Newsquawk

Europe Market Open: Mixed APAC performance, US tech rallied despite yield upside

22 Aug 2023, 06:30 by Newsquawk Desk

APAC stocks traded mixed following a similar performance stateside where tech rallied.
WSJ's Timiraos tweeted that he believes Fed Chair Powell is unlikely to speak about higher neutral rates at the Jackson Hole Symposium.
European equity futures are indicative of a higher open with the Eurostoxx 50 future +0.5% after the cash market closed up by 0.3% yesterday.
DXY is a touch softer but still on a 103 handle, EUR/USD is back above 1.09, USD/JPY lingers just below 146.
Looking ahead, highlights include Richmond Fed Index, Fed Discount Rate Minutes, Speeches from Fed’s Barkin, Bowman & Goolsbee, Earnings from Lowe’s Companies.

US stocks were mixed albeit predominantly firmer with big tech leading the strength in US indices despite the upside in US yields, while the small-cap Russell 2k underperformed. News catalysts were very light and therefore allowed more attention on the higher US neutral rate debate which was ignited by a WSJ/Timiraos article over the weekend although Timiraos later tweeted reasons why he believed that Fed Chair Powell is unlikely to speak about higher neutral rates at the Jackson Hole Symposium.
SPX +0.69% at 4,400, NDX +1.65% at 14937, DJIA -0.11% at 34,464, RUT -0.18% at 1,856.
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NOTABLE HEADLINES

WSJ's Timiraos tweeted reasons why he believes Fed Chair Powell is unlikely to speak about higher neutral rates at Jackson Hole.
S&P joins Moody's in cutting US banks amid tough environment with Keycorp (KEY) and Comerica (CMA) among the five banks cut by S&P, according to Bloomberg

APAC stocks traded mixed following a similar performance stateside where tech rallied but the gains in the broader market were capped amid further upside in global yields.
ASX 200 was rangebound amid a slew of earnings releases including a drop in profits for mining giant BHP.
Nikkei 225 was underpinned as tech names in the Asia-Pac region took inspiration from US peers and with SoftBank among the notable performers after its Arm unit filed for a US IPO.
Hang Seng and Shanghai Comp were indecisive as participants digested the latest support efforts from Premier Li and the State Council, as well as the PBoC’s net liquidity drain.
US equity futures were uneventful as the Emini S&P took a breather after yesterday's fluctuations and Emini Nasdaq 100 held on to most of the gains from its recent outperformance.
European equity futures are indicative of a higher open with the Eurostoxx 50 future +0.5% after the cash market closed up by 0.3% yesterday.

DXY slightly softened but managed to stay on a 103 handle in rangebound trade amid a lack of fresh catalysts.
EUR/USD edged mild gains which helped the single currency reclaim the 1.0900 status.
GBP/USD extended on yesterday’s peak as it continued to scale the 1.2700 handle where price action has mostly been stuck during the past couple of weeks.
USD/JPY marginally pulled back after recent advances and battled to remain above 146.00.
Antipodeans were rangebound amid the mixed risk tone and lack of any relevant data releases.
PBoC set USD/CNY mid-point at 7.1992 vs exp. 7.3097 (prev. 7.1987)
Turkish President Erdogan said the rise in inflation is temporary and they discussed steps to take against the rise in prices during a cabinet meeting.

10yr UST futures briefly dipped beneath the 109.00 level as the US 10yr yield touched its highest since 2007.
Bund futures attempted to nurse some of their recent losses although the rebound lacked any meaningful strength amid the rising global yield environment.
10yr JGB futures were subdued with prices not helped by weaker demand at the enhanced liquidity auction.

Crude futures languished at yesterday's lows but with the downside stemmed by a floor in WTI around USD 80/bbl.
Woodside Energy (WDS AT) CEO said they continue to have constructive bargaining talks with unions regarding LNG facilities in Australia and noted there is a wide range of possible strike actions that might be taken at LNG facilities. Woodside CEO said demands of unions are focused on working conditions, certainty and wages, as well as noted that they have been spending a lot of time listening and trying to understand the key areas of concern, while the CEO added they are proceeding with goodwill and respect, but also have a duty to shareholders.
NHC said tropical depression Nine is about 260 miles east-southeast of Port Mansfield, Texas with maximum sustained winds of 35mph, while it added that strengthening is forecast and the system is forecast to be a tropical storm before it reaches the Texas coast with tropical storm winds and heavy rain expected beginning early Tuesday.
Spot gold remained afloat amid the softer dollar and continues to eye the key USD 1900/oz level.
Copper futures were indecisive in rangebound trade amid the mixed risk appetite in Asia.

Bitcoin was lacklustre and just about remained above the USD 26,000 level.
Coinbase (COIN) said it is increasing its support for stablecoins with an investment in Circle which will take full control of USDC issuance and governance, while Coinbase and Circle will also maintain a commercial relationship.

NOTABLE ASIA-PAC HEADLINES

BoJ Governor Ueda met with Japanese PM Kishida and did not discuss FX volatility in the meeting but explained to him the BoJ's July policy decision which Kishida said he understood the July policy move. PM Kishida asked questions on various aspects of the economy and financial developments which Ueda answered as much as he could although Ueda wanted to refrain from mentioning exactly what was discussed and noted his predecessor Kuroda had met with the PM on a regular basis and this meeting was of the same nature, according to Reuters.

Russia said its military jammed two Ukrainian drones which crashed into the Black Sea and a warplane destroyed a Ukrainian reconnaissance ship near Russian gas production facilities in the Black Sea, according to Reuters.
Explosions were reported on the outskirts of Moscow around Strogino and air defences shot down a drone over Krasnogorsk, Moscow oblast, while TASS noted all Moscow airports were closed for arriving and departing flights.
North Korea notified Japan of a plan to launch a satellite on August 24th-31st, according to NHK.
North Korea is said waiting for the right time to punish the US and South Korea, while it was suggested that US military drills could trigger ‘thermonuclear war’, according to commentary in KCNA.
South Korea urged North Korea to immediately abandon the plan to launch a satellite, while Japanese PM Kishida also called on North Korea to stop its satellite launch and said the possible launch is extremely regrettable. Furthermore, Kishida said they are preparing to station PAC3 and Self-Defence Force Aegis ships as a precaution.