Newsquawk

Europe Market Open: APAC trades higher following Wall Street strength; US CPI & UK Jobs Report ahead

13 Jun 2023, 06:25 by Newsquawk Desk

APAC stocks eventually traded mostly higher following the gains on Wall St where the S&P 500 and Nasdaq 100 notched fresh YTD highs.
Nikkei 225 resumed its outperformance and breached the 33,000 level for the first time in over three decades.
European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.7% after the cash market closed up 0.6% yesterday.
DXY is a touch softer in quiet trade, EUR/USD is capped by resistance ahead of 1.08, GBP awaits UK jobs metrics.
Looking ahead, highlights include US CPI, UK Jobs Report, EU & German ZEW, Speeches from BoE's Bailey, Dhingra & ECB's Enria, Supply from Italy, UK, German & US.

US stocks were firmer in which the SPX and NDX notched fresh YTD highs with the gains led by big tech as yields eventually moved lower ahead of US CPI data and the FOMC. There was little key data or weekend catalysts for traders to dig into although the NY Fed's consumer inflation expectation survey was the 'highlight' ahead of Tuesday's CPI release in which the survey was mixed as it showed softer 1yr inflation expectations, but a higher medium and longer-term view.
SPX +0.93% at 4,339, NDX +1.76% at 14,784, DJI +0.56% at 34,066, RUT +0.4% at 1,873.
Click here for a detailed summary.

NOTABLE HEADLINES

US House Republican hardliners said they will allow chamber votes this week on partisan measures involving gas stoves, pistol braces and regulations, while they stand ready to block other measures while seeking a power-sharing deal with House Speaker McCarthy. It was also reported that House Speaker McCarthy stated Republicans have the votes to move forward on stalled legislation this week and he agreed to continue to talk to hardliner conservatives, according to Reuters.

APAC stocks eventually traded mostly higher following the gains on Wall St where the S&P 500 and Nasdaq 100 rose to their best levels in a year with big tech supported as yields softened ahead of the upcoming risk events, while the region also digested the PBoC’s cut to its 7-day reverse repo rate.
ASX 200 just about kept afloat but with upside capped after mixed data in which Westpac Consumer Confidence improved but remained near recession lows and NAB Business Confidence deteriorated.
Nikkei 225 resumed its outperformance and breached the 33,000 level for the first time in over three decades amid strength in automakers and with SoftBank spearheading the advances on news that Intel is to discuss being an anchor investor in the Arm IPO.
Hang Seng and Shanghai Comp. were both initially subdued despite the PBoC’s cut to its short-term interbank funding rate which raises the prospects of a cut to the MLF rate and benchmark LPR, with sentiment dampened by ongoing growth concerns and lingering frictions after the US added 43 entities to its export control list.
US equity futures marginally extended on the prior day's highs with the Emini S&P eyeing the 4,400 level.
European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.7% after the cash market closed up 0.6% yesterday.

DXY slightly softened in rangebound trade ahead of the looming risk events beginning the CPI data on Tuesday on which, Citi has noted that markets are mispricing downside risks for inflation.
EUR/USD was firmer but with gains capped after recent choppy price action and amid resistance ahead of the 1.0800 handle.
GBP/USD nursed some of its recent losses, while participants await UK jobs and average earnings data.
USD/JPY was indecisive after yesterday's tentative mood with recent price action largely at the whim of yields.
Antipodeans eventually edged higher albeit with advances restricted amid the cautious mood, mixed data from Australia and a softer CNY after the PBoC’s 7-day Reverse Repo Rate cut.
PBoC set USD/CNY mid-point at 7.1498 vs exp. 7.1490 (prev. 7.1212)

10yr UST futures remained afloat after yesterday’s bull-steepening which was facilitated by the recent tumble in oil prices and positioning into the upcoming CPI data and FOMC meeting.
Bund futures continued to edge higher after rebounding off support around the 134.00 level.
10yr JGB futures tracked the gains in global counterparts and with stable demand seen at the enhanced auction for super-long JGBs.

Crude futures received some respite overnight although the recovery was insignificant compared to yesterday's 4% drop.
Spot gold was rangebound overnight with participants tentative ahead of the looming key risk events.
Copper futures were gradually supported after the PBoC cut short-term borrowing costs for the first time since August.

Bitcoin traded with mild gains overnight and reclaimed the USD 26,000 level.

NOTABLE ASIA-PAC HEADLINES

PBoC injected CNY 2bln via 7-day reverse repos and cut the rate by 10bps to 1.90% from 2.00%.
US Pentagon spokesperson Kirby said the bilateral relationship between US-China is tense right now.

DATA RECAP

Ukrainian air defence systems were engaged in repelling air attacks in the Kyiv region, according to the region's military administration, while it was also reported that Russia conducted strikes on the city of Kryvyi Rih, according to the mayor.
Latest US aid package to Ukraine will include more Bradley and Stryker fighting vehicles, according to NYT.
Poland said NATO should respond to Russia moving nukes to Belarus.
US Central Command said a helicopter mishap in Northeastern Syria injured 22 US service members on June 11th and the cause is under investigation although there was no enemy fire reported, according to Reuters.

NOTABLE HEADLINES

EU's Sefcovic warned that barriers between the UK and EU are likely to deepen further despite the resolution of a diplomatic stand-off over Northern Ireland creating a “new spirit” in relations, according to FT