US stocks finished mixed but futures were boosted after-hours on NVIDIA earnings - Newsquawk Asia-Pac Market Open

• US stocks were choppy with Nvidia (NVDA) pressured again as it headed into its much-anticipated earnings release after hours as the options market implied around a 10% move. Treasuries were sold amid another slew of corporate debt and an awful 20yr auction which tailed by a record 3.3bps, while Bunds remained pressured and slipped to fresh YTD lows in lack of an obvious catalyst. Attention was also on the FOMC minutes although this was a typical non-event and echoed the broader tone of Fed speak seen in the wake of the January Fed meeting with officials cautioning about the risks of cutting too soon.
• US stock index futures were boosted after-hours following NVIDIA reported 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).
• USD was ultimately flat on the session with the DXY back around the 104.00 level after the FOMC minutes did little to alter the narrative given it was largely a repeat of recent Fed communications as most policymakers noted the 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.
• Looking ahead, highlights include Australian & Japanese Flash PMIs, New Zealand Credit Card Spending, BoK Rate Decision, Supply from Japan.

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LOOKING AHEAD

• Highlights include Australian & Japanese Flash PMIs, New Zealand Credit Card Spending, BoK Rate Decision, Supply from Japan.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US stocks were choppy with Nvidia (NVDA) pressured again as it headed into its much-anticipated earnings release after hours as the options market implied around a 10% move. Treasuries were sold amid another slew of corporate debt and an awful 20yr auction which tailed by a record 3.3bps, while Bunds remained pressured and slipped to fresh YTD lows in lack of an obvious catalyst. Attention was also on the FOMC minutes although this was a typical non-event and echoed the broader tone of Fed speak seen in the wake of the January Fed 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 Barkin (2024 voter) said the big picture of US data on inflation and jobs has been "remarkable" but recent PPI and CPI have been "less good" and are showing the dependence of disinflation on goods, while he added that January data "made things harder" but should not put too much weight on the month's data given the seasonal issue, according to Sirius XM.
• Fed's Bowman (voter, hawk) said the time for lower rates is "certainly not now" and that the housing market isn't influencing the Fed rate cut decision.
• 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).

FX

• USD was ultimately flat on the session with the DXY back around the 104.00 level after the FOMC minutes did little to alter the narrative given it was largely a repeat of recent Fed communications as most policymakers noted the 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 eked mild gains with price action choppy on both sides of the 1.0800 level.
• GBP traded marginally positive and held on to the 1.2600 handle against the dollar.
• JPY slightly weakened with USD/JPY back above the 150.00 level amid higher US yields.

FIXED INCOME

• Treasuries were sold across the curve with corporate debt supply and an awful 20yr auction weighing, while the FOMC minutes noted that officials