• All major US indices finished higher after having recovered from heavy intraday selling in what was a roller-coaster session.
• APAC markets were heavily pressured after yesterday's whirlwind session in the US. European futures point towards a firmer open.
• DXY traded steadily and held on to most of the prior day's gains just shy of the 96.00 status
• US Department of Defense spokesperson Kirby said 8,500 US personnel are ready to be activated to aid NATO

LOOKING AHEAD

• Looking ahead, highlights include German IFO, US Consumer Confidence, US 5yr note auction. Earnings from General Electric, J&J, American Express, Lockheed Martin and Verizon

Click here for the Week Ahead preview

US TRADE

• All major indices finished higher after having recovered from heavy intraday selling in what was a roller-coaster session.
• DJIA closed up 0.3% after it clawed back losses of more than 1000 points.
• Nasdaq Comp eventually notched gains of 0.6% after reversing a 4% slump.
• Russell 2000 climbed over 2% and reclaimed the 2k status.

APAC TRADE

EQUITIES

• APAC markets were heavily pressured after yesterday's whirlwind session in the US.
• ASX 200 (-2.5%) slumped with losses exacerbated as firm CPI supports RBA tightening calls.
• Nikkei 225 (-1.7%) briefly fell beneath 27,000 for the first time since August last year.
• KOSPI (-2.3%) ignored strong GDP as South Korea reported record daily COVID-19 cases and North Korea fired cruise missiles.
• Hang Seng (-1.6%) and Shanghai Comp. (-1.7%) conformed to the downbeat mood with Hong Kong dragged by notable losses in its tech sector and with Chinese property names also subdued amid ongoing Evergrande woes.
• US equity futures declined overnight amid Asia-Pac selling; e-mini S&P -1.0%,. European futures are indicative of a firmer open with the Eurostoxx 50 future higher by 0.9% after the cash market closed lower by 4.1% yesterday

FX

• DXY traded steadily and held on to most of the prior day's gains just shy of the 96.00 status
• EUR/USD was lacklustre with recent price action influenced by gyrations in the greenback and risk sentiment.
• GBP/USD remained beneath 1.3500 after further lockdown party revelations involving UK PM Johnson.
• USD/JPY extended below 114.00 amid stock rout.
• Antipodeans were eventually contained by the risk aversion which saw AUD/USD fade post-CPI gains, while several more banks brought forward their RBA rate hike calls.

FIXED INCOME

• 10-year USTs retreated after the settlement as Wall Street staged a dramatic comeback.
• 10-year JGBs were rangebound with price action contained near 151.00 and following a mixed 40yr auction.
• Bunds softened following its recent brief incursion into 171.00 territory.

COMMODITIES

• WTI and Brent crude front-month futures found some reprieve from the prior day's selling following Wall St's bounceback.
• Spot gold is flat amid a steadfast USD as the FOMC draws closer.
• Copper eked marginal gains after it found support at USD 4.40/lb.

CRYPTO

• Crypto markets were subdued although off their lows with Bitcoin back above 36k.

NOTABLE APAC HEADLINES

• PBoC injected CNY 150bln via 14-day reverse repos with the rate at 2.25% for a CNY 50bln net injection. (Newswires)
• MAS announced to slightly raise the appreciation of the SGD NEER policy band but left the width of the band and level of which it is centred unchanged in an unscheduled policy meeting, while it said the move was appropriate for ensuring medium-term price stability. (Newswires)
• South Korea is considering extending USD/KRW trading hours and improving access of foreign dealers to USD/KRW, while it also plans to start talks on seeking inclusion to MSCI Developed Market Index from February. (Newswires)

DATA RECAP

• Australian CPI QQ (Q4) 1.3% vs. Exp. 1.0% (Prev. 0.8%)
• Australian CPI YY (Q4) 3.5% vs. Exp. 3.2% (Prev. 3.0%)
• Australian RBA Trimmed Mean CPI QQ (Q4) 1% vs. Exp. 0.7% (Prev. 0.7%)
• Australian RBA Trimmed Mean CPI YY (Q4) 2.6% vs. Exp. 2.4% (Prev. 2.1%)
• Australian NAB Business Confidence (Dec) -12 (Prev. 12.0)
• Australian NAB Business Conditions (Dec) 8 (Prev. 12.0, Rev. 11)
• South Korean GDP QQ (Q4 A) 1.1% vs. Exp. 0.9% (Prev. 0.3%)
• South Korean GDP YY (Q4 A) 4.1% vs. Exp. 3.7% (Prev. 4.0%)
• South Korean GDP grew 4.0% annually for 2021 which would be the fastest pace since 2010, according to BoK estimates. (Newswires)

EUROPE-SPECIFIC HEADLINES

• UK PM Johnson had a birthday party during lockdown in June 2020 despite rules forbidding social gatherings indoors. (ITV News)
• German Chancellor Scholz said they can see current measures are working and want to continue with them, while he added that Germany is to probably reach the peak of Omicron COVID wave by the middle of February. (Newswires)
• Italian legislators were unable to elect a new President in the first voting round. (Newswires)

GEOPOLITICS

• US Secretary of State Blinken said returning to the Iranian nuclear deal is still the preferred option and talks cannot be allowed to drag on for too long. In relevant news, the State Department announced that Richard Nephew is no longer the Deputy Special Envoy for Iran (Newswires)
• White House Press Secretary said NATO confirmed plans to launch military exercise dubbed "Neptune Strike". (Newswires)
• US Department of Defense spokesperson Kirby said 8,500 US personnel are ready to be activated to aid NATO but added there is no decision to deploy forces at this time. There were also reports the US military ordered several hundred US troops on standby to potentially deploy to Eastern Europe amid heightened tensions in case they are needed to support Ukrainians evacuate. (Newswires/WSJ)
• US State Department Spokesman Price that the US will send a written response to Russia this week and that there is no ambiguity about a response if Russia attacks Ukraine, while it was also reported that the Treasury Department shortened the extension of general licenses for Russia's Gaz Group, which it extended for only 90 days due to the current situation with Russia. (Newswires)
• Ukrainian President Zelensky “does not think there’s any remotely imminent threat to Kyiv” at the moment, according to a source close to the president, while other reports also noted that experts believe a full-scale invasion of Ukraine is the least likely of the possible outcomes, and lean toward further annexation or a “limited operation”. (BuzzFeed/The Moscow Times)
• North Korea fired two cruise missiles on Tuesday morning. (Newswires/NK News)

NOTABLE US HEADLINES

• US FDA limited the use of certain monoclonal antibodies to treat COVID-19 due to the Omicron variant in which it revised authorisation for BAMLANIVIMAB administered with ETESEIVIMAB and authorisation for REGEN-COV, while it stated that the data shows treatments are highly unlikely to be active against the Omicron variant. (Newswires)