Newsquawk

US Market Open: Crude climbs in otherwise contained trade with US data ahead

22 Dec 2022, 11:10 by Newsquawk Desk

European bourses & US futures are steady near the unchanged mark within relatively narrow ranges in limited newsflow
Crude has clawed out incremental WTD peaks, given the softer USD and latest China-COVID reports
DXY remains in proximity to 104.00, though was pushed modestly below the figure to the benefit of peers ex-GBP
EGBs lost initial recovery momentum with drivers limited while USTs retain a positive foothold
Looking ahead, highlights include US Q3 GDP and PCE, US Jobless Claims.

European bourses are under modest pressure, Euro Stoxx 50 -0.2%, in what has been a very contained session with benchmarks making limited ground either side of the unch. mark.
Sectors, are similarly mixed/contained; though, Energy outperforms given benchmark pricing while Real Estate has once again succumbed to yield action.
Stateside, futures are in-fitting with their European counterparts, ES -0.1%, with Micron -2.5% in the pre-market post-earnings.
Micron Technology Inc (MU) Q1 2023 (USD): EPS -0.04 (exp. -0.01), Revenue 4.09bln (exp. 4.11bln); to cut headcount by roughly 10% through FY23. Adj. revenue view 3.6-4bln (exp. 3.88bln). EPS view -0.72 to -0.52 (exp. -0.50). Adj. gross margin 6-11% (exp. 17.8%). Micron (MU) expect days of inventory to peak in current fiscal Q2 and gradually improve throughout the next few quarters; expect industry profitability to remain challenged through FY23. FY23 Capex view lowered to a range between 7.0-7.5bln from initial 8bln target, and down from 12bln in FY22.
TikTok's latest proposal to the US government for a security deal includes an independent board to oversee its data security operations, according to Reuters sources.
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Aussie underpinned by base metals, but off best levels as broader risk sentiment wanes, AUD/USD peaks above 0.6750 and AUD/NZD near 1.0700
DXY still straddling 104.000, but within slightly lower range to the benefit of Euro, Yen and Franc; EUR/USD retests 1.0650, USD/JPY probes 132.00 and USD/CHF pivots 0.9250.
Pound lags to circa. 1.2100 after sub-consensus UK Q3 GDP data.
PBoC set USD/CNY mid-point at 6.9713 vs exp. 6.9702 (prev. 6.9650)
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Notable FX Expiries, NY Cut:

USD/JPY: 130.00 (635M), 132.50 (1.03BN), 133.00 (225M), 134.00 (375M), 137.00 (460M)
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EU debt loses early recovery momentum with little rhyme or reason bar lack of depth due to seasonal factors, Bunds reverse from 136.20 to 135.64 and Gilts to 100.95 from 101.63.
US Treasuries hold firm in contrast and curve a tad flatter post-strong 20 year auction and pre-data, T-note nearer 113-29 overnight top than 113-19+ bottom.
Japanese government is looking to sell JGBs worth some JPY 190tln for FY23/24 on a calendar basis, and looking to make cuts in short-term bond issuance, according to a draft document cited by Reuters.
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WTI and Brent Feb’23 have managed to claw out incremental WTD peaks at USD 79.77/bbl and USD 83.66/bbl respectively, as the DXY continues to languish around and below 104.00, with the complex also benefitting from the limited macro updates re. COVID.
Governor of Canada has determined the significant adverse effects of the Sukunka coal mine cannot be mitigated, and therefore the coal mine project cannot proceed, via Reuters.
Brazil is to impose 14.88-14.93% countervailing duties on China's aluminium sheet products from March 31st 2023, according to the Chinese Commerce Ministry.
Spot gold has been unable to benefit from the Dollar’s downside and remains towards the lower-end of tight USD 1813-1820/oz parameters while silver has slipped slightly to below the USD 24/oz mark.
Despite the move in crude, base metals have been unable to benefit from the COVID update, with LME Copper modestly softer on the session.
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NOTABLE HEADLINES

ECB's de Guindos says, "the steps we have taken so far are going to have an impact on inflation, but we still need to do more".

NOTABLE DATA

UK GDP QQ (Q3) -0.3% vs. Exp. -0.2% (Prev. -0.2%); YY 1.9% vs. Exp. 2.4% (Prev. 2.4%)

SEC is reportedly heightening the scrutiny of auditors crypto work, via WSJ; concerned that crypto firms are overstating the limited work of auditors.

Russian State Nuclear Energy Corporation says discussions with the IAEA brought together views on the establishment of a buffer zone around Zaporizhzhia, according to Sky News Arabia.

APAC stocks traded with gains across the board following the positive lead from Wall Street.
ASX 200 saw gains across almost all of its sectors aside from Material names and gold miners.
Nikkei 225 eked gains as Real Estate names led the charge, but with gains capped as the JPY held onto most of its recent strength.
Hang Seng and Shanghai Comp were firmer with the former opening with gains north of 2% as property names cheered reports via state media that China is to push the construction of major projects and equipment upgrades. The mainland meanwhile coattailed on the broader modest risk appetite seen after the US performance.

NOTABLE ASIA-PAC HEADLINES

China reports zero new COVID deaths in the mainland on Dec 21st vs zero a day earlier, according to Reuters.
China to cut quarantine for overseas travellers as of January, via Bloomberg.
PBoC injected CNY 4bln via 7-day reverse repos with the rate maintained at 2.00%; injects CNY 153bln via 14-day reverse repos with the rate maintained at 2.15%; daily net injection CNY 155bln.
Japanese government raises FY23 GDP growth forecast to 1.5% (from 1.1% in July); maintains FY23 Overall CPI forecast at 1.7%; cuts FY22 GDP growth forecast to 1.7% (from 2.0% in July), according to Reuters.
Japanese PM Kishida said he wants Japanese industries to carry out investments of JPY 100tln as early as possible, according to Reuters.
Tokyo will raise COVID-19 medical alert to the highest level, according to NHK.

DATA RECAP

South Korean PPI Growth YY (Nov) 6.3% (Prev. 7.3%, Rev. 7.3%); MM (Nov) -0.2% (Prev. 0.5%, Rev. 0.5%)