Newsquawk

Euro Market Open: Wall St. tech rally continued into quiet APAC trade, earnings & PMIs ahead

24 Jan 2023, 06:49 by Newsquawk Desk

APAC stocks were positive and took impetus from the tech rally on Wall Street in what was another session subject to mass market closures.
European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.3% after the cash market closed up 0.8% yesterday.
DXY remains sub-102, JPY leads the majors with USD/JPY eyeing 130 to the downside, EUR/USD and GBP/USD sit on 1.08 and 1.23 handles respectively.
ECB President Lagarde stated the Bank has made it clear interest rates will still have to rise significantly at a steady pace.
Looking ahead, highlights include German GfK, EZ, UK & US Flash PMIs, Speech from ECB's Lagarde, Earnings from Microsoft, Verizon, JNJ & General Electric, Supply from Netherlands, Germany & US, Holiday in China & Hong Kong.

US stocks rallied with the gains led by the tech sector amid a lack of catalysts heading into a heavy earnings slate and next week's FOMC meeting where the Fed is expected to slow its pace of rate hikes.
SPX +1.18% at 4,019, NDX +2.18% at 11,872, DJI +0.76% at 33,628, RUT +1.25% at 1,890.
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NOTABLE HEADLINES

USTR office said US officials continue to engage with Mexican counterparts at the highest levels to address grave concerns with Mexico's biotechnology policies, while US officials made it clear it will consider all options including formal steps to enforce its rights under the USMCA if the issue is not resolved.

APAC stocks were positive and took impetus from the tech rally on Wall Street but with trade quiet amid a lack of fresh catalysts and as many participants in the region remained absent with markets in China, Hong Kong, Taiwan, South Korea, Singapore, Malaysia and Vietnam all closed for the holiday.
ASX 200 was underpinned by strength in the real estate, tech and mining industries albeit with gains capped after a mixed NAB business survey and soft PMI data which showed a contraction in the manufacturing and services.
Nikkei 225 continued its outperformance and climbed above the 27,000 level with the index unaffected by the latest preliminary PMI data in which Manufacturing PMI contracted for the 3rd consecutive month although Services and Composite PMIs improved with the latter back in expansionary territory, while reports also noted that Japan is considering early May for its planned downgrade of COVID policy.
US equity futures flatlined (ES unch.) overnight and took a breather from the prior day's tech-led advances.
European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.3% after the cash market closed up 0.8% yesterday.

DXY was marginally softer beneath the 102.00 level in rangebound trade amid the absence of any significant drivers and with mild gains in the dollar’s major counterparts.
EUR/USD eked minimal gains after rebounding from support around 1.0850 and which followed the slew of mostly hawkish-leaning ECB commentary.
GBP/USD lacked firm direction after yesterday’s price swings with the pair trading in narrow 1.2375-1.2394 parameters overnight.
USD/JPY pulled back following recent advances but remained north of the psychological 130.00 level.
Antipodeans were kept afloat amid the positive risk tone albeit with advances limited after the mixed data from Australia and with the latest CPI data drawing closer.
Brazil's Finance Minister Haddad said President Lula and Argentina's President Fernandez requested the creation of a clearing house with a common currency to settle accounts, but added it has no name or deadline and their idea does not seek monetary unification as is the case with the Euro, according to Reuters.

10yr UST futures attempted to nurse some of their recent losses although the effort was inconsequential after the bear-flattening seen yesterday.
Bund futures languished near the prior lows following the deluge of ECB comments including from Lagarde who stated they made it clear interest rates will still have to rise significantly at a steady pace.
10yr JGB futures were subdued after taking a breather from the recent BoJ-fuelled rally and with prices not helped by softer demand at the enhanced liquidity auction.

Crude futures were flat amid the lack of drivers, although there were reports the US is mulling scrapping the next SPR sale, while the focus turns to the latest inventory numbers beginning with the private sector data due later.
US Energy Secretary Granholm said US President Biden would veto the House Republican bill on restricting strategic oil reserve releases if it passes Congress, according to The Hill.
US is weighing the cancellation of the next SPR sale, according to sources cited by Energy Intel.
Freeport LNG asked federal regulators for permission to restart the Freeport LNG export plant in Texas and said it has completed repairs to the Texas LNG plant.
Spot gold traded rangebound with price action stuck near 9-month highs.
Copper futures eked marginal gains amid the positive risk tone albeit with advances limited by the absence of key buyers in Asia including its largest purchaser, China.

Bitcoin strengthened overnight with prices back above the 23,000 level.
FBI said two hacker groups associated with North Korea were behind the USD 100mln theft from US crypto firm Harmony Horizon Bridge last June, according to Reuters.

NOTABLE ASIA-PAC HEADLINES

US President Biden's Administration reportedly confronted China's government with evidence that suggested some China SOEs may be providing assistance to Russia's war effort, according to Bloomberg.

DATA RECAP

Russian Chief of the General Staff Gerasimov said the new army plan considers threats such as Finland and Sweden's desire to join NATO, and the use of Ukraine as a tool of hybrid war against Russia, according to TASS.
US special envoy to Iran Malley said the US has no evidence that Iran resumed weaponisation, while he added the US will have more contact with China on Iran oil and is taking steps to stop Iranian oil exports.

UK is to propose carbon border tax as part of a steel industry aid package, according to FT.
Britain and the EU are unlikely to make major changes to the underlying Brexit deal, according to a report by academic body UK in a Changing Europe cited by Reuters.
ECB President Lagarde said inflation in Europe is far too high which they must bring it down and that they made it clear interest rates will still have to rise significantly at a steady pace, while she added that they will stay the course to ensure the timely return of inflation to the target.