Newsquawk

US Market Open: Further hawkish price action in relatively limited newsflow, Fed's Barkin due

19 Aug 2022, 11:40 by Newsquawk Desk

European bourses are under modest pressure, Euro Stoxx 50 -0.6%, in a session of limited newsflow with focus on continuing hawkish price action.
Stateside, given the hawkish action, NQ -1.0% is the incremental underperformer ahead of commentary from 2024 voter Barkin.
Commodities are under broad pressure given USD strength with crude curtailed as it awaits another JCPOA response.
Dollar continues to reign as risk sentiment sours again and yields ratchet higher and steeper.
Looking ahead, highlights include commentary from Fed's Barkin.

As of 11:15BST/06:15ET

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.
Ukraine's Energoatom says Russian forces are planning to switch off functioning power blocks at the Zaprozhzia power plant and disconnect them from the Ukrainian grid, via Reuters.
Turkish President Erdogan says he will discuss the Zaprozhzia power plant with Russian President Putin following talks with Ukraine President Zelenskiy in Lviv. Zelenskiy requested that Russia removes all mines near the power plant.

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.
WSJ's Norman, on the Iranian nuclear deal, says "A reasonable assumption, if unconfirmed, that the US will respond to Iranian concerns/issues today via EU.".

European bourses are under modest pressure, Euro Stoxx 50 -0.6%, in a session of limited newsflow with focus on continuing hawkish price action.
Stateside, given the hawkish action, NQ -1.0% is the incremental underperformer ahead of commentary from 2024 voter Barkin.
China's CPCA forecast shows August passenger car sales lifting MM to 1.88mln (prev. 1.77mln), latest COVID outbreak is expected to have a relatively limited impact on the auto market.
Deere & Co (DE) Q2 2022 (USD): EPS 6.16 (exp. 6.69), Revenue 14.1bln (exp. 12.78bln); FY view Net 7.0-7.2bln (prev. 7.0-7.4bln, exp. 7.1bln).
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Dollar continues to reign as risk sentiment sours again and yields ratchet higher, DXY up to 107.930 and close to mid-July high just shy of 108.000
Euro remains relatively resistant amidst further EGB retracement and strong Eurozone inflation data, EUR/USD sub-1.0100, but above 1.0050.
No retail therapy for Sterling as wider UK economic worries weigh on the Pound, Cable under 1.1900 and EUR/GBP eyeing 0.8500.
NZ trade data fails to give Kiwi a lift as deficit remains wide, NZD/USD hovering above 0.6200.
Yen shrugs off Japanese CPI as UST-JGB spreads widen further, USD/JPY touches 136.76 before waning.
Loonie and Nokkie undermined by softer oil prices as former awaits Canadian retail sales for independent impetus, USD/CAD 1.2950+, EUR/NOK around 9.8500
Yuan retreats as Moody’s joins list of those downgrading forecasts for Chinese growth this year, USD/CNY over 6.8100 and USD/CNH almost 6.8300 overnight.
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Notable FX Expiries, NY Cut:

Only dead cat bounces in debt as hawkish Central Bank and hot inflation vibes persist.
Bunds through trendline support to 152.61 and 10 year yield above 1.15% Fib resistance.
Gilts probing 113.00 vs 113.45 at best and T-note towards base of 118-11/118-29+ range .
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Under broad pressure given USD strength with crude curtailed as it awaits another JCPOA response; benchmarks lower by circa. USD 1.50/bbl, vs USD 7/bbl ranges for the week.
Spot gold clipped by the USD, though only by just over USD 5/oz compared to weekly parameters of over USD 50/oz; broader metals in-fitting in limited newsflow.
China's daily coal output +19.4% YY, between August 1st and 17th, via the Energy Administration.
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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.
Rhine water level at the Kaub crossing point forecast to hit ~148cm on August 23rd.

DATA RECAP

UK Retail Sales MM (Jul) 0.3% vs. Exp. -0.2% (Prev. -0.1%, Rev. -0.2%); YY (Jul) -3.4% vs. Exp. -3.3% (Prev. -5.8%, Rev. -6.1%)
UK Retail Sales Ex-Fuel MM (Jul) 0.4% vs. Exp. -0.2% (Prev. 0.4%); YY (Jul) -3.0% vs. Exp. -3.1% (Prev. -5.9%)
UK GfK Consumer Confidence (Aug) -44 vs. Exp. -42.0 (Prev. -41.0)
German Producer Prices MM (Jul) 5.3% vs. Exp. 0.6% (Prev. 0.6%); YY (Jul) 37.2% vs. Exp. 32.0% (Prev. 32.7%)

NOTABLE US HEADLINES

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.
Click here for the US Early Morning Note.

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.

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.
- Moody's cuts China's 2022 GDP forecasts to 3.5% (prev. 4.5%).

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%)