19 and it will not hesitate to add easing if necessary, while a member said they must be vigilant to risk from Fed's tapering and expected rate could cause stocks to decline and an increase in JPY. (Newswires)

DATA RECAP

• Japanese National CPI YY (Dec) 0.8% vs. Exp. 0.9% (Prev. 0.6%)
• Japanese National CPI YY Ex. Fresh Food (Dec) 0.5% vs. Exp. 0.6% (Prev. 0.5%)
• Japanese National CPI YY Ex. Fresh Food & Energy (Dec) -0.7% vs. Exp. -0.6% (Prev. -0.6%)

EUROPE-SPECIFIC HEADLINES

• French PM Castex said COVID situation is beginning to change in a more favourable manner and loosening of measures is expected from February, while the COVID pass should take effect from January 24th pending approval from constitutional office. (Newswires)
• European Commission VP Sefcovic briefed that talks with UK Foreign Minister Truss on NI protocol had a much improved tone and atmosphere but little substantive development. (Newswires)

DATA RECAP

• UK GfK Consumer Confidence* (Jan) -19 vs. Exp. -15.0 (Prev. -15.0)

GEOPOLITICS

• US gave approval for three Baltic NATO members to send American-made weapons to Ukraine. (WSJ)
• UK Foreign Secretary Truss warned Russia and China that the west will stand together against dictatorship, while she warned Russia to desist and step back from Ukraine and said the west must work with allies in Indo-Pacific to face down aggressors. (Newswires)
• US charged four Belarusian government officials with aircraft piracy for diverting Ryanair flight to arrest a journalist last year. (Newswires)
• China blocked a US push for UN sanctions on five North Koreans, while US calls on North Korea to cease unlawful actions and resume talks. (Newswires)

US TRADE

• All major indices declined after another failed relief rally in which equities slumped in late trade amid ongoing hawkish themes and after key levels were breached.
• S&P 500 declined 1.1% and fell beneath the 4,500 level.
• Nasdaq 100 fell 1.3% to below 15k and its nearby 200DMA.
• Netflix shares dropped 20% after-hours on disappointing subscriber additions and forecasts.
• Russell 2000 underperformed, closing down 1.8%.

NOTABLE US HEADLINES

• Hospitals in early Omicron hot spots like New York and Washington D.C. said the pressure is starting to ease. (WSJ)
• Senate Banking Committee Chair Brown said the Senate will confirm Fed Chair Powell by early February and is certain Vice-Chair nominee Brainard will win Senate confirmation. (Newswires)
• Moderate Democratic Manchin indicated he’s open to re-engaging on a revised BBB but talks will have to start from scratch. (NBC/CNN)
• Senate Judiciary Committee votes to approve bill that would not allow big tech platforms to preference their own businesses. (Newswires)
• Energy Secretary Granholm reportedly violated a federal conflict-of-interest law by improperly disclosing stock sales. (Business Insider)
• Fed white paper on a US Central Bank Digital Currency made no recommendation on whether to adopt a CBDC and it does not intent to proceed with CBDC issuance without clear support from the executive branch and from congress. (Newswires)
• Netflix Inc (NFLX) Q4 2021 (USD): EPS 1.33 (exp. 0.82), Rev. 7.71bln (exp. 7.71bln), Q4 Net Subscriber Additions: 8.28mln (exp. 8.38mln), sees Q1 EPS USD 2.86 (exp. 3.46), sees Q1 Net Subscriber Additions 2.5mln (exp. 5.87mln). (PR Newswire)