US stocks extended on post-FOMC gains as focus turns to the looming NFP report - Newsquawk Asia-Pac Market Open

• US stocks trended higher in a resumption of the post-FOMC impulse although they were briefly knocked after the hotter-than-expected Unit Labour Costs and beneath-forecast Initial Jobless Claims data, with all eyes now turning to Friday's NFP report, while futures were further boosted after-hours following better-than-expected earnings from Apple which also announced an additional USD 110bln buyback.
• USD extended on post-Fed weakness ahead of NFPs with firmer-than-expected unit labour costs only providing brief support.
• Looking ahead, highlights include Australian Home Loans, Singapore Retail Sales, Supply from Australia, Holiday Closures in China and Japan.

More Newsquawk in 2 steps:

1. Subscribe to the free premarket movers reports

2. Trial Newsquawk’s premium real-time audio news squawk box for 7 days

LOOKING AHEAD

• Highlights include Australian Home Loans, Singapore Retail Sales, Supply from Australia, Holiday Closures in China and Japan.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US stocks trended higher in a resumption of the post-FOMC impulse although they were briefly knocked after the hotter-than-expected Unit Labour Costs and beneath-forecast Initial Jobless Claims data, with all eyes now turning to Friday's NFP report, while futures were further boosted after-hours following better-than-expected earnings from Apple which also announced an additional USD 110bln buyback.
• SPX +0.91% at 5,064, NDX +1.29% at 17,541, DJIA +0.85% at 38,225, RUT +1.81% at 2,016.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fox's Gasparino noted that "The new emerging consensus from Wall Street c-suite is that Powell wants to cut rates by September".

APPLE EARNINGS

• Apple Inc (AAPL) Q2 2024 (USD): EPS 1.53 (exp. 1.50), Revenue 90.75bln (exp. 90.01bln); to buy back additional 110bln of shares and boosts quarterly dividend 4% to 0.25/shr, Revenue breakdown: Products 66.89bln (exp. 66.95bln), iPhone 45.96bln (exp. 45.76bln), Mac 7.45bln (exp. 6.79bln), iPad 5.56bln (exp. 5.91bln), Wearables, home and accessories 7.91bln (exp. 8.29bln), Service 23.87bln (exp. 23.28bln), Greater China revenue 16.37bln (exp. 15.87bln).

DATA RECAP

• US Factory Orders MM (Mar) 1.6% vs. Exp. 1.6% (Prev. 1.4%, Rev. 1.2%)
• US Unit Labor Costs Prelim. (Q1) 4.7% vs. Exp. 3.3% (Prev. 0.4%)
• US Productivity Prelim. (Q1) 0.3% vs. Exp. 0.8% (Prev. 3.2%, Rev. 3.5%)
• US Initial Jobless Claims w/e 208.0k vs. Exp. 212.0k (Prev. 207.0k, Rev. 208k)
• US Continued Jobless Claims w/e 1.774M vs. Exp. 1.797M (Prev. 1.781M, Rev. 1.774M)

FX

• USD extended on post-Fed weakness ahead of NFPs with firmer-than-expected unit labour costs only providing brief support.
• EUR edged mild gains thanks to the weaker dollar with little news flow in Europe other than a slight revision higher to the EU HCOB Manufacturing PMI data in April, while technicians are eyeing 1.07 as a key support level which also coincides with the 200dma.
• GBP returned to flat territory after fluctuating back and forth of the 1.2500 level with local election results to be announced sporadically from today onwards and with the BoE meeting scheduled next week.
• JPY outperformed as BoJ data suggested that intervention likely occurred post-FOMC which saw USD/JPY revisit yesterday's trough around the 153.00 level where the floor held.
• Czech CNB Repo Rate 5.25% vs Exp. 5.25% (Prev. 5.75%).

FIXED INCOME

• Treasuries steepened in the fallout from a dovish Powell ahead of supply and NFP.

COMMODITIES

• Oil prices were choppy and settled more-or-less flat after early strength in Europe waned amid 'positive' Middle East rhetoric.
• OPEC+ could extend voluntary oil cuts beyond Q2, according to Reuters sources. Furthermore, formal talks are yet to start and one source said cuts could be extended until year-end, while a source noted that OPEC+ was not yet leaning one way or the other on extending cuts.
• Iraq's Oil Ministry said Iraq exported its first shipment of 10.7k tonnes of propane.

GEOPOLITICAL

MIDDLE EAST

• Syrian media reported explosions were heard in the vicinity of the capital Damascus and that Israel bombed targeted sites of Iranian factions near the Najha area, south of Damascus, according to Sky News Arabia.
• Israeli Army radio reported that security services are examining alternatives to a large military operation in Rafah, according to Sky News Arabia.
• Hamas said it is studying the cease-fire proposal with a positive spirit, while it was separately reported that a Hamas delegation is to visit Egypt soon for further ceasefire negotiations, according to a statement cited by Reuters. Furthermore, Hamas Chief Haniyeh and the Qatari Foreign Minister agreed to complete discussions on a ceasefire to “mature” an agreement mediated by Qatar and Egypt, via Asharq.
• Palestinian President’s adviser Mahmoud Al-Habbash said Israeli PM Netanyahu does not want a Palestinian state and prefers to separate Gaza from the West Bank, according to Al Hadath.
• A senior Egyptian official told local media that there is positive progress in the truce negotiations between Israel and Hamas amid 'extensive Egyptian contacts with all parties', while Hamas has not responded yet on the latest proposal, according to Walla News.
• Pro-Qatari Al-Arabi Al-Jadid newspapers cited Egyptian sources that noted contacts with Hamas and Israel succeeded in resolving points that were in dispute and currently the dispute revolves around one issue although there is limited guarantee in light of past experience.
• Israel National Security Minister Gvir called on PM Netanyahu to remove Defence Minister Galant from office as he is not fit to continue his work as the defence minister.
• Israel's Foreign Minister said Turkish President Erdogan is breaking agreements by blocking ports for Israeli imports and exports.
• US President Biden responded no when asked if protests have forced him to reconsider his policies in the Middle East. It was also reported that the White House said there is no new meeting on the Israel ground offensive in Rafah scheduled and the US position opposing a Rafah invasion has not changed.

OTHER

• White House's Kirby said the US is not taking sanctions off the table with regards to Russia and North Korea, while the US is not seeing any immediate changes that China is changing policies on helping Russia's military.
• Russia has reportedly been shipping refined petroleum to North Korea above the 500-barrel annual cap mandated by the UN Security Council and shipped 165k barrels to North Korea in March, while it could sustain these shipments indefinitely and the US is working with allies on imposing sanctions in response, according to a US official cited by Reuters.

ASIA-PAC

NOTABLE HEADLINES

• BoJ data suggested Japanese FX intervention on May 1st and may have spent JPY 3.26tln-3.66tln, according to Reuters.
• Japan's top currency Diplomat Kanda said cannot overlook excessive FX moves having a major impact on Japan's economy, while he made no comment on FX intervention but said he will deal appropriately with market moves when needed 24 hours a day, whether he's "on a plane or overseas".
• US FCC said roughly 40% of US telecom companies cannot replace Huawei or ZTE equipment in US networks without additional government funding.

EU/UK

NOTABLE HEADLINES

• ECB's Lane said given the lags in transmission, the tightening effects from past interest rate hikes are still unfolding, while he noted expectations of future inflation normalising further and that leaving nominal rates unchanged implies a mechanical increase in real interest rates. Lane said moving from one meeting to the next meeting and from one projection round to the next projection round allows for the accumulation of further data that can help inform the rate decision. Furthermore, Lane said **inflation has declined more quickly than expected and noted the more the data validates inflation coming back to the target, the more they will be able to remove restrictions this year and next year.

DATA RECAP

• EU HCOB Manufacturing Final PMI (Apr) 45.7 vs. Exp. 45.6 (Prev. 45.6)
• German HCOB Manufacturing PMI (Apr) 42.5 vs. Exp. 42.2 (Prev. 42.2)
• French HCOB Manufacturing PMI (Apr) 45.3 vs. Exp. 44.9 (Prev. 44.9)
• Italian HCOB Manufacturing PMI (Apr) 47.3 vs. Exp. 50 (Prev. 50.4)