• APAC stocks were mostly positive amid tailwinds from the tech uplift in US futures following NVIDIA earnings.
• NVIDIA surged by over 9% after-hours after beating on top and bottom lines and offering strong sales guidance.
• FOMC minutes proved to be a non-event and echoed the broader tone of Fed speak seen in the wake of the January meeting.
• European equity futures indicate a higher open with Euro Stoxx 50 future +0.8% after the cash market closed up 0.3% on Wednesday.
• DXY is back below the 104 level, NZD continues to climb and USD/JPY holds onto 150 status.
• Looking ahead, highlights include EZ, UK & US PMIs, EZ CPI (Final), US IJC, ECB Minutes, CBRT Policy Announcement, Speeches from Fed’s Jefferson, Bowman, Harker, Kashkari & Cook, Supply from US.
• Earnings from Lloyds, Anglo American, WPP, Hays, Hikma, Rolls Royce, Axa, Engie, Heidelberg Materials, Mercedes Benz, Hochtief, Nestle, Zurich Insurance, BE Semiconductor, Telefonica, Iberdrola, Repsol, Pioneer Natural Resources, Moderna, Intuit & Booking.

US TRADE

EQUITIES

• US stocks were choppy with Nvidia (NVDA) pressured again as it headed into its much-anticipated earnings release after hours, while Treasuries were sold amid another slew of corporate debt and after an awful 20yr auction which tailed by a record 3.3bps. Attention was also on the FOMC minutes although this proved to be a non-event and echoed the broader tone of Fed speak seen in the wake of the January meeting with officials cautioning about the risks of cutting too soon.
• SPX +0.13% at 4,982, NDX -0.38% at 17,479, DJI +0.13% at 38,612, RUT -0.47% 1,995.
• Click here for a detailed summary.

FOMC MINUTES

• FOMC Minutes stated most policymakers noted risks of easing too quickly and emphasised the importance of incoming data in judging if inflation is moving sustainably to 2%, while officials judged the policy rate is likely at its peak for this cycle. FOMC minutes also stated that a couple of policymakers pointed to downside risks from maintaining an overly restrictive stance for too long and officials highlighted uncertainty around how long a restrictive policy stance would be needed. Furthermore, several policymakers emphasized the importance of communicating clearly about the data-dependent approach and it also stated that while risks to achieving dual-mandate goals were in better balance, officials noted they remained 'highly attentive' to inflation risks.

NOTABLE HEADLINES

• Fed's Bowman (voter) said the time for lower rates is "certainly not now" and the housing market isn't influencing the rate cut decision. Bowman also noted that CRE stress is dependent on office space location and new US capital rule plans (Basel III) would hurt lending.
• US Commerce Secretary Raimondo said there will need to be continued chip investment.
• NVIDIA Corp (NVDA) Q4 2024 (USD): Adj. EPS 5.16 (exp. 4.64), Revenue 22.1bln (exp. 20.62bln), Q1 2025 revenue view 24bln plus or minus 2% (exp. 21.9bln). Co. shares were higher by 9.1% after-hours.

APAC TRADE

EQUITIES

• APAC stocks were mostly positive amid tailwinds from the tech uplift in US futures following NVIDIA earnings.
• ASX 200 lagged as participants continued to digest an influx of earnings and after Australia's Flash Manufacturing PMI returned to contraction territory.
• Nikkei 225 outperformed amid tech strength and eventually printed fresh intraday record highs above 39,000.
• KOSPI was marginally higher after the BoK kept rates unchanged and signalled an unlikelihood of a cut soon.
• Hang Seng and Shanghai Comp. were both firmer albeit with price action in Hong Kong choppy amid US-China chip-related frictions, while the mainland remained afloat after the latest stability efforts by China.
• US equity futures (ES +0.7%, NQ +1.5%) strengthened after NVIDIA's earnings topped forecasts with revenue at a record high and it also provided strong guidance.
• European equity futures indicate a higher open with Euro Stoxx 50 future +0.8% after the cash market closed up 0.3% on Wednesday.

FX

• DXY was slightly softer and back below the 104.00 level. FOMC minutes did little to alter the narrative and repeated recent Fed communications in which most policymakers cautioned about risks of easing too quickly and stressed the importance of being data-dependent, while the meeting also took place prior to the hot January jobs and inflation reports.
• EUR/USD eked slight gains after the recent rebound from beneath 1.0800, while attention turns to PMIs.
• GBP/USD traded steadily after finding support yesterday near the 1.2600 level and with UK PMIs scheduled later.
• USD/JPY initially extended on the prior day's highs after climbing on the back of recent upside in US yields but later faded its gains.
• Antipodeans were choppy and only mildly benefitted from the positive risk sentiment, while participants also digested mixed Australian PMI data and softer New Zealand Trade figures.
• PBoC set USD/CNY mid-point at 7.1018 vs exp. 7.1854 (prev. 7.1030).

FIXED INCOME

• 10-year UST futures saw mild reprieve from yesterday's selling pressure which was spurred by corporate supply and a dismal 20-year auction that resulted in the largest tail on record for the 20yr since its reintroduction.
• Bund futures remained subdued after slipping to fresh YTD lows firmly beneath the 133.00 level.
• 10-year JGBs were indecisive in a continuation of recent whipsawing, while support from improved demand at the enhanced liquidity auction for longer-dated JGBs was later unwound.

COMMODITIES

• Crude futures were steady after the prior day's recovery and shrugged off the larger-than-expected build-in headline crude stockpiles seen in the private sector inventory data.
• US Energy Inventory Data (bbls): Crude +7.2mln (exp. +3.9mln), Gasoline +0.4mln (exp. -2.1mln), Distillate -2.9mln (exp. -1.7mln), Cushing +0.7mln.
• Guyana’s natural resources minister said won’t approve drilling near Venezuela until the court ruling, while it will wait for the international court decision and cannot explore the disputed area for now.
• Spot gold was rangebound amid a steady dollar and a lack of fireworks from the FOMC minutes.
• Copper futures were flat amid the momentum in stocks and Fed cautioning on cutting rates too soon.

CRYPTO

• Bitcoin remained subdued overnight and briefly dipped below the USD 51,500 level.

NOTABLE ASIA-PAC HEADLINES

• China's Foreign Minister Wang said he feels Europe's rational perception of China is increasing, believing China's development is in line with the logic of history and Europe should not be afraid of it or reject it. Wang added that the European side is positive about strengthening China-EU exchanges at all levels and is very enthusiastic about deepening practical cooperation, while he would like to stress to the European side that 'de-risking' will not eliminate cooperation and 'reducing dependence' will not reduce mutual trust.
• Chinese small banks reportedly cut deposit rates to ease margin pressure, according to China Securities Journal.
• BoK maintained its base rate at 3.5%, as expected, with the decision made unanimously. BoK said it will maintain a restrictive policy stance for a sufficiently long period and will monitor the inflation slowdown, financial stability and economic growth risks, household debt growth, monetary policy operations in major countries and developments in geopolitical risks. BoK also stated that consumption and construction investment to recover at a slower pace, as well as noted that uncertainties to the growth outlook are high. Furthermore, Governor Rhee said five board members said the current interest rate should be maintained at least for the next three months and one board member said the door for a rate cut should be opened for the next three months, while Rhee added that he still doesn't see much chances of a rate cut in H1 and that most members' view it is too early to discuss rate cuts.

DATA RECAP

• Japanese Manufacturing PMI Flash SA (Feb) 47.2 (Prev. 48.0)
• Japanese Services PMI Flash SA (Feb) 52.5 (Prev. 53.1)
• Australian Manufacturing PMI Flash (Feb) 47.7 (Prev. 50.1)
• Australian Services PMI Flash (Feb) 52.8 (Prev. 49.1)
• New Zealand Trade Balance (NZD)(Jan) -976.0M (Prev. -323.0M, Rev. -368M)
• New Zealand Exports (NZD)(Jan) 4.93B (Prev. 5.94B, Rev. 5.85B)
• New Zealand Imports (NZD)(Jan) 5.91B (Prev. 6.26B, Rev. 6.22B)

GEOPOLITICS

MIDDLE EAST

• Israeli war cabinet member Gantz said there are initial signs indicating a possible new hostage deal and without a new hostage deal, they will continue operating also during Ramadan.
• Israeli military sounded sirens in the Red Sea port city of Eilat, warning of possible income aerial threats. It was separately reported that a possible medium-range ballistic missile launched by Iranian-backed Houthis in Yemen was intercepted by Israel's Arrow air defence system over the Red Sea near Eilat.
• US State Department Spokesperson said the US and its partners will continue to take appropriate action to protect Red Sea shipping from Houthi attacks. In relevant news, US Central Command said its forces conducted four self-defence strikes against seven mobile Houthi anti-ship cruise missiles and one mobile anti-ship ballistic missile launcher, while it also shot down a one-way attack unmanned aircraft system in self-defence.

OTHER

• US, Japan and South Korea held a trilateral export control meeting at the US Embassy in Tokyo and agreed to cooperate further on Russia-bound export control and outreach to Southeast Asia, as well as critical tech export control, according to Japan's Trade Ministry.
• US GOP Rep. Gallagher said during a delegation visit to Taipei that they are there to show bipartisan support for Taiwan and need to be more vigilant than ever to pass on the gift of freedom. Gallagher also stated that the message they want to send is that if China attempts an invasion, that effort would fail, while he added that the US stands with Taiwan, according to Reuters.
• Taiwan's President Tsai thanked the US for continuing to help Taiwan strengthen its defences and said they will continue to engage with the world, as well as hope to see even more Taiwan-US exchanges this year. It was also reported that Taiwan's President-elect Lai said they are facing great pressure from China and will continue to enhance defence capabilities, according to Reuters.
• China’s coast guard said it drove away a Philippine Fisheries and Aquatic Resources Bureau vessel that 'illegally intruded' into the waters adjacent to Scarborough Shoal, according to state media.

EU/UK

NOTABLE HEADLINES

• EU is reportedly poised to release EUR 6.3bln in post-pandemic aid to Poland as early as next week in a major vote of confidence in the new government’s ability to mend ties with Brussels, according to Bloomberg.
• UK Chancellor Hunt is reportedly working on plans for a 99% mortgage scheme, via FT citing officials.