Newsquawk

Euro Market Open: Mixed trade with no Wall St. handover, Chinese data topped estimates

17 Jan 2023, 06:50 by Newsquawk Desk

APAC stocks traded mixed in which most bourses lacked firm direction in the absence of a lead from the US.
Chinese GDP, Industrial Production and Retail Sales figures all topped estimates.
European equity futures are indicative of a softer open with the Euro Stoxx 50 -0.2% after the cash market closed up 0.2% yesterday.
DXY is steady on a 102 handle, EUR/USD maintains 1.08 status, JPY narrowly lags G10 FX whilst antipodeans lead.
Highlights include UK Unemployment, German ZEW, Canadian CPI, Speeches from Fed's Williams, ECB's Centeno & Chinese Vice Premier Liu, Supply from UK & Germany, Earnings from Goldman Sachs, Morgan Stanley & United Airlines.

NOTABLE HEADLINES

US President Biden approved the Georgia disaster declaration, according to a statement by the White House.

APAC stocks traded mixed in which most bourses lacked firm direction in the absence of a lead from the US due to MLK Jr. Day and despite the better-than-expected Chinese economic growth and activity data.
ASX 200 was subdued with the index contained after it hit resistance at the 7,400 level, while an improvement in Westpac Consumer Confidence and an increase in Rio Tinto’s quarterly output did little to inspire trade.
Nikkei 225 outperformed with strength in the auto sector driving the advances and as the BoJ kicked off its 2-day policy meeting with markets second-guessing what the central bank will decide regarding its ultra-easy policy.
Hang Seng and Shanghai Comp were lacklustre despite encouraging data in which Chinese GDP, Industrial Production and Retail Sales figures all topped estimates. Nonetheless, the 3.0% growth for 2022 was much lower than the ‘abandoned’ target of around 5.5% and President Xi’s hint of at least 4.4% growth, while China also noted its population shrunk for the first time since 1961 and the death rate was the highest since 1974.
US equity futures were lacklustre (ES -0.3%) after the key Chinese data releases failed to spur risk appetite.
European equity futures are indicative of a softer open with the Euro Stoxx 50 -0.2% after the cash market closed up 0.2% yesterday.

DXY eked marginal gains above the 102 mark overnight amid the flimsy risk tone and as trade picked up from the holiday lull.
EUR/USD was choppy and briefly approached a retest of short-term support at 1.0800.
GBP/USD traded indecisively on both sides of 1.2200 after a UK PM spokesperson tempered expectations and speculation regarding talks on Northern Ireland and noted there are still significant gaps between the sides.
USD/JPY initially strengthened but later faded most of the advances on likely positioning ahead of the BoJ.
Antipodeans lead the majors with support seen for AUD/USD from the Chinese data releases.
PBoC set USD/CNY mid-point at 6.7222 vs exp. 6.7234 (prev. 6.7135)

10yr UST futures were subdued around Monday’s lows.
Bund futures lacked firm direction in which prices reverted to yesterday's focal point at the 138.00 level.
10yr JGB futures were rangebound with prices not helped by the softer demand at the enhanced liquidity auction and with participants lacking commitment as they await tomorrow’s BoJ policy meeting conclusion.

Crude futures gradually nursed losses throughout the session albeit with price action contained amid a lack of energy-specific newsflow.
Spot gold traded rangebound with marginal pressure from a brief pick-up in the greenback.
Copper futures extended on the prior day's declines despite the better-than-expected Chinese data.

Bitcoin traded flat as prices took a breather following last week's rally to above the 21,000 level.
Japan urged for the US and EU to regulate crypto like banks, according to Bloomberg.

NOTABLE ASIA-PAC HEADLINES

PBoC injected CNY 205bln via 7-day reverse repos with the rate kept at 2.00% and injected CNY 301bln via 14-day reverse repos with the rate kept at 2.15% for a CNY 504bln net injection.
China's Customs said GDP grew 3.0% Y/Y in 2022 and that China was able to stabilise the economy, but added that the foundation for economic recovery is not solid yet, according to Reuters.
China's stats bureau stated China's population in 2022 shrunk for the first time since 1961 and the death rate was the highest since 1974, although the stats bureau chief later noted they should not worry about China's population decline and overall labour supply still exceeds demand. The stats bureau chief also said that benign inflation in China will create room for macro policies and that the property sector's drag on economic growth this year will not be larger than in 2022, according to Reuters.

DATA RECAP

Ukrainian President Zelensky said the attack in Dnipro underscores the need for new and faster decisions on weapons supplies, while he added they expect key decisions from partners on arms supplies at the Ramstein meeting.
Russia deployed an SU-27 fighter plane to escort a German naval aircraft over the Baltic, according to Interfax.
UK is reviewing whether to designate Iran’s Revolutionary Guards as a terrorist organisation, according to FT.

NOTABLE HEADLINES

UK PM Sunak backed down on the online safety bill following a Tory rebellion, according to Telegraph.
UK's post-Brexit economy is reportedly facing a shortfall of over 300k workers, according to an estimate by the UK in a Changing Europe and the Centre for European Reform think tanks cited by FT.
National Education Union announced that teachers will conduct strikes over pay in England and Wales on certain dates in February and March, while the Royal College of Nursing union announced additional strike dates on February 6th and 7th as nurses prepare to conduct strike action this week, according to the BBC.
ECB's Lane said they need to bring rates into restrictive territory with rates now at "ballpark" neutral, while he noted that rates must be raised high enough to restrict growth, according to an interview with FT.
ECB's de Cos reiterated that significant rate hikes will continue and incoming data will determine policy decisions.