• APAC stocks were mostly positive but with gains capped as markets digested a slew of earnings releases and the recent upside in global yields.
• European equity futures are indicative of a softer open with Euro Stoxx 50 future -0.1% after the cash market closed up 2.2% on Wednesday.
• DXY is back on a 103 handle, EUR/USD failed to sustain 1.09 status, USD/JPY has moved closer to 148.
• Tesla Inc (TSLA) Q4 2023 (USD): Adj. EPS 0.71 (exp. 0.74), Revenue 25.17bln (exp. 25.59bln); 2024 vehicle volume growth may be notably lower than 2023; -6% after-hours.
• Looking ahead, highlights include German Ifo, US Building Permits, Durable Goods, GDP Advance, PCE Prices Advance, Tokyo CPI, ECB, Norges Bank, CBRT & SARB Policy Announcements, ECB President Lagarde's Press Conference & Norges Bank Governor Bache's Press Conference. Supply from Italy & US, Earnings from Nokia, STMicroelectronics, LVMH, Intel, Visa & Blackstone.

US TRADE

EQUITIES

• US stocks finished mixed as momentum from the PBoC's RRR cut was derailed by a rise in yields following strong PMI data which knocked the S&P 500 and Nasdaq 100 off their fresh record levels seen earlier in the session. Furthermore, Microsoft shares marginally eased back from highs after briefly joining the USD 3tln market cap club, while a dismal 5yr auction also facilitated the mild upside in yields.
• SPX +0.08% at 4,868, NDX +0.55% at 17,499, DJIA -0.26% at 37,806, RUT -0.73% at 1,961.
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NOTABLE HEADLINES

• Fed announced the Bank Term Funding Program will cease making new loans as scheduled on March 11th and it adjusted the interest rate on the emergency loan program to prevent arbitrage. Fed said it adjusted the interest on new BTFP loans to be no lower than the interest rate on reserve balances on the day the loan was made and that the new rate on BTFP loans effectively increases the rate by nearly 50bps with the change effective immediately.
• Tesla Inc (TSLA) Q4 2023 (USD): Adj. EPS 0.71 (exp. 0.74), Revenue 25.17bln (exp. 25.59bln); 2024 vehicle volume growth may be notably lower than 2023; -6% after-hours.

APAC TRADE

EQUITIES

• APAC stocks were mostly positive but with gains capped as markets digested a slew of earnings releases and with the recent upside in global yields partially offsetting the Chinese stimulus euphoria.
• ASX 200 notched mild gains as strength in the commodity-related sectors picked up the slack in the rate-sensitive industries.
• Nikkei 225 eventually turned positive but lagged behind regional peers and briefly dipped below the 36,000 level.
• Hang Seng and Shanghai Comp were boosted with outperformance in the latter as mainland participants took their first opportunity to react to the latest support measures by China including the 50bps RRR cut which will release CNY 1tln of funds.
• US equity futures traded sideways after the higher yield environment pulled the S&P 500 and NDX off their record levels.
• European equity futures are indicative of a softer open with Euro Stoxx 50 future -0.1% after the cash market closed up 2.2% on Wednesday.

FX

• DXY was little changed throughout the session after recovering from the prior day's brief slump to below 103.00 with the rebound helped by yields, while participants brace for the slew of incoming data from the US including GDP and Jobless Claims.
• EUR/USD traded uneventfully after a failure to sustain the 1.0900 status and as the ECB's policy decision looms.
• GBP/USD lacked direction after a recent pullback but with support around the 1.2700 level and nearby 21-day MA.
• USD/JPY took a breather after clawing its way back from sub-147.00 territory and in the absence of fresh macro drivers.
• Antipodeans were rangebound amid a quiet overnight calendar and as the China euphoria somewhat waned.
• PBoC sets USD/CNY mid-point at 7.1044 vs exp. 7.1620 (prev. 7.1053).

FIXED INCOME

• 10yr UST futures found composure after yesterday's selling which was triggered by strong data and a weak 5yr auction.
• Bund futures were off worse levels but remained lacklustre after recent supply and as focus turns to the ECB meeting.
• 10yr JGB futures remained subdued in a continuation of the post-BoJ weakness and following a mostly softer 40yr auction.

COMMODITIES

• Crude futures were rangebound but held on to the prior day's gains after rising on the back of Chinese support measures, heightened Middle East tensions and bullish headline crude inventory data.
• White House is reportedly delaying the decision on an enormous natural gas export terminal and the DoE will analyse the climate impacts of one of the 17 proposed LNG export terminals, before deciding whether to approve it, according to the New York Times.
• A fire broke out at a large refinery in Tuapse, southern Russia due to apparent Ukraine drone strikes, while it was later reported that fire at the refinery had been put out, according to RIA.
• Spot gold languished around this week's lows after suffering following the strong US PMIs and ahead of key events.
• China's 2023 gold consumption rose 8.78% Y/Y to 1089.7 tonnes and China's gold output rose 0.84% Y/Y to 375.2 tonnes, according to the Gold Association.
• Copper futures mildly softened but held on to most of the spoils from the recent China stimulus-induced rally.

CRYPTO

• Bitcoin was marginally lower with trade choppy on both sides of the psychological USD 40,000 level.

NOTABLE ASIA-PAC HEADLINES

• Australian PM Albanese said every taxpayer will get a tax cut from July 1st as his government made changes to planned tax cuts including reducing benefits for the wealthy and providing low-income earners with more breaks, while Albanese commented that tax cuts have no implication on RBA's inflation forecast.

DATA RECAP

• South Korean GDP QQ (Q4 A) 0.6% vs. Exp. 0.5% (Prev. 0.6%)
• South Korean GDP YY (Q4 A) 2.2% vs. Exp. 2.1% (Prev. 1.4%)

GEOPOLITICS

MIDDLE EAST

• Israel’s Economy Minister said Iran is now a “legitimate target” for Israeli missile strikes, while he noted that Israel can afford to keep fighting and that as ‘big as the crisis is, it is also a really big opportunity’, according to The Telegraph.
• US and Iraq are reportedly close to initiating talks on the future of US military presence in Iraq, while the US Ambassador to Iraq handed the Iraqi Foreign Minister a letter related to the process of ending the US-led coalition and establishing bilateral relations. However, it was noted that the process could take months to years and a US troop withdrawal is not imminent, according to Reuters citing sources.
• US military said Houthis fired three missiles towards M/V Maersk Detroit which is a US-flagged and owned container ship transiting the Gulf of Aden. It was also reported that Yemen's Houthis said naval forces carried out an operation against a number of US military ships in the Gulf of Aden and Bab Al Mandab, while it added naval forces directly hit a US military ship.

OTHER

• Russian Foreign Minister Lavrov called for an emergency UN Security Council session regarding the recent crash of a Russian plane.
• US President Biden sent a letter to congressional leaders informing them of his intention to formally notify Congress of the sale of F-16s to Turkey as soon as Ankara completes Sweden's NATO ratification process, while he urged Congress to proceed with the F-16 sale without delay, according to Reuters.
• China's military said it organised troops to follow and monitor a US destroyer that transited through the Taiwan Strait, while it added that the US openly "hyped" up the passage, according to Reuters.
• Taiwan's President-elect Lai said he will continue to defend the cross-strait status quo of peace and stability, while he hopes the US can continue to firmly support Taiwan and hopes US Congress can continue to support Taiwan in bolstering self-defence capabilities.

UK/EU

NOTABLE HEADLINES

• Europe is set to agree on supply chain emergency powers next week with an agreement likely on a requirement for companies to prioritise production of key products during a supply chain crisis, according to a key EU lawmaker.