US stocks eked mild gains and S&P 500 touched 5k for the first time - Newsquawk Asia-Pac Market Open

• US stocks eked slight gains in choppy trade with the S&P 500 briefly touching 5k for the first time although closed marginally beneath the level, while the Russell 2000 outperformed with decent gains in the majority of its heavyweights. Furthermore, energy was the front runner among sectors as oil prices rallied amid geopolitical concerns with no progress made on the Gaza ceasefire proposal and Maersk also warned the Red Sea threat has not yet peaked.
• USD eked mild gains and retained the 104.00 level with the dollar supported alongside upside in yields although price action was relatively rangebound between 103.95 to 104.43, while the highlight was Initial Jobless claims data which printed below expectations although Continued Claims increased.
• Looking ahead, highlights include Japanese Money Supply, Malaysian Unemployment, RBA Governor Bullock Appears at the House of Representatives Standing Committee on Economics, Supply from Japan, Holiday Closures in China, Taiwan, South Korea, Indonesia & Vietnam, Early Closures in Hong Kong, Singapore & Malaysia.

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LOOKING AHEAD

• Highlights include Japanese Money Supply, Malaysian Unemployment, RBA Governor Bullock Appears at the House of Representatives Standing Committee on Economics, Supply from Japan, Holiday Closures in China, Taiwan, South Korea, Indonesia & Vietnam, Early Closures in Hong Kong, Singapore & Malaysia.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US stocks eked slight gains in choppy trade with the S&P 500 briefly touching 5k for the first time although closed marginally beneath the level, while the Russell 2000 outperformed with decent gains in the majority of its heavyweights. Furthermore, energy was the front runner among sectors as oil prices rallied amid geopolitical concerns with no progress made on the Gaza ceasefire proposal and Maersk also warned the Red Sea threat has not yet peaked.
• SPX +0.06% at 4,997, NDX +0.16% at 17,783, DJIA +0.13% at 38,726, RUT +1.50% at 1,979.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Barkin (voter) reiterated the Fed can take time on the decision to cut rates and needs to see more data to build confidence inflation is falling. Barkin said upcoming inflation data will almost assuredly get even better over the next five months as we cycle over last year’s inflationary winter and spring but noted that upside inflation risks are still around. Furthermore, Barkin noted ample evidence Americans continue to spend and that past rate hikes are still working their way into the economy.
• Fed's Collins (non-voter) said her baseline for rate cuts this year is similar to the 75bps Fed policymakers' median view from December, while she expects an orderly slowdown in growth this year. Collins said some wage growth exceeding inflation is consistent with the continued move towards 2% inflation and a higher productivity provides some room for higher wage growth, according to a SiriusXM interview.
• US Treasury Secretary Yellen said the FSCO discussed commercial real estate in almost all of its recent meetings and it is obvious there is going to be banking stress and losses associated with commercial real estate, but she does not believe commercial real estate will become a systemic banking risk. Furthermore, Yellen said she is concerned about market stress and could see a non-bank failure.

DATA RECAP

• US Wholesale Inventories MM (Dec) 0.4% vs. Exp. 0.4% (Prev. 0.4%)
• US Wholesale Sales MM (Dec) 0.7% vs. Exp. 0.2% (Rev. -0.1%)
• US Initial Jobless Claims 218k vs. Exp. 220k (Prev. 224k, Rev. 227k)
• US Continued Jobless Claims w/e 1.871M vs. Exp. 1.878M (Prev. 1.898M, Rev. 1.894M)

FX

• USD eked mild gains and retained the 104.00 level with the dollar supported alongside upside in yields although price action was relatively rangebound between 103.95 to 104.43, while the highlight was Initial Jobless claims data which printed below expectations although Continued Claims increased.
• EUR traded ultimately flat against the dollar after two-way trade and as ECB speakers continued to stress data dependence, while Holzmann suggested a certain chance the ECB will not cut rates this year.
• GBP was marginally softer and briefly dipped beneath the 1.2600 handle before recovering most of the losses, while there were comments from Mann who couldn't say if there will be rate cuts this year and noted that a durable drop in services inflation could persuade her to vote to hold rates.
• JPY weakened with USD/JPY at fresh YTD highs amid firmer US yields and recent BoJ comments.
• Mexican Central Bank kept its interest rate at 11.25%, as expected, with the decision unanimous and it removed the previous guidance about needing to hold the key rate for some time.

