• European equities are firmer taking impetus from gains on Wall Street; US equity futures are in the green, outperformance in the NQ post-earnings from Amazon (+6%) and Meta (+16.7%).
• Dollar is around flat awaiting impetus from US NFP; Aussie outperforms recouping the prior day’s downside.
• Bonds are softer giving back recent advances as attention turns to key US data
• Crude is firmer and finds some reprieve after hefty losses in the prior session; Gold stands pat alongside a flat Dollar
• Looking ahead, US NFP, Durable Goods, UoM, Earnings from Regeneron, Gilead, Exxon, Chevron, Aon & Abbvie.

EUROPEAN TRADE

EQUITIES

• European bourses, Stoxx600 (+0.5%), are on a firmer footing, taking impetus from gains in Wall Street and further optimism also stemming from blockbuster earnings from Amazon (+6% pre-market) and Meta (+16.7% pre-market).
• European sectors are mostly firmer; Autos takes the top spot benefitting from outperformance within the sector in APAC trade and after a positive update from Mercedes-Benz. Energy is the major laggard, dragged down by weaker crude prices following mixed reporting on a ceasefire in Gaza.
• US equity futures (ES +0.5%, NQ +1.1%, RTY U/C) are firmer, with clear outperformance in the NQ, being led higher by significant strength in Amazon (+6.7%) and Meta (+16.7%) post-earnings; though, Apple is softer by over 2%.
• Click here and here for the sessions European pre-market equity newsflow, including earnings from Danske Bank, Caixabank & more.
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FX

• DXY has pivoted around the 103.00 mark compared to levels closer to 103.50 in recent sessions as yield-driven selling in USD saw the index hit a trough of 102.91. In what has been a contained few weeks of trade for the USD, a soft NFP could see a test of the Jan 24th low at 102.77.
• EUR remains supported by recent USD selling but unable to muster a test of 1.09; last breached on Jan 25th at 1.0901.
• JPY is the only major currency softer vs. the USD as the JPY's recent tepid recovery vs. the dollar pauses for breath. Ultimately, the pair remains at the whim of relative Fed/BoJ expectations. Currently sits at the 21DMA and within yesterday's 145.89-147.11 range.
• AUD attempting to recoup recent lost ground vs. the USD which saw the pair hit a trough of 0.6508 yesterday.
• PBoC set USD/CNY mid-point at 7.1006 vs exp. 7.1655 (prev. 7.1049).
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FIXED INCOME

• USTs are softer and pivoting Wednesday's 112-20+ peak ahead of NFP, which is expected to print at 180k (prev. 216k).
• Bunds are weaker by around 60 ticks but still over 100 ticks from the week's 134.37 trough; the German 10yr yield has recovered back to 2.18% but is still set to close the week out lower.
• Gilts are the relative underperformer but similarly well within WTD 98.56-100.62 parameters with drivers thin post-BoE though we await commentary from Chief Economist Pill.
• Italian Treasury says foreign investors bought 70% of new 15yr BTP syndicated bond
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COMMODITIES

• Choppy/contained across the crude complex this morning ahead of US jobs data, and after the contracts settled lower by USD 2.03/bbl for WTI and USD 1.85/bbl for Brent after mixed reporting regarding a Gaza ceasefire yesterday; currently Brent holds below the USD 79.50/bbl.
• Precious metals are trading horizontal in the run-up to the US jobs report in an otherwise quiet European morning; whilst base metals are mixed with early China-induced weakness trimmed as the USD edges lower; XAU holds above USD 2050/oz and within a tight range.
• Iraqi oil exports averaged 3.3mln BPD in Jan (prev. 3.5mln in Dec); Average price USD 77.536/bbl (prev. USD 76.96/bbl in Dec)
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NOTABLE EUROPEAN HEADLINES

• Citi/YouGov UK Inflation Expectations: 12-month 3.9% (prev. 3.5%), 5-10yrs 3.6% (prev. 3.4%). Short-run expectations increased amid an increase in shipping disruption.
• Riksbank comment on the Swedish National Audit Office's report: Riksbank recognises that circumstances may arise in the future, in which purchases of securities may be an appropriate way to influence inflation. Further analysis is required.
• German Engineering Orders in December -6% Y/Y (Domestic -13%, Foreign -3%), according to VDMA

DATA RECAP

• French Industrial Output MM (Dec) 1.1% vs. Exp. 0.2% (Prev. 0.5%)
• French Budget Balance (Dec) -173.26B (Prev. -197.97B)

NOTABLE US HEADLINES

• Fed Chair Powell will be interviewed on 60 Minutes this Sunday which will be aired at 19:00EST/00:00GMT.

EARNINGS

• Amazon.com Inc (AMZN) - Q4 2023 (USD): EPS 1.00 (exp. 0.80), Revenue 169.96bln (exp. 166.21bln).SALES BREAKDOWN:Online stores 70.54bln (exp. 68.91bln). Physical Stores 5.15bln (exp. 5.23bln). Third-Party Seller Services 43.56bln (exp. 41.96bln). AWS 24.20bln (exp. 24.22bln). GEOGRAPHICAL REGIONS: North America 105.51bln (exp. 102.88bln). International 40.24bln (exp. 38.96bln). KEY METRICS: Third-party seller services net sales excluding F/X +19% (exp. +15.9%). AWS net sales excluding F/X +13% (exp. +11.8%). Operating income 13.21bln (exp. 10.49bln). Operating margin 7.8% (exp. 6.17%). North America operating margin +6.1% (exp. +4.12%). International operating margin -1% (exp. -1.27%). Fulfillment expense 26.10bln (exp. 25.2bln). GUIDANCE: Q1 net sales view 138.0-143.5bln (exp. 142.01bln). Q1 operating income view 8-12bln (exp. 9.1bln). CFO said improved delivery speeds have led to increased purchase frequency by customers across major geographies, and there are no immediate plans for dividend. (Amazon/Newswires) Shares rose 7.1% after-market. Index weightings: SPX (3.5%), NDX (4.9%). Shares up 6.1% pre-market
• Meta Platforms Inc (META) - Q4 2023 (USD): EPS 5.33 (exp. 4.96), Revenue 40.11bln (exp. 39.17bln); authorised 50bln increase to share buyback programme and declared cash quarterly dividend of 0.50/shr. KEY METRICS: Advertising revenue 38.71bln (exp. 38.12bln). Facebook DAUs 2.11bln (exp. 2.07bln). Facebook MAUs 3.07bbln (exp. 3.06bln). Ad impressions +21% (exp. +24.6%). Average Family service users per day 3.19bln (exp. 3.11bln). Average Family service users per month 3.98bln (exp. 3.93bln). GUIDANCE: Q1 revenue view 34.5-37bln (exp. 33.34bln). Meta (META) noted the FTC is seeking to substantially modify consent order on Meta and if contesting is unsuccessful, this could impose additional restrictions on its ability to operate and would adversely impact its business. CEO said the Co. is getting ready to roll out AI services more widely in coming months, adds Threads now has more people using it daily than initial launch and Metaverse focus this year is going to be growing mobile version of Horizon. CFO said Co. will discontinue reporting of Facebook monthly and daily active users, Co. expects to maintain an active share repurchase program. (Meta/Newswires) Shares rose 15.2% after-market. Index weightings: SPX (2.2%), NDX (4.2%). Shares up 16.8% pre-market
• Apple Inc (AAPL) - Q1 2024 (USD): EPS 2.18 (exp. 2.10), Revenue 119.58bln (exp. 117.91bln). Greater China revenue 20.82bln (exp. 23.5bln). REVENUE BREAKDOWN: Products 96.46bln (exp. 95.14bln).iPhone 69.70bln (exp. 68.55bln). Mac 7.78bln (exp. 7.9bln). iPad 7.02bln (exp. 7.06bln). Wearables, home and accessories 11.95bln (exp. 12.02bln). Service 23.12bln (exp. 23.37bln). KEY METRICS: Total operating expenses 14.48bln (exp. 14.62bln). Gross margin 54.86bln (exp. 53.56bln). Cash and cash equivalents 40.76bln (exp. 38.81bln). Apple expects March quarter total revenue and iPhone revenue to be similar to the previous year after accounting for inventory replenishment. Expects gross margins between 46%-47% for fiscal Q2. Expects operating expenses of USD 14.3bln-14.5bln in fiscal Q2. Expects services business to show double-digit growth similar to the December quarter in fiscal Q2. CEO Cook said the Co. will make announcements this year on new AI features. CEO Cook added that FX was a headwind for China sales, and the decline in China sales was in part on a stronger USD. (Apple/Newswires) Shares fell 2.9% after-market. Index weightings: SPX (6.6%), NDX (8.7%), DJIA (3.2%) Shares down 2.5% pre-market
• Microchip Technology Inc (MCHP) - Q3 2024 (USD): Adj. EPS 1.08 (exp. 1.04), Revenue 1.77bln (exp. 1.77bln). GUIDANCE: Q4 adj. EPS view 0.46-0.68 (exp. 0.91). Q4 revenue view 1.225-1.425bln (exp. 1.66bln). COMMENTARY: Taking steps to limit discretionary spending and tightly manage inventory levels during downcycle. Cautious about demand in near term given weak macro environment and customers' ongoing actions to reduce inventory. (Newswires) Shares down 3.1% pre-market
• TomTom (TOM2 NA) - Q4 (EUR): Revenue 143mln (exp. 142mln), Net -11.6mln (exp. -23mln), EBIT -10.4mln (exp. -29mln). FY24 Outlook: Revenue 570-610mln (exp. 600mln). Shares up 9.2% in European trade / Garmin shares up 0.7% in pre-market trade.

GEOPOLITICS

• Hamas said they are still in the stage of consultation between internal and foreign leaders on the exchange deal, while it received the Paris truce proposal but has not given a response to any parties and it is still being studied. Furthermore, it cannot say the current stage of negotiations is zero, but also cannot say they have reached an agreement.
• An Iranian revolutionary guard advisor killed in Israeli strike on Damascus, Syria, via semi-official Iranian News site..
• Iraq's pro-Iran Al-Nujaba movement vows to keep up attacks on US troops, according to AFP
• North Korea fired several cruise missiles off its west coast, according to South Korea.

CRYPTO

• Bitcoin (-0.2%) meanders around the USD 43k mark and Ethereum (+0.2%) is modestly firmer on the session.

APAC TRADE

• APAC stocks mostly took impetus from the gains on Wall St where stocks were underpinned amid a softer yield environment and with US equity futures boosted following the big tech earnings.
• ASX 200 printed fresh all-time highs with real estate and tech front running the gains amid softer yields.
• Nikkei 225 gained with headlines dominated by another busy day of earnings results, while Aozora Bank suffered another double-digit drop after it recently flagged losses linked to US commercial property loans.
• Hang Seng and Shanghai Comp were both initially boosted with outperformance in automakers after their January delivery updates, while tech names were supported after China's NPPA approved 32 imported online games. However, stocks then gradually reversed course after the PBoC continued to drain liquidity despite next week's Lunar New Year holiday.
• Later in the session Chinese stocks rebounded shortly after the Shanghai Composite fell to fresh multi-year lows under 2,700; with some highlighting increased capital flows from Hong Kong via Stock Connect. Details here.

NOTABLE HEADLINES

• China National Press and Publication Administration approved 32 imported online games, according to Reuters.
• China urges state Cos to step up equity investments in new equity firms, via Bloomberg
• IMF says China growth is projected to slow to 4.6% in 2024 amid the ongoing weakness in the property sector and subdued external demand. Inflation expected to increase gradually to 1.3% in 2024.

DATA RECAP

• South Korean CPI MM (Jan) 0.4% vs. Exp. 0.4% (Prev. 0.0%); CPI YY (Jan) 2.8% vs. Exp. 2.9% (Prev. 3.2%)
• Australian Home Loans MM (Dec) -4.1% vs Exp. 1.0% (Prev. 1.0%); PPI QQ (Q4) 0.9% (Prev. 1.8%); PPI YY (Q4) 4.1% (Prev. 3.8%)