Newsquawk

Euro Market Open: Predominantly positive trade though Chinese PMIs capped gains

30 Nov 2022, 06:50 by Newsquawk Desk

APAC stocks eventually traded mostly higher although gains were capped following the subdued handover from Wall St and disappointing Chinese PMI data.
European equity futures were positive with the Euro Stoxx 50 future up 0.5% after the cash market closed flat yesterday.
DXY ran out of steam ahead of 107, EUR/USD and Cable reside on 1.03 and 1.19 handles respectively, NZD outperforms.
OPEC+ is likely to keep output levels flat at the Sunday meeting, according to WSJ citing delegates.
Looking ahead, highlights include Swiss KOF, German Unemployment, EZ CPI (Flash), US GDP (2nd), PCE Prices Prelim., JOLTS, Speeches from Fed's Powell, Bowman, Cook & BoE's Pill, Supply from Germany.

US stocks were subdued with the declines led by tech as yields rose throughout the US session which offset the risk-on conditions stemming from hopes around China loosening COVID controls.
SPX -0.17% at 3,957, NDX -0.73% at 11,503, DJIA flat at 33,850, RUT +0.31% at 1,836.
Click here for a detailed summary.

NOTABLE HEADLINES

Fed Discount Rate Minutes stated 9 of 12 Fed bank boards sought a 75bps discount rate hike in November, while Kansas, Philadelphia and New York Fed boards wanted a 50bps increase.
US Senate Democrat leader Schumer said the congressional leaders’ meeting was productive and many issues were discussed including funding the government.
US Senator McCarthy (R) said he would support "a common sense continuing resolution and fix this come January", according to Fox's Pergram.

APAC stocks eventually traded mostly higher at month-end although gains were capped following the subdued handover from Wall St and after disappointing Chinese PMI data.
ASX 200 was positive with the index led by strength in the mining-related sectors and with initial losses pared alongside a slew of data releases including better-than-expected Construction Work and softer monthly Australian CPI.
Nikkei 225 slipped beneath the 28,000 level after Industrial Production further deteriorated which prompted the government to cut its relevant assessment.
Hang Seng and Shanghai Comp were indecisive as recent optimism from hopes of an easing of COVID controls was clouded by disappointing Chinese PMI data which slipped into a deeper contraction.
US equity futures traded relatively flat (ES +0.1%) as participants await key data and Fed Chair Powell's speech.
European equity futures were positive with the Euro Stoxx 50 future up 0.5% after the cash market closed flat yesterday.

DXY was softer overnight after stalling on its approach towards the 107.00 level but with the downside limited by the recent gains in yields and ahead of a slew of data releases including US GDP and ADP, as well as Fed Chair Powell’s speech today which could provide the last notable clues from the Fed before the blackout period begins on Saturday.
EUR/USD nursed some of its losses stemming from the softer-than-expected CPI data from Germany and Spain with the single currency around 1.0350 as focus turns to the incoming Eurozone inflation figures.
GBP/USD rebounded off yesterday's lows but remained below 1.2000 with BoE Governor Bailey recently stating that the Gilt market is not back to normal and also noted that the shock to real incomes is pushing the UK into a recession.
USD/JPY remained steady following a recent rebound from below 138.00 and weak Industrial Production data.
Antipodeans benefitted from the softer greenback although saw some brief intraday pressure after mixed data releases including softer monthly CPI data which somewhat lessens the hawkish pressure for the RBA.
PBoC set USD/CNY mid-point at 7.1769 vs exp. 7.1790 (prev. 7.1989)

10yr UST futures traded rangebound following recent selling pressure owing to a busy corporate debt pipeline including Amazon's USD 8bln five-part offering and with the attention turning to Fed Chair Powell’s upcoming speech.
Bund futures pulled back from the prior day’s highs but held on to the 140.00 level and most of the gains seen in the aftermath of the softer German and Spanish inflation data.
10yr JGB futures were subdued with the BoJ only in the market today under its fixed rate operations and after it also maintained the amount and frequency of its scheduled purchases bond purchases for December.

Crude gradually edged higher after a larger-than-expected headline crude draw in the latest private sector inventory data, while there was plenty of attention on recent OPEC+ related commentary with the group expected to keep output levels flat at this Sunday's virtual meeting although it was also suggested that they could consider a further cut.
US Private Energy Inventory Data (bbls): Crude -7.9mln (exp. -2.8mln), Gasoline +2.9mln (exp. +1.7mln), Distillate +4.0mln (exp. +1.5mln), Cushing -0.2mln.
OPEC+ is likely to keep output levels flat at the Sunday meeting, according to WSJ citing delegates.
OPEC+ decision to meet virtually on December 4th signals that there is little likelihood of a change in policy and the virtual meeting puts focus on the pending Russian oil price cap decision on December 5th, according to a source with direct knowledge cited by Reuters.
Iraq plans to raise oil exports in H2 of 2023 by 250k BPD to reach 3.6mln BPD, while it was also stated that OPEC+ plans to cut production by 2mln BPD this month, according to the state news agency citing a SOMO official.
Spot gold traded rangebound as participants await Fed Chair Powell's speech and key US data releases.
Copper was steady as headwinds from the weak Chinese PMI data were counterbalanced by a softer dollar.

Bitcoin strengthened overnight and briefly reclaimed the USD 17,000 level where it met resistance.

NOTABLE ASIA-PAC HEADLINES

IMF's Georgieva said they may have to revise China's economic growth forecast lower.

DATA RECAP

Chinese NBS Manufacturing PMI* (Nov) 48.0 vs. Exp. 49.0 (Prev. 49.2)
Chinese NBS Non-Manufacturing PMI* (Nov) 46.7 vs. Exp. 48.0 (Prev. 48.7)
Chinese Composite PMI (Nov) 47.1 (Prev. 49.0)
Japanese Industrial O/P Prelim MM SA* (Oct) -2.6% vs. Exp. -1.5% (Prev. -1.7%)
Japanese Industrial O/P Prelim YY (Oct) 3.7% vs. Exp. 5.1% (Prev. 9.6%)
Australian CPI YY (Oct) 6.9% vs Exp. 7.4% (Prev. 7.3%)
Australian Trimmed Mean CPI YY (Oct) 5.3% vs Exp. 5.7%
Australian Construction Work Done (Q3) 2.2% vs. Exp. 1.5% (Prev. -3.8%)
Australian Building Approvals (Oct) -6.0% vs. Exp. -1.8% (Prev. -5.8%, Rev. -8.1%)

Russia's Medvedev said if NATO supplies Ukrainians with patriot missile systems and NATO personnel, they would become a legitimate target of Russian armed forces, according to Reuters.

China is on track to possess 1.5k nuclear warheads by 2035 vs current 400, which would still be beneath US and Russian holdings, according to a new Pentagon report cited by Nikkei.
China and Russian warplanes temporarily entered South Korea's air defence zone, according to Yonhap.

DATA RECAP