Newsquawk

Europe Market Open: BoJ decision seen to be dependent on wage numbers; APAC mixed

14 Mar 2024, 06:35 by Newsquawk Desk

APAC stocks were mixed after the indecisive performance stateside amid light catalysts and tech weakness.
European equity futures indicate a flat open with the Euro Stoxx 50 future unchanged after the cash market closed up 0.4% on Wednesday.
BoJ decision is seen coming down to the results of Japan's annual wage negotiations, according to Nikkei.
DXY is steady below the 103 mark with other majors contained, USD/JPY eyes a 148 handle.
Looking ahead, highlights include US IJC, PPI, Retail Sales, NZ Manufacturing PMI, IEA OMR, Comments from ECB’s Elderson, Schnabel, Knot, de Guindos & Japan's Top Currency Diplomat Kanda, Supply from Japan & US.

US stocks traded mixed with price action subdued in a quiet US session amid a lack of major catalysts and with no US data to shape the narrative ahead of Thursday's retail sales and PPI figures. The Nasdaq was dragged lower owing to underperformance in tech and notable losses in Tesla following a bearish Wells Fargo note, while the energy sector was underpinned as oil prices rallied.
SPX -0.19% at 5,165, NDX -0.83% at 18,068, DJI +0.10% at 39,043, RUT +0.30% at 2,072.
Click here for a detailed summary.

NOTABLE HEADLINES

US President Biden commented via X that he is proposing tax cuts to provide USD 400/month for the next two years to those looking to buy their first home or trade up for a little more space.
US Treasury Secretary Yellen said it seems unlikely that interest rates will return to levels as low as before COVID and noted that interest rate assumptions in US President Biden's budget plans were reasonable and consistent with a broad range of forecasts, according to Reuters.

APAC stocks were mixed after the indecisive performance stateside amid light catalysts and tech weakness, with participants lacking conviction ahead of next week's central bank bonanza.
ASX 200 was subdued as losses in financials and tech overshadowed the gains in the commodity-related sectors.
Nikkei 225 traded indecisively after a slew of BoJ-related source reports suggesting a policy shift next week.
Hang Seng and Shanghai Comp. were somewhat varied with the Hong Kong benchmark pressured amid tech-related headwinds after the US House approved the bill which threatens to ban TikTok, while the mainland was indecisive with downside initially cushioned after China issued plans to promote trading in consumer goods and equipment upgrades.
US equity futures (ES +0.1%) eked slight gains in otherwise quiet trade ahead of US Retail Sales and PPI data.
European equity futures indicate a flat open with the Euro Stoxx 50 future unchanged after the cash market closed up 0.4% on Wednesday.

DXY was rangebound beneath the 103.00 level amid little data or catalysts to drive price action and with participants looking ahead to US Retail Sales and PPI data due later today.
EUR/USD stalled near 1.0950 ahead of ECB speakers including Elderson, Schnabel, Knot & de Guindos.
GBP/USD lacked direction and trickled beneath 1.2800 after recent indecision and mostly in-line data.
USD/JPY edged towards the 148.00 handle in a continuation of the recent bounce from support at 147.50.
Antipodeans were choppy amid the mixed risk appetite and absence of any key pertinent data releases.

10-year UST futures extended on losses after a recent slide beneath 111.00 despite a solid 30yr auction.
Bund futures remained pressured after retreating below 133.00 which has since acted as a resistance level.
10-year JGB futures declined after the slew of recent source reports that suggested strong wage signals raise the likelihood for the BoJ to begin policy normalisation next week, while weaker 20yr JGB auction results also provided a brief headwind.

Crude futures kept afloat with WTI nearing the USD 80/bbl level after yesterday's rally.
Spot gold was contained as price action remained largely at the whim of movements in the dollar.
Copper futures slightly pulled back after surging on reports of output cuts by China's large copper smelters.

Bitcoin traded flat and took a breather after yesterday's climb to above the USD 73,000 level.

NOTABLE ASIA-PAC HEADLINES

BoJ will discuss whether to end its negative interest rate policy as pay hikes by major companies bring the central bank's 2% price stability target within reach. Furthermore, with more BoJ policymakers embracing the idea, the decision is seen coming down to the results of Japan's annual wage negotiations, to be published by top labour confederation Rengo on Friday, according to Nikkei.
Japanese Federation of Textile, Chemical, Commerce, Food and General Services Workers' Unions which is the largest industrial union and known as UA Zensen stated that the average pay increase offered by 231 firms reached the biggest on record since 2013 compared with the same period last year.
Taiwan Central Bank Governor said they are concerned potential electricity price hikes will result in a chain reaction effect on inflation expectations and they will be very prudent about discussions on interest rates this time, while he added that they will not likely cut interest rates before June, according to Reuters.

MIDDLE EAST

US Secretary of State Blinken held a video call with officials from Cyprus, Britain, UAE, Qatar, EU and the UN to discuss getting a new maritime corridor for delivering humanitarian aid into Gaza up and running, according to Reuters.
US is expected to impose new sanctions on two illegal outposts in the occupied West Bank that were used as a base for attacks by extremist Israeli settlers against Palestinian civilians, according to three US officials cited by Axios.
US reportedly held secret talks with Iran over the Red Sea attacks with indirect negotiations in Oman aimed to end strikes against shipping by Tehran-backed Houthis, according to FT.
US CENTCOM said Iranian-backed Houthis fired one anti-ship ballistic missile in the Gulf of Aden although the missile did not impact any vessels and there was no damage reported, while its forces successfully engaged and destroyed four unmanned aerial systems and one surface-to-air missile in Houthi-controlled areas of Yemen.

OTHER

Taiwan and China authorities both dispatched teams to join a rescue mission after a Chinese fishing boat capsized near Taiwan-controlled Kinmen Islands on Thursday morning, according to Taiwanese press.
Philippines President Marcos and US Secretary of State Blinken to meet on March 19th to discuss cooperation and security matters, while Marcos vowed to defend maritime rights in the face of a 'more active attempt by China to annex some territories'.
North Korean leader Kim guided a military demonstration involving a tank unit on Wednesday, according to KCNA.

Data Recap