Newsquawk

Euro Market Open: Pressure emanated from a reported AAPL hiring slowdown with FX & crude steady

19 Jul 2022, 06:50 by Newsquawk Desk

APAC stocks mostly fell after reports of Apple slowing hiring and European energy woes stoked growth fears.
European equity futures are indicative of a lower open with Eurostoxx 50 -0.8% after the cash market closed with gains of 1.0% yesterday.
DXY heads into the European session flat, antipodeans lead G10 FX, EUR/USD is contained after hitting resistance at 1.02.
Crude futures took a breather from the resurgence spurred by uncertainty regarding Russian gas supply.
Looking ahead, highlights include UK Unemployment, EZ CPI (Final), Speech from BoE's Bailey, Supply from UK & Germany, Earnings from JNJ, Lockheed & Netflix.

US stocks reversed earlier strength with risk appetite soured by reports of Apple cooling its hiring and with desks pointing to the lack of liquidity amplifying the tape to such headlines, while Goldman Sachs also said it would be slowing its hiring too and CNBC noted year-end job cuts are on the table at the bank.
SPX -0.83% at 3,830, NDX -0.89% at 11,877, DJIA -0.69% at 31,072, RUT -0.34 % at 1,738.
Click here for a detailed summary.

NOTABLE US HEADLINES

US President Biden could declare a climate emergency as soon as this week as he seeks to salvage his environmental agenda, according to the Washington Post.
US Senate Majority Leader Schumer said the Senate is to hold the first procedural vote for the CHIPS act on Tuesday.
US CHIPS bill draft, cited by WSJ, shows it would impose "guardrails" aimed at ensuring adversarial countries such as China don't benefit, while details are still being hashed out ahead of expected procedural votes in the Senate as soon as Tuesday.
US CDC said that as of July 18th, its COVID-19 program for cruise ships is no longer in effect.

US Treasury Secretary Yellen said economic integration has been weaponised by Russia to great effect and that all responsible countries must unite in opposition to Russia's war in Ukraine. Yellen also stated that the US will impose harsh consequences on countries that abuse or break the international economic order, while she is heartened by conversations with Korean counterparts on a proposed cap on Russian oil prices, according to Reuters.
Ukrainian state gas system said there is no immediate evidence of any disruption to Russia's gas transit to Europe, according to Reuters.

APAC stocks mostly fell after reports of Apple slowing its hiring and European energy woes stoked growth fears.
ASX 200 was lacklustre amid weakness in tech and with miners choppy after a mixed quarterly update from BHP.
Nikkei 225 outperformed as it played catch up to the prior day's gains on return from the extended weekend.
Hang Seng and Shanghai Comp. were pressured amid earnings updates and the COVID situation in China, but with the losses in the mainland stemmed after reports that China is considering a mortgage grace period.
US equity futures were contained near the prior day's lows following the deterioration on Wall Street; ES +0.2%
European equity futures are indicative of a lower open with Eurostoxx 50 -0.8% after the cash market closed with gains of 1.0% yesterday.

DXY heads into the European session contained on a 107 handle amid the quiet data docket and with a lack of Fed speakers owing to the blackout period.
EUR/USD continued to trickle lower after hitting resistance yesterday at the 1.0200 level and with the single currency not helped by the uncertainty regarding Russian gas supply.
GBP/USD traded rangebound following the lack of surprises from the third ballot of the Tory leadership race in which Sunak and Mordaunt remained the leading candidates, while the government also won the vote of confidence it tabled in parliament.
USD/JPY was choppy and eventually retested support around the 138.00 level.
Antipodeans are firmer with AUD/USD underpinned following the RBA Minutes which reaffirmed the board remains committed to doing what is necessary to ensure inflation returns to the target over time and that members agreed further steps would need to be taken to normalise monetary conditions in the months ahead.

10yr USTs were subdued after recent losses which coincided with higher yields and energy prices.
Bunds traded sideways above 152.00 after having nursed some of Monday’s early losses.
10yr JGBs were lacklustre amid the outperformance of Japanese stocks but with downside stemmed amid the BoJ’s presence in the market for nearly JPY 1.5tln of JGBs on top of its daily fixed-rate operations.

Crude futures took a breather from the resurgence spurred by uncertainty regarding Russian gas supply.
EIA said US total shale regions oil production for August seen up 138k BPD at 9.069mln BPD (prev. +142k BPD in July).
White House said that it anticipates an increase in oil production, according to Reuters.
White House Adviser Deese expects gasoline prices will continue to fall this month, according to MSNBC. It was also reported that White House economic adviser Bernstein said they see average gasoline prices falling beneath USD 4 per gallon in some places in the coming weeks, while he added that strong jobs and other data are inconsistent with the term recession.
Russia raised July oil output as domestic refineries ramped up and pumped 10.78mln BPD from July 1st-17th (vs 10.7mln BPD in June), according to Bloomberg.
TC Energy issued a force majeure for oil deliveries on Keystone Pipeline after a third-party power outage in South Dakota, while TC Energy said the Keystone Pipeline is operating at reduced rates with no timeline available for the restoration of full-service, according to Reuters.
Spot gold traded flat with price action contained by an uneventful greenback.
Copper prices were pressured by the mostly risk-averse tone and ongoing growth slowdown concerns.

Bitcoin prices were lower overnight and returned to beneath the 22,000 level.

NOTABLE APAC HEADLINES

US House Speaker Pelosi is to visit Taiwan with a delegation next month, according to FT.
RBA July Meeting Minutes stated that the Board remains committed to doing what is necessary to ensure inflation returns to the target over time and members agreed further steps would need to be taken to normalise monetary conditions in the months ahead, while it noted that two options for the size of the Cash Rate increase were considered which were raising the cash rate target by 25bps or by 50bps.
RBA Deputy Governor Bullock said wages are starting to rise a little more, while she added that they need to get rates up to some sort of neutral and that neutral is a fair bit higher than where they currently are.

NOTABLE HEADLINES

UK government won a vote of confidence in the House of Commons (as expected) after five hours of debate with the vote count at 349 vs. 238, according to Sky News
UK Chancellor Zahawi said they can and will get inflation back under control, while he added that they must deliver sound public finances and help households with inflation, not push up demand further. Zahawi stated that he will reform Solvency II rules to give insurers more flexibility to invest in infrastructure and aims to repeal hundreds of EU financial regulations and replace them with a UK version, according to Reuters.
Tom Tugendhat was knocked out of the UK Conservative leadership race after having received the least number of votes in the third ballot, while Sunak leads with 115 followed by Mordaunt with 82, Truss 71, Badenoch 58.