Newsquawk

Euro Market Open: Contained trade with drivers limited and a quiet schedule ahead

19 Aug 2022, 06:50 by Newsquawk Desk

APAC stocks lacked firm direction despite the mild tailwinds from the US where sentiment was somewhat underpinned by mostly encouraging data.
European equity futures are indicative of a marginally lower open with the Euro Stoxx 50 future -0.2% after the cash market closed higher by 0.6% yesterday.
DXY has continued to strengthen on a 107 handle, EUR is sub 1.01, GBP/USD hovers around the 1.19 mark.
Indonesian President Widodo said Chinese President Xi and Russian President Putin will attend the G20 summit in Indonesia.
Looking ahead, highlights include UK Retail Sales, Speech from Fed's Barkin & Earnings from Deere.

US stocks were modestly firmer with a bias towards cyclical/value sectors amid encouraging data releases including a strong Philly Fed August survey and a surprise fall in initial jobless claims.
SPX +0.23% at 4,284, NDX +0.26% at 13,505, DJIA +0.06% at 34,000, RUT +0.44% at 1,996.
Click here for a detailed summary.

NOTABLE US HEADLINES

Fed's Bullard (2022 voter) said he is leaning towards 75bps in September and that front-loading hikes in 2022 gives the Fed options in 2023, while he reiterated his 3.75%-4.00% year-end Fed rate call, according to a WSJ interview.
Fed's George (2022 voter) said the inflation number last month was "encouraging" but not time for a victory lap and that relief in core inflation so far is hardly comforting, while she added that the case for increasing rates remains strong and the pace will continue to be a matter of debate. Fed’s George also stated that the easing of financial conditions may have been based on optimism that the Fed would slow down but that does not reflect how the Fed is thinking about policy.
Fed's Kashkari (2023 voter) said they are getting some help on inflation from the supply side and that the Fed knows how to get inflation in check but the question is if it can do it without a recession. Kashkari added he is not sure if the Fed can avoid a recession and that there is more work to be done to bring inflation down, but noted economic fundamentals are strong.
White House is planning an end to its practice of paying for COVID-19 shots and treatments while shifting more control of pricing and coverage to the healthcare industry, according to WSJ.
Apple (AAPL) disclosed serious security vulnerabilities for iPhones, iPads and Macs, which could potentially allow attackers to take complete control of devices, according to Sky News.

Turkish President Erdogan said he discussed possible ways to end the war in a trilateral meeting with UN Secretary-General Guterres and Ukrainian President Zelensky.
US President Biden's administration is readying about USD 800mln in additional security aid for Ukraine with an announcement as early as Friday, according to Reuters sources.

A list of concessions the US has agreed to give Iran in Vienna talks is circulating among the Iranian administration and suggests a deal is to be implemented in 120 days, according to a tweet by has been seen by Iranian International English. The list of concessions is said to include removal of sanctions on 17 banks and sanctions relief for 150 institutions including Setad, the immediate release of USD 7bln worth of Iranian assets in South Korea and the sale of 50mln barrels of oil in 120 days, among others.
North Korean leader Kim's sister said North Korea will never deal with South Korea's "audacious initiative" offer and North Korea stated it will not respond to South Korea's proposals, according to Yonhap citing state media.
South Korean Presidential office expressed regret over North Korea's vow to continue nuclear development, while the Unification Minister also expressed regret over North Korea's 'very disrespectful' criticism against President Yoon, according to Reuters.

APAC stocks lacked firm direction despite the mild tailwinds from the US where sentiment was somewhat underpinned by mostly encouraging data.
ASX 200 just about kept afloat amid outperformance in energy on recent oil price gains although the upside was limited by weakness in financials and amid another influx of earnings results.
Nikkei 225 returned to flat territory beneath the 29k level after early momentum petered out.
Hang Seng and Shanghai Comp were indecisive amid a lack of macro drivers and with newsflow dominated by earnings, while markets await a cut to the benchmark lending rates early next week.
US equity futures were contained amid the widespread lack of conviction overnight; ES -0.2%.
European equity futures are indicative of a marginally lower open with the Euro Stoxx 50 future -0.2% after the cash market closed higher by 0.6% yesterday.

DXY continued to strengthen after mostly encouraging data releases stateside and the latest Fed rhetoric in which some officials reiterated the view that more needs to be done and it is too soon to call victory on inflation.
EUR/USD prodded yesterday’s lows and remained subdued after recently taking out key levels on its slide to beneath the 1.0100 level.
GBP/USD remained pressured and with price action not helped by the record-low UK GfK Consumer Confidence data.
USD/JPY reclaimed the 136.00 handle to the upside for the first time in three weeks despite a further climb in Japanese CPI data which mostly matched expectations.
Antipodeans were uneventful and took a backseat to the firmer dollar.

10yr UST futures were slightly pressured after the latest Fed rhetoric and strong US data.
Bund futures extended on yesterday's losses that were triggered by hawkish ECB comments.
10yr JGBs futures were lacklustre amid weakness in global counterparts and after the rise in core CPI to its highest since 2014, although this was as expected and unlikely to have ramifications for BoJ policy.

Crude marginally pulled back overnight but held on to most of the prior day's gains which were spurred by the geopolitical and supply risk, strong US data and OPEC jawboning.
Brazil Economy Minister Guedes said they can increase oil production if Petrobras is given more adequate treatment to de-verticalise it and hopes they alter the way the Co. is treated if Bolsonaro is re-elected, according to Reuters.
Spot gold price action was kept subdued by the firmer greenback.
Copper remained afloat after yesterday's rebound and data inspiration.

NOTABLE APAC HEADLINES

China's cyberspace regulator said it made progress on rule of law in cyberspace and that the digital economy now faces challenges but it will boost digital development and enhance competitiveness.
Indonesian President Widodo said Chinese President Xi and Russian President Putin will attend the G20 summit in Indonesia, according to Bloomberg.

DATA RECAP

Japanese National CPI YY (Jul) 2.6% vs Exp. 2.6% (Prev. 2.4%)
Japanese National CPI Ex. Fresh Food YY (Jul) 2.4% vs Exp. 2.4% (Prev. 2.2%)
Japanese National CPI Ex. Fresh Food & Energy YY (Jul) 1.2% vs Exp. 1.1% (Prev. 1.0%)

NOTABLE HEADLINES

German Finance Ministry said the German economic outlook is gloomy and clouded by energy price rises and supply chain issues, according to Reuters.

DATA RECAP