Newsquawk

Euro Market Open: Positive bias to APAC trade despite softer US futures post-Intel, PCE ahead

27 Jan 2023, 06:48 by Newsquawk Desk

APAC stocks traded with a positive bias following the encouraging handover from Wall Street which saw the Nasdaq lead the charge.
European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.3% after the cash market closed up 0.6% yesterday.
US equity futures were softer (ES -0.3%) as participants reflected on Intel's earnings miss and weak guidance.
DXY sits just below the 102 mark, major pairs are largely contained with JPY top of the pile and CHF lagging.
Looking ahead, highlights include EZ M3, US PCE Price Index, Personal Income & Consumption, Speech from ECB's Lagarde (No Text), Holiday in China (Lunar New Year).

US stocks were firmer and closed at highs despite the choppy open amid the deluge of US data releases which mostly came in hot, while attention was also on earnings with double-digit gains in Tesla which helped the outperformance of the NDX. Furthermore, there were also decent numbers from Mastercard (MA) and American Airlines (AAL), although Southwest Airlines (LUV) and Dow (DOW) provided weak results.
SPX +1.10% at 4,060, NDX +2.00% at 12,051, DJI +0.61% at 33,948, RUT +0.67% at 1,903.
Click here for a detailed summary.

NOTABLE HEADLINES

US House GOP leaders consider extending debt limit to September 30th, according to Bloomberg.
US House Speaker McCarthy said President Biden should set a date to discuss the debt ceiling increase.

APAC stocks traded with a positive bias after the mostly strong US data releases, albeit with advances capped as participants also digested earnings including disappointing results from Intel, and firm Tokyo CPI data.
ASX 200 was marginally higher on return from holiday with the index propped up by tech and financials.
Nikkei 225 lacked decisiveness following firm Tokyo CPI data in which core inflation rose at its fastest pace since 1981 and further added to the pressure for the BoJ to rethink its ultra-easy policy.
Hang Seng was choppy and struggled to sustain early gains after data showed a wider contraction in Hong Kong’s exports and with Japan and the Netherlands set to join the US’s chip curbs on China.
US equity futures were softer (ES -0.3%) as participants reflected on Intel's earnings miss and weak guidance.
European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.3% after the cash market closed up 0.6% yesterday.

DXY is lingering just below the 102 mark after venturing as high as 102.18 yesterday, while the attention now shifts to the PCE Price data.
EUR/USD was subdued after a recent pullback from 9-month highs and with resistance at 1.0900,
GBP/USD marginally softened and continued its swings through the 1.2400 level.
USD/JPY retreated after Tokyo Core CPI rose at its fastest pace in over four decades, but later recovered some of the losses with the help of a stronger dollar and BoJ's fund supply operation announcement.
Antipodeans were choppy after softer PPI data from Australia and a somewhat improved ANZ Business survey for New Zealand which remained in negative territory.

10yr UST futures extended their losses after the strong US data underscored hopes of a soft landing.
Bund futures remained subdued and prodded their lows further beneath the 138.00 level.
10yr JGB futures were pressured following the firmer-than-expected Tokyo CPI data which lifted the 10yr JGB yield closer to the BoJ’s target ceiling, although some of the moves were later faded after the BoJ announced to conduct funds-supplying operations against pooled collateral on Tuesday.

Crude futures were rangebound with mild upside after strong US data supported the demand outlook.
OPEC President said the group needs to be careful on quota decisions, according to Bloomberg.
EU proposed a price cap on Russian premium oil products of USD 100/bbl and USD 45/bbl on discounted oil products, while EU governments are to discuss the proposals today before entry into force on February 5th.
Spot gold marginally weakened with prices pressured by a firmer greenback.
Copper futures faded the prior day's gains despite the mostly constructive mood in Asia.

NOTABLE ASIA-PAC HEADLINES

Japan and the Netherlands agreed to join the US on China chip curbs with US, Dutch and Japanese officials set to conclude talks as early as today, while the Netherlands is to expand restrictions on ASML (ASML NA) and Japan will set similar limits on Nikon (7731 JT), according to Bloomberg and Reuters.
US Senators will have a classified briefing on China on Feb. 15th, according to an aide cited by Statenews Room.

DATA RECAP

Tokyo CPI YY (Jan) 4.4% vs. Exp. 4.0% (Prev. 4.0%)
Tokyo CPI Ex. Fresh Food YY (Jan) 4.3% vs. Exp. 4.2% (Prev. 4.0%)
Tokyo CPI Ex. Fresh Food & Energy YY (Jan) 3.0% vs. Exp. 2.9% (Prev. 2.7%)
Australian PPI QQ (Q4) 0.7% (Prev. 1.9%)
Australian PPI YY (Q4) 5.8% (Prev. 6.4%)
New Zealand ANZ Business Confidence (Jan) -52% (Prev. -70.2%)
New Zealand ANZ Activity Outlook (Jan) -15.8% (Prev. -25.6%)

Japan's is to impose additional sanctions against Russian individuals and entities, while it will impose an additional export ban on military-related items to Russia as part of sanctions. according to Reuters.
EU proposed new sanctions on Belarus targeting energy and tech, according to Bloomberg.

UK Chancellor Hunt will reject calls from some Tory MPs to bring forward tax cuts and reaffirm the plan to halve inflation, according to The Telegraph.
UK Chancellor Hunt said inflation is expected to fall as a result of tough decisions made in the autumn budget and it is critical to maintain a disciplined approach in order to reduce inflation, according to Reuters. Furthermore, Hunt will confirm on Friday that post-Brexit reforms to Solvency II will be implemented in the months ahead and will say that the UK should not shy away from the biggest challenge it faces which is poor productivity