• APAC stocks traded mixed with headwinds following the tech-led declines stateside ahead of Nvidia earnings.
• European equity futures indicate a contained open with Euro Stoxx 50 future +0.1% after the cash market closed down 0.1% on Tuesday.
• DXY lingers around the 104 mark, EUR/USD maintains 1.08 status and antipodeans outperform again.
• Bund futures remain subdued and Crude futures moved off the prior day's lows.
• Looking ahead, highlights include EZ Consumer Confidence, NZ Trade, Australian PMI, FOMC Minutes, Comments from Fed’s Bostic, Bowman & BoE’s Dhingra, Supply from UK, Germany & US.
• Earnings from Rio Tinto, Glencore, HSBC, BAE Systems, Fresenius, NVIDIA, Analog Devices & Synopsys.

US TRADE

EQUITIES

• US stocks were lower on return from the holiday weekend with the declines led by tech as Nvidia was pressured ahead of its earnings and AI bellwether Super Micro Computer (SMCI) also extended Friday's sharp sell-off before trimming the losses heading into the close, while the latest US data releases were softer and participants now await the FOMC Minutes on Wednesday.
• SPX -0.60% at 4,975, NDX -0.79% at 17,546, DJIA -0.17% at 38,563, RUT -1.41% at 2,004.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US House Republicans are reportedly expecting a government shutdown behind closed doors, according to Axios.

APAC TRADE

EQUITIES

• APAC stocks traded mixed with headwinds following the tech-led declines stateside ahead of Nvidia earnings and FOMC Minutes.
• ASX 200 was dragged lower by consumer stocks and miners in another busy day of earnings.
• Nikkei 225 continued its gradual pullback from near-record levels but remained above the 38,000 level.
• Hang Seng and Shanghai Comp. shrugged off early weakness with outperformance in Hong Kong driven by strength in property and tech, while the mainland also recovered its initial losses and more following recent stability efforts by Chinese authorities.
• US equity futures (ES -0.1%) were constrained after recent declines and as participants await upcoming key events.
• European equity futures indicate a contained open with Euro Stoxx 50 future +0.1% after the cash market closed down 0.1% on Tuesday.

FX

• DXY was stuck around the 104.00 level after yesterday's pressure and as FOMC Minutes loom.
• EUR/USD eked mild gains after near-term support held around the 50 DMA of 1.0806.
• GBP/USD traded calmly after yesterday's whipsawing and BOE commentary.
• USD/JPY continued oscillating around the 150.00 level after mixed Japanese trade data.
• Antipodeans were underpinned amid mild strength in the CNH and as Chinese stocks recovered their opening losses, while the data showed Australia's Wage Price Index either matched or topped forecasts.
• PBoC set USD/CNY mid-point at 7.1030 vs exp. 7.1877 (prev. 7.1068).

FIXED INCOME

• 10-year UST futures lacked direction ahead of a 20-year auction and release of the FOMC Minutes.
• Bund futures remained subdued after the recent pullback and retested the 133.00 level to the downside.
• 10-year JGBs were ultimately flat after mixed trade data and despite the BoJ's presence in the market.

COMMODITIES

• Crude futures moved off the prior day's lows although price action was limited amid the mixed risk sentiment and with the latest weekly inventory data delayed following the recent US holiday.
• Russian Foreign Minister Lavrov said Russia and Venezuela are to broaden oil production cooperation.
• Spot gold edged marginal gains but with upside capped by an uneventful dollar ahead of the FOMC Minutes.
• Copper futures took a breather following recent advances and despite the turnaround in Chinese risk sentiment.
• World refined copper markets were in a 20k metric tonnes surplus in December 2023 (vs. 123k deficit in November), according to ICSG.

CRYPTO

• Bitcoin trickled lower throughout the session and eventually dipped beneath the USD 52,000 level.

NOTABLE ASIA-PAC HEADLINES

• China's housing authority said a total of CNY 123.6bln of development loans have been approved and that CNY 29.4bln have been issued under China's "whitelist" mechanism which was launched on January 26th and is aimed at injecting liquidity to the property sector.
• Chinese Foreign Minister Wang met with his French counterpart and said China is ready to strengthen strategic communication with France and forge more consensus, strengthen solidarity and cooperation, as well respond more effectively to global challenges. Wang also stated the two sides had in-depth communication on issues related to peace and security, while they agreed that multi-polarisation is indispensable for peace and stability, and will continue to strengthen strategic coordination. Furthermore, Wang said in a meeting with French President Macron that he hopes France will continue to play a constructive role in the healthy and stable development of Sino-European relations, while China hopes France will also create a fair and just business environment for Chinese enterprises there and provide positive and stable long-term expectations.

DATA RECAP

• Japanese Trade Balance Total (JPY)(Jan) -1758.3B vs. Exp. -1925.9B (Prev. 68.9B)
• Japanese Exports YY (Jan) 11.9% vs. Exp. 9.5% (Prev. 9.7%)
• Japanese Imports YY (Jan) -9.6% vs. Exp. -8.4% (Prev. -6.9%)
• Australian Wage Price Index QQ (Q4) 0.9% vs. Exp. 0.9% (Prev. 1.3%)
• Australian Wage Price Index YY (Q4) 4.2% vs. Exp. 4.1% (Prev. 4.0%, Rev. 4.1%)

GEOPOLITICS

MIDDLE EAST

• Israeli PM Netanyahu said Israel will not yield to any internal or external pressure to end the war in Gaza and wants to release more hostages, but “not at any cost”, according to Al Arabiya.
• Hamas said US President Biden and his administration bear direct responsibility for obstructing a decision to stop the aggression, according to Al Jazeera.
• China's envoy to the UN said the objection to a ceasefire in Gaza equals a license to kill and is nothing different from giving the green light to a continued slaughter following the US veto of the Security Council draft resolution on a ceasefire in Gaza, while China expressed its strong disappointment at and dissatisfaction with the US veto, according to Reuters.
• Yemen's Houthis said they used drones to target a number of US warships in the Red Sea as well as sites in Eilat in southern Israel, while they targeted Israeli ship 'MSC Silver' in the Gulf of Aden with a number of missiles.
• US Central Command said Houthis fired two anti-ship ballistic missiles at a Greek-flagged and US-owned bulk carrier bound for Yemen's Port of Aden, while one of the missiles detonated near the ship and caused minor damage
• UKMTO received a report of heightened uncrewed aerial system activity 40NM west of Yemen's Hodeidah.
• US confirmed a reaper spy drone was shot down by Houthis over the Red Sea.

OTHER

• Ukraine’s Defence Minister Umerov said he and US Defence Secretary Austin, alongside new Ukrainian forces commander Syrskyi discussed front line and ammunition supplies.
• Ukrainian military intelligence chief Budanov said Russia will struggle to keep up the fight and Russians don't have the strength to achieve the goal of seizing two eastern regions this year, according to WSJ.
• Lawmakers in Germany’s ruling coalition are set to vote this week on a motion that requests for Ukraine "the delivery of additionally necessary long-range weapon systems" that could strike Russia, including Taurus cruise missiles, according to FT.
• US National Security Adviser Sullivan said new sanctions on Russia will cover a range of elements including defence industrial base and sources of revenue for the economy.
• US told allies Russia may put a nuclear weapon in space in 2024, according to Bloomberg sources.
• Taiwan's Defence Ministry denied increasing military deployments on Taiwan's offshore islands and said there is nothing unusual regarding the military situation around Taiwan, but stated that it is making preparations with the coast guard for possible new scenarios near offshore islands, according to Reuters.

EU/UK

NOTABLE HEADLINES

• EU signalled a potential end to the rule of law dispute with Poland, according to FT citing a plan which sets out several bills that Tusk's coalition will seek to pass in order to reform the judiciary and reverse the overhauls from the prior government. Furthermore, EU officials believe the sanctions procedure could be lifted before summer if reforms are adopted although Poland's President Duda would still need to approve the bills.
• UK Chancellor Hunt will have GBP 23bln of headroom for pre-election tax reductions in next month's budget, according to the Resolution Foundation, via Bloomberg.