• APAC stocks sustained the positive momentum from Wall St where yields softened after the US data deluge.
• European equity futures indicate a higher open with Euro Stoxx 50 future +0.5% after the cash market closed up 0.7% on Thursday.
• DXY is marginally firmer vs. peers whilst the JPY marginally lags as the BoJ continues to talk dovishly.
• BoJ's Ueda said will examine whether to maintain various easing measures when the price target comes into sight.
• ECB's Villeroy said should not wait too long for cuts, Scicluna open to a cut in March.
• Looking ahead, highlights include German Wholesale Price Index, UK Retail Sales, French CPI, US PPI, UoM Sentiment, Comments from ECB’s Schnabel, Fed’s Daly, Bostic, Barr & BoE’s Pill.

US TRADE

EQUITIES

• US stocks saw broad-based gains with the advances led by small-caps amid the lower yield environment as participants digested a slew of data releases in which particularly weak retail sales were the highlight and industrial production also disappointed, while the Philly and Empire Fed surveys topped forecasts and initial jobless claims declined.
• SPX +0.58% at 5,029, NDX +0.21% at 17,845, DJIA +0.91% at 38,773, RUT +2.45% at 2,061.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Bostic (voter) said the Fed does not face an urgency to cut rates given the current economy and a strong economy argues for patience in adjusting monetary policy but added the Fed is likely soon to contemplate cutting rates. Bostic said inflation is likely to decline more slowly than markets expect and the fight is not finished on getting inflation back to 2% but also noted the Fed has made solid progress in lowering inflation and it is unlikely that January CPI signals a big change in the trend of weakening inflation. Furthermore, Bostic said if inflation retreats faster, he will change his mind on the rate outlook and currently forecasts two rate cuts this year.
• Fed's Waller (voter) said USD is likely to remain the world's reserve currency and recent events if anything, strengthen that status, while he added that several factors weigh against the yuan as an attractive asset.
• US House Republican Emmer says the chamber will not pass another temporary spending bill to avert a shutdown when the current March 1st deadline expires.

APAC TRADE

EQUITIES

• APAC stocks sustained the positive momentum from Wall St where yields softened after the US data deluge.
• ASX 200 was led higher by the mining sector but with the upside capped as large insurers faltered post-earnings.
• Nikkei 225 rallied and briefly approached within 100 points of its record high before reversing some of the gains.
• Hang Seng climbed back above the 16,000 level with notable gains in biopharmaceuticals and property with the latter underpinned after a court dismissed liquidation petitions against Chinese developer Logan Group.
• US equity futures (ES -0.1%) plateaued following the prior day's advances and as participants await PPI data.
• European equity futures indicate a higher open with Euro Stoxx 50 future +0.5% after the cash market closed up 0.7% on Thursday.

FX

• DXY nursed some of yesterday's losses after suffering from the US data fest, while Fed's Bostic suggested no urgency to cut rates given the strong economy and maintained the view for two rate cuts this year.
• EUR/USD traded rangebound with recent price action largely at the whim of the greenback.
• GBP/USD marginally retreated from the prior day's highs and reverted to a sub-1.2600 level with participants looking to UK Retail Sales for some solace after recent GDP data showed the UK economy entered a recession.
• USD/JPY edged higher after it reclaimed the 150.00 status and as BoJ Governor Ueda largely stuck to the script.
• Antipodeans were uneventful in the absence of any major catalysts or tier-1 releases.
• Norges Bank Governor Bache said they won't need more rate hikes if the economy develops as expected and they must uphold confidence in the inflation target, while she added that inflation is coming down and that Norwegian rates cannot deviate substantially from foreign rates over time.

FIXED INCOME

• 10-year UST futures marginally pulled back after the recent bull-flattening and data deluge with participants now awaiting PPI figures.
• Bund futures remained subdued near the prior day's lows after slipping beneath 134.00, while Recent mixed comments from ECB officials had little effect on price action.
• 10-year JGBs were slightly lower amid light catalysts and gains in Japanese stocks, while the enhanced liquidity auction for long- to super-long JGBs only provided brief support.

COMMODITIES

• Crude futures were rangebound and sat around the prior day's best levels after gaining on the back of recent dollar weakness and ongoing geopolitical concerns.
• US DoE announced contracts awarded for 2.95mln bbls of US-produced crude oil for the SPR.
• Spot gold traded sideways after just about reclaiming the psychological USD 2000/oz level.
• Copper futures marginally extended on yesterday's advances amid the positive risk momentum.

CRYPTO

• Bitcoin resumed its upward momentum after climbing back above the USD 52,000 level.

NOTABLE ASIA-PAC HEADLINES

• BoJ Governor Ueda said when a sustained and stable achievement of the price target comes into sight, they will examine whether to maintain various easing measures including the negative interest rate. Ueda also noted the specific means of rolling back stimulus will depend on economic conditions at the time and based on the current economic and price outlook, monetary conditions will likely remain accommodative even after ending negative rates.
• Japanese Finance Minister Suzuki said a weak yen has merits and demerits, while he is concerned about the negative aspects of a weak yen and reiterated that rapid FX moves are undesirable and is closely watching FX moves with a sense of urgency.
• RBNZ Governor Orr refrained from talking about the rate outlook and said they have more work to do to get inflation expectations anchored to 2%. Governor Orr said a flexible approach to inflation targeting with a medium-term focus remains appropriate and bringing levels of core inflation back in line with the bank's 1-3% target is an important part of bringing inflation back to the 2% midpoint, while he also noted the removal of the maximum sustainable employment objective does not mean any big changes to RBNZ's monetary policy strategy.

DATA RECAP

• Singapore Non-Oil Exports MM (Jan) 2.3% vs. Exp. 0.5% (Prev. -2.8%)
• Singapore Non-Oil Exports YY (Jan) 16.8% vs. Exp. 5.4% (Prev. -1.5%)

GEOPOLITICS

MIDDLE EAST

• Hamas rejected an Israeli offer for a 3-month ceasefire and the exit of its leaders from Gaza, while it insisted on releasing all Palestinian prisoners and keeping the movement in Gaza, according to Al Arabiya sources.
• US President Biden raised the situation in Rafah during a call with Israeli PM Netanyahu and reiterated his view that a military operation should not proceed without a credible and executable plan for ensuring the safety of and support for civilians in Rafah. Biden also reaffirmed his commitment to working tirelessly to support the release of all hostages as soon as possible, according to Reuters.
• US State Department said the US is working with Qatar, Israel and Egypt on the hostage talks to find an agreement and there are some very hard issues to be resolved, while it was also reported that US Secretary of State Blinken said he believes an Israel-Hamas hostage deal is possible.
• US VP Harris is to meet Israeli President Herzog and will meet Iraq's PM Al-Sudani at the Munich Security Conference today, while Secretary of State Blinken is also to meet with Chinese Foreign Minister Wang at the Munich Security Conference.
• Hezbollah fired "dozens of rockets" at Israel's Kiryat Shmona in a "preliminary response" to the killing of 10 civilians in south Lebanon.
• US conducted a cyberattack on a suspected Iranian spy ship, according to NBC.

OTHER

• US House Speaker Johnson said they have to address reports of the Russian threat seriously, while US House Committee Chair Turner said he has great faith in what the Biden administration is doing to deal with this matter, according to Reuters.
• Japanese Chief Cabinet Secretary Hayashi said they are aware of comments made by North Korean leader Kim's sister but added that they cannot accept North Korea's claim that abduction issues were solved, while there is no change to our position to resolve various issues with North Korea comprehensively.
• Venezuelan Foreign Minister Gil requested local UN staff to leave the nation in 72 hours and will suspend local high commission UN activities.

EU/UK

NOTABLE HEADLINES

• UK opposition Labour Party won the by-elections in Wellingborough and Kingswood which were both previously held by the Tories, according to The Times.
• UK Chancellor Hunt has dropped plans for a 2p reduction in income tax at next month's budget, according to The Telegraph.
• ECB's Scicluna said he is open to a rate cut in March as inflation fades and urged caution on dismissing the market's views, while he added the "choker" on the economy should be loosened and that risks are everywhere, but inflation is easing.
• ECB's Villeroy said the principle of a rate cut this year seems to be a given and there is still a question of a precise calendar for a rate cut, while he added there are several reasons as to why the ECB should not wait for too long before making the first rate cut, according to an interview with L'Echo cited by Reuters.