• APAC stocks were mixed as participants digested the latest bout of central bank rate hikes and a slew of earnings releases; strong Chinese data failed to inspire.
• Nasdaq 100 (-1.4%) futures pressured as tech giants Apple, Alphabet and Amazon all fell in extended trade post-earnings.
• European equity futures are indicative of a marginally softer open with the Euro Stoxx 50 -0.1% after the cash market closed up 1.7% yesterday.
• FX markets were relatively contained overnight, DXY sits on a 101 handle, EUR/USD is back below 1.09.
• Looking ahead, highlights include US Labour Market Report, ISM Services PMI, ECB SPF, Speeches from Fed's Daly, BoE's Pill & ECB's Elderson, Earnings from Caixabank, Intesa Sanpaolo, Sanofi, CIGNA, LyondellBasell & Regeneron.

US TRADE

• US stocks were mostly higher in the aftermath of the recent slew of central bank meetings including the FOMC on Wednesday and with traders quick to look past the BoE and ECB's 50bps hikes and instead focus on the dovish tidbits. Furthermore, there was significant outperformance in tech stocks after META shares surged post-earnings which saw the tech giant add around 30% to its market cap at the intraday peaks.
• SPX +1.47% at 4,179, NDX +3.56% at 12,803, DJIA -0.11% at 34,053, RUT +2.06% at 2,001.
• Click here for a detailed summary.

NOTABLE HEADLINES/EARNINGS

• US CFTC said the weekly commitments of traders report will be delayed due to the ransomware attack on ION Trading UK, according to Reuters.
• Apple Inc (AAPL) Q1 2023 (USD): EPS 1.88 (exp. 1.94), Revenue 117.15bln (exp. 121.1bln), Products 96.39bln (exp. 98.98bln), iPhone 65.78bln (exp. 68.3bln), Mac 7.74bln (exp. 9.72bln), iPad 9.40bln (exp. 7.78bln). Co. said Q2 2023 revenue growth will be higher than the previous year and it sees a 5% impact from FX rates in Q2, while it expects iPhone revenue growth to accelerate in Q2 compared to Q1. Shares were lower by 3.2% after-hours
• Alphabet Inc (GOOGL) Q4 2022 (USD): EPS 1.05 (exp. 1.18), Revenue 76.05bln (exp. 76.53bln). Google advertising 59.04bln (exp. 60.64bln). Significant work underway to improve all aspects of cost structure, in support of investments in highest growth priorities. Shares were lower by4.6% after-hours
• Amazon.com Inc (AMZN) Q4 2022 (USD): EPS 0.03 (exp. 0.18), Revenue 149.2bln (exp. 145.42bln).AWS net sales USD 21.38bln (exp. 21.76bln). Co. said in the short-term, it faces an uncertain economy but remain quite optimistic about the long-term opportunities for the Co. Shares were lower by 5.1% after-hours
• Qualcomm Inc (QCOM) Q1 2023 (USD): Adj. EPS 2.37 (exp. 2.34), Revenue 9.46bln (exp. 9.6bln).Shares were lower by 3.1% after-hours

APAC TRADE

EQUITIES

• APAC stocks were mixed as participants digested the latest bout of central bank rate hikes and a slew of earnings releases, while strong Chinese Caixin Services and Composite PMI data also failed to inspire.
• ASX 200 was led by healthcare and real estate, while the top-weighted financial sector also benefitted amid reports of early merger talks between regional lenders Bank of Queensland and Bendigo & Adelaide Bank.
• Nikkei 225 briefly breached the 27,500 level as earnings remained in focus with Sony among the best performers after it reported higher 9-month profits, as well as raised its FY net guidance and PS5 sales target.
• Hang Seng and Shanghai Comp. weakened despite the easing of border restrictions between mainland China, Hong Kong and Macau, while the rebound in Chinese Caixin PMI data also failed to spur risk appetite after the bout of global central bank policy tightening and with China’s Commerce Ministry warning that the nation’s imports and exports face an extremely severe environment on slowing external demand.
• US equity futures (ES -0.5%) were subdued with Nasdaq 100 (-1.4%) futures pressured as tech giants Apple, Alphabet and Amazon all fell in extended trade after they mostly missed on their top and bottom lines.
• European equity futures are indicative of a marginally softer open with the Euro Stoxx 50 -0.1% after the cash market closed up 1.7% yesterday.

FX

• DXY approached closer to the 102.00 level after recouping post-FOMC losses in the aftermath of the BoE and ECB rate decisions and press conferences which pressured gilts and bund yields, while the recent data releases from the US were mostly encouraging and the attention now shifts to the incoming NFP jobs report.
• EUR/USD remained subdued and trickled to beneath 1.0900 despite the 50bps rate hike by the ECB which also signalled a similar adjustment in March, as Lagarde’s remarks provided some confusion and a more balanced outlook for inflation and growth.
• GBP/USD continued its declines and tested 1.2200 to the downside after the BoE rate decision in which it hiked by 50bps, as expected, but dropped its reference to responding forcefully as necessary.
• USD/JPY was rangebound as the Japanese currency held its own against the firmer greenback owing to the more favourable yield environment.
• Antipodeans were contained amid the mixed risk appetite and recent commodity weakness.
• PBoC set USD/CNY mid-point at 6.7382 vs exp. 6.7389 (prev. 6.7130)

FIXED INCOME

• 10yr UST futures were uneventful with prices attempting a modest step higher after the choppy performance in the aftermath of this week’s central bank updates.
• Bund futures futures plateaued overnight but held on to the gains from the BoE and ECB meetings where markets zoned in on the dovish tweaks to the language.
• 10yr JGB futures traded higher as they took their cues from global peers and with the BoJ also present in the market for over JPY 1.6tln of JGBs on top of its daily fixed-rate operations.

COMMODITIES

• Crude futures were indecisive with price action rangebound in the absence of energy-specific catalysts.
• Spot gold remained subdued after the bout of central bank rate hikes and dollar strength.
• Copper futures nursed some of its recent losses but with the recovery limited by the mixed risk sentiment and glum mood in its largest purchaser China.

CRYPTO

• Bitcoin traded indecisively with price action choppy after the recent pullback from the 24,000 level.

NOTABLE ASIA-PAC HEADLINES

• Hong Kong Macau Affairs Office said will drop cross-border restrictions between the mainland, Hong Kong and Macau, as well as end pre-arrival PCR testing for some travellers and will resume group tours effective February 6th. Hong Kong Chief Executive Lee also announced that all border points between mainland China and Hong Kong are to resume without quotas on travel, according to Reuters.

DATA RECAP

• Chinese Caixin Services PMI (Jan) 52.9 vs Exp. 51.0 (Prev. 48.0)
• Chinese Caixin Composite PMI (Jan) 51.1 (Prev. 48.3)

GEOPOLITICS

• US is tracking a suspected Chinese spy balloon which entered US airspace a couple of days ago which US military officials recommended to not shoot down because of safety risks, while President Biden was briefed regarding the spy balloon and asked the military to present options, according to a senior administration official cited by Reuters. It was later reported that Canada's Department of National Defence was monitoring a possible 2nd balloon incident.
• US CIA Director Burns said China is the biggest geopolitical challenge that the US faces and the CIA assessed that Chinese President Xi has been a little sobered by Ukraine but has serious focus and ambition on Taiwan, according to Reuters.