FIXED INCOME

• Treasuries were lower amid a higher yield environment and as US stock indices lingered around record levels, although a strong 30yr auction stopped Treasuries from making new YTD lows.

COMMODITIES

• Oil prices posted strong gains amid broadening concerns of a widening Middle East conflict as Israel and Hamas have yet to come to a ceasefire agreement.
• Iraq set March Basrah medium crude official selling price to Asia at a discount of USD 0.80/bbl vs Oman/Dubai average and set the OSP to Europe at a discount of USD 5.54/bbl vs dated Brent, while it set the price to North and South America at a discount of USD 1.00/bbl vs ASCI.
• US DoE seeks to buy 3mln bbls of oil for the SPR for July delivery.
• US President Biden administration official said the US review of LNG exports will require months of work, not years, and the US is not concerned about the ability to supply the EU with LNG due to Europe's 'successful' gas demand destruction.

GEOPOLITICAL

• Iran said the US strike on Iraqi militia is a threat to regional security.
• Iraq and the US resumed negotiations over the future of the US-led coalition in Iraq, according to a military spokesperson.
• White House said US President Biden and German Chancellor Scholz will discuss Ukraine, the Middle East and the Red Sea shipping attacks.
• White House said negotiations are ongoing regarding a hostage release and ceasefire deal, while it added that Secretary of State Blinken made it clear the US has concerns regarding Rafah operations.
• Ukrainian President Zelensky said he met army chief Zaluzhnyi to discuss new army leadership and decisions were made to change Ukraine's military tactics, strategy and leadership with Zaluzhnyi to depart and ground forces commander Oleksandr Syrskyi was appointed as the new army chief.
• German economy ministry sources confirmed Germany is considering expropriating assets of Russia's Rosneft although no decision had yet been taken, according to FT.
• Venezuela vowed a 'forceful' response in the disputed region, according to Bloomberg.

ASIA-PAC

NOTABLE HEADLINES

• PBoC released its Q4 monetary policy report in which it vowed to keep monetary policy prudent which will be flexible, precise and effective, while it will fend off risks in key areas, keep liquidity reasonably ample and make good use of pledged supplementary lending facility to support the property market. PBoC will also promote the marketisation of deposit interest rates to drive the overall interest rate level downward and strive to improve the efficiency of loan use through the recovery of some loans, to transfer to more efficient business entities.
• Chinese President Xi said China should enhance the positive economic recovery and China is going to comprehensively deepen reforms, according to Xinhua.
• Chinese President Xi told Russian President Putin in a call that their sides should collaborate strategically and defend the sovereignty, security and development interests of their countries, according to Chinese state media.
• Two US lawmakers urged the Commerce Department to put TikTok parent ByteDance on the export control entity list, according to a letter cited by Reuters.

EU/UK

NOTABLE HEADLINES

• BoE's Mann said financial conditions have eased too much already with numerous Bank Rate cuts embodied in the market curve and mortgage competition reducing those rates. Furthermore, Mann cannot say if there will be rate cuts this year and noted that a durable drop in services inflation could persuade her to vote to hold rates.
• ECB's Lane said in terms of an overall evaluation of their policy trajectory, they need to be further along in the disinflation process before they can be sufficiently confident that inflation will hit the target in a timely manner and settle at the target sustainably.
• ECB's Holzmann said there is a certain chance that the ECB will not cut rates this year and must be sure inflation is in check before the first cut, while he added that high wage deals will show up in inflation eventually, according to Faz interview.
• ECB's Wunsch said he sees some indications, but not strong ones, that wage growth is softening and there is value in waiting to get more comforting data, while he added that wage rises are holding up rate cuts.