Newsquawk

Europe Market Open: Asian stocks are mostly kept afloat after yields and oil prices eased

29 Sep 2023, 06:20 by Newsquawk Desk

APAC stocks mostly took impetus from Wall St’s positive lead as yields and oil prices declined from recent peaks.
US Senate bill to avert a government shutdown garnered enough votes to advance, as expected.
European equity futures are indicative of a contained open with Euro Stoxx 50 future flat after the cash market closed up 0.7% yesterday.
DXY tested 106 to the downside, major peers trade on the front foot vs. the greenback, antipodeans outperform.
Looking ahead, highlights include German Retail Sales & Unemployment Rate, UK GDP, French, Italian & EZ CPI, US PCE, Chicago PMI, UoM Sentiment, Speeches from Fed’s Barkin, Williams & ECB’s Lagarde, Earnings from Carnival Corp.

US stocks traded higher with the major indices led by outperformance in the Nasdaq as yields eased and oil prices retreated from recent peaks although price action was somewhat choppy heading into month-end and following the mixed bag of data releases stateside, while a shutdown threat also looms.
SPX +0.59% at 4,299, NDX +0.84% at 14,702, DJI +0.35% at 33,666, RUT +0.87% at 1,794.
Click here for a detailed summary.

NOTABLE US HEADLINES

Fed's Barkin (non-voter) said a government shutdown would create uncertainty and the lack of data due to a shutdown would complicate understanding the economy. Barkin also stated that it is too soon to say what is next for monetary policy and if another hike is needed, while he added the economy will drive what the Fed decides on monetary policy.
US Senate bill to avert a government shutdown garnered enough votes to advance, as expected.
US House passed State Department, Defense and Homeland appropriations bills.
US House GOP hardliners are reportedly plotting an attempt to replace House Speaker McCarthy with one of his deputies as early as next week as a shutdown looms, according to the Washington Post.
US President Biden's top aides were questioned in an inquiry into handling of documents including Steve Ricchetti and National Security Adviser Sullivan, according to NYT

APAC stocks mostly took impetus from Wall St’s positive lead after risk appetite was spurred as yields and oil prices declined from recent peaks but with some of the gains in the region capped heading into quarter-end and amid several holiday closures.
ASX 200 was kept afloat by outperformance in the mining and materials sectors but with trade constricted amid quasi-holiday conditions with Victoria state on a public holiday.
Nikkei 225 failed to sustain early gains and pulled back from resistance around the 32,000 level despite several encouraging data releases.
Hang Seng outperformed as property and tech surged after the recent easing of yields and following further supportive measures by Chinese authorities, while the index was unfazed by the absence of mainland participants and Stock Connect flows due to the Mid-Autumn Festival and next week’s National Day holidays.
US equity futures were choppy but ultimately kept afloat ahead of more data and Fed speak.
European equity futures are indicative of a contained open with Euro Stoxx 50 future flat after the cash market closed up 0.7% yesterday.

DXY remained pressured and tested support at the 106.00 level after the recent easing of yields, while the data releases stateside were mixed and the latest Fed rhetoric was predominantly neutral. Furthermore, attention turns to Core PCE data and the looming government shutdown deadline.
EUR/USD extended on its rebound from a floor near the 1.0500 level amid a softer dollar.
GBP/USD was firmer after it reclaimed the 1.2200 handle alongside strength in cyclical peers.
USD/JPY traded sideways despite the deluge of data releases which were mostly encouraging.
Antipodeans outperformed amid the mostly positive risk tone, gains in some metal prices and heading into next week’s RBA and RBNZ meetings.
Japanese Finance Minister Suzuki said don't have a defence line in dealing with FX moves and that current FX moves suggest yen's weakness has progressed, according to Reuters.
Banxico kept rates unchanged as expected at 11.25% and repeated that it considers it will be necessary to maintain the reference rate at the current level for an extended period.

10yr UST futures were uneventful after the prior day’s recovery momentum stalled at the 108.00 level, while participants now look to the Fed’s preferred inflation gauge and the shutdown deadline.
Bund futures nursed some of the prior day’s losses ahead of the latest Eurozone inflation data.
10yr JGB futures were lower amid the mild rises in Japanese yields, while the late announcement of an unscheduled BoJ purchase operation only provided brief support.

Crude futures were rangebound and took a breather following their recent pullback.
UK treasury minister Penn said the efficacy of the Russian oil price cap must be kept under review.
US President Biden administration's 5yr offshore oil plan will be released on Friday but does not include any sales for 2024 and will have no more than 1 auction in each of the final four years, according to Reuters sources.
Spot gold traded sideways and failed to take advantage of the dollar's recent retreat.
Copper futures extended on the prior day's gains after benefitting from the risk appetite.

Bitcoin marginally eased back after it briefly reclaimed the USD 27,000 level.

NOTABLE ASIA-PAC HEADLINES

China proposed relaxing some rules concerning the transfer of data abroad, according to Nikkei.

DATA RECAP

Tokyo CPI YY (Sep) 2.8% vs. Exp. 2.7% (Prev. 2.9%)
Tokyo CPI Ex. Fresh Food YY (Sep) 2.5% vs. Exp. 2.6% (Prev. 2.8%)
Tokyo CPI Ex. Fresh Food & Energy YY (Sep) 3.8% vs. Exp. 3.9% (Prev. 4.0%)
Japanese Industrial Production MM (Aug P) 0.0% vs. Exp. -0.8% (Prev. -1.8%)
Japanese Industrial Production YY (Aug P) -3.8% vs. Exp. -4.6% (Prev. -2.4%)
Japanese Retail Sales MM (Aug) 0.1% vs. Exp. 0.4% (Prev. 2.1%, Rev. 2.2%)
Japanese Retail Sales YY (Aug) 7.0% vs. Exp. 6.6% (Prev. 6.8%, Rev. 7.0%)
Japanese Unemployment Rate (Aug) 2.7% vs. Exp. 2.6% (Prev. 2.7%)

US Assistant Secretary of State Kritenbrink met with China's Vice Foreign Minister in Washington and the two sides held candid, in-depth and constructive consultations on regional issues. Furthermore, Kritenbrink reaffirmed the importance of maintaining peace and stability across the Taiwan Strait and the sides discussed regional issues including Myanmar, North Korea and maritime matters.
US State Department senior official said they have seen a clear and upward trend of Chinese provocations in the South China Sea, while it was separately reported that the US accused China of launching a global information war, according to FT.

DATA RECAP