• European bourses have conformed to the downbeat APAC handover with losses in the region extending following the cash open, Euro Stoxx 50 -1.7%.
• US futures are moving in tandem with European-peers; however, magnitudes are more contained as the ES is only modestly negative and NQ continues to cling onto positive territory following Apple earnings
• Buck bull run continues as DXY takes out another July 2020 high; peers pressured across the board as such
• Bonds back off as curves realign in wake of heavy post-FOMC compression and fixed decouples from equity pressure
• WTI and Brent are consolidating somewhat after yesterday's choppy price action, but remain towards the low-end of a circa. USD 1.00/bbl range.
• Ahead of US Personal Income, PCE Price Index, University of Michigan (Final).

As of 11:20GMT/06:20EST

LOOKING AHEAD

• US Personal Income, PCE Price Index, University of Michigan (Final).

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EUROPEAN TRADE

EQUITIES

• European bourses have conformed to the downbeat APAC handover with losses in the region extending following the cash open, Euro Stoxx 50 -1.7%.
• Sectors were mixed with Tech and Banking names the laggards while Personal/Household Goods and Retail outperformer following LVMH and H&M respectively; since then, performance has deteriorated though the above skew remains intact.
• US futures are moving in tandem with European-peers; however, magnitudes are more contained as the ES is only modestly negative and NQ continues to cling onto positive territory following Apple earnings.
• Apple Inc (AAPL) Q1 2022 (USD): EPS 2.10 (exp. 1.89), Revenue 123.95bln (exp. 118.66bln), iPhone: 71.63bln (exp. 68.34bln), iPad: 7.25bln (exp. 8.18bln), Mac: 10.85bln (exp. 9.51bln), Services: 19.52bln (exp. 18.61bln), according to Businesswire. +3.5% in the pre-market, trimming from gains in excess of 5.0% earlier

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FX

• Buck bull run continues as DXY takes out another July 2020 high to leave just 97.500 in front of key Fib resistance.
• Aussie feels the heat of Greenback strength more than others amidst risk-off positioning and caution ahead of next week’s RBA policy meeting.
• Kiwi also lagging and Loonie losing crude support after the BoC’s hawkish hold midweek.
• Euro and Yen reliant on some hefty option expiry interest to provide protection from Dollar domination.
• BoJ Governor Kurdoa if times come to debate the exit of policy, then targeting shorter maturity JGBs could become an option; at this stage its premature to raise yield target or take steps to steepen yield curve.

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Notable Expiries, NY Cut:

• EUR/USD: 1.1075 (442M), 1.1100 (734M), 1.1130-35 (515M), 1.1150 (1.3BN), 1.1200-10 (1.64BN), 1.1270-75 (1.0BN), 1.1300-10 (1.0BN), 1.1320-25 (675M), 1.1350 (290M), 1.1400 (475M), 1.1500-10 (535M)
• USD/JPY: 113.15 (655M), 114.00 (748M), 114.50 (645M), 115.00 (1.38BN), 115.50-55 (1.98BN), 115.90-00 (1.7BN)
• Click here for the full list.

FIXED INCOME

• Bonds back off as curves realign in wake of heavy post-FOMC compression.
• Debt decouples from weakness in equities amidst pre-week and month-end positioning.
• BTPs undermined by delay to find an Italian Presidential winner.

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COMMODITIES

• WTI and Brent are consolidating somewhat after yesterday's choppy price action, but remain towards the low-end of a circa. USD 1.00/bbl range.
• Focus remains firmly on geopols as Russia is set to speak with French and German officials on Friday, though rhetoric, remains relatively familiar.
• Spot gold and silver are pressured as the yellow metal loses the 100-DMA, and drops to circa. USD 1780/oz as the USD rallies, and ahead of inflation data while LME copper follows the equity downside.

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CRYPTO

• Crypto markets were rangebound in which Bitcoin traded both sides of the 37,000 level.
• Russia's government drafted a roadmap for cryptocurrency regulation, according to RBC.

NOTABLE EUROPEAN HEADLINES

• UK PM Johnson is reportedly 'wobbling' over plans to hike National Insurance as battles for survival and refused to confirm if they will proceed with the planned increase, according to LBC.
• A government source cited by The Times suggested PM Johnson was considering delaying the National Insurance hike for a year.
• UK Chancellor Sunak has been accused by PM Johnson's allies of blocking plans to invoke Article 16, according to The Telegraph.
• UK's Met Police has asked that the Gray report into alleged Downing Street lockdown breaches makes minimal reference to the events they are investigating.
• Italian Centre-Right will vote for Senate speaker Casellati in a call/meeting between parties ahead of Friday's Presidential elections, according to ANSA; from today, two votes will be held each day in the election, according to Reuters.

DATA RECAP

• German GDP Flash QQ SA (Q4) -0.7% vs. Exp. -0.3% (Prev. 1.7%); YY NSA (Q4) 1.4% (Prev. 2.5%, Rev. 2.8%)
• EU Consumer Confidence Final (Jan) -8.5 vs. Exp. -8.5 (Prev. -8.5, Rev. -8.4)
• Economic Sentiment (Jan) 112.7 vs. Exp. 114.5 (Prev. 115.3, Rev. 113.8)
• Consumer Inflation Expectations (Jan) 38.4 (Prev. 36.6)

US-SPECIFIC HEADLINES

• US President Biden will deliver remarks regarding supply chains today at 14:00EST/19:00GMT.
  • NIH said hyperimmune intravenous immunoglobulin (hiVIG) does not improve outcomes of adults hospitalised with COVID-19 in trial where hiVIG plus Remdesivir was compared with Remdesivir alone, according to Reuters.

Click here for the US Early Morning note.

APAC TRADE

• Asian stocks eventually traded mixed although China lagged ahead of holiday closures next week.
• ASX 200 (+2.2%) was lifted back up from correction territory.
• Nikkei 225 (+2.1%) gained on a weaker currency and with corporate results driving the biggest movers.
• KOSPI (+1.9%) was boosted by earnings including from the world's second-largest memory chipmaker SK Hynix.
• Hang Seng (-1.1%%) and Shanghai Comp. (-0.9%) lagged with a non-committal tone in the mainland ahead of the Lunar New Year holiday closures and with Hong Kong pressured by losses in blue chip tech and health care.

NOTABLE APAC HEADLINES

• PBoC injected CNY 200bln via 14-day reverse repos with the rate at 2.25%, according to Reuters.
• Chinese state media stepped up calls for stocks confidence following recent slump, according to Bloomberg.
• BoK will conduct a meeting on February 3rd to review the market situation and will strengthen monitoring of markets during upcoming holiday.

DATA RECAP

• Tokyo CPI YY (Jan) 0.5% vs. Exp. 0.6% (Prev. 0.8%)
• Tokyo CPI Ex. Fresh Food YY (Jan) 0.2% vs. Exp. 0.3% (Prev. 0.5%)
• Tokyo CPI Ex. Fresh Food & Energy YY (Jan) -0.7% vs. Exp. -0.3% (Prev. -0.3%)

GEOPOLITICS

• US President Biden reaffirmed in call with Ukraine's President the readiness of US to respond decisively if Russia further invades Ukraine, according to Reuters.
• Russian Foreign Minister Lavrov says Russia is analysing NATO and US proposals and will decide on how to respond to them, via Reuters; additionally, Lavrov will speaking with German Foreign Minister Baerbock on Friday, via Ifx.
• Russia's Kremlin says President Putin's talks with Chinese President Xi will give attention to security in Europe and Russia-US dialoged, according to Reuters; Kremlin does not rule out that Putin will provide some assessments on response to Russian proposals.
• US requested a public UN Security Council meeting for Monday to discuss the build up of Russian forces on Ukraine border, according to Reuters citing diplomats.
• US bipartisan group of Senators have reportedly been meeting to create legislation that would dramatically increase presence of US military aid for Ukraine, according to Reuters sources.
• Lithuania and Germany are in discussions to increase the presence of the German military, given current events, according to Reuters.
• At least six missiles targeted the US military wing at Victoria Base near Baghdad airport, according to Sky News Arabia.
• UK businesses are urged to prepare for Russian state cyberattacks, according to the FT.
• Russian-backed separatist forces in Donbass notes (Translated) "Ukraine prepares military attack on our positions under the supervision of U.S. advisers", cited by Al Jazeera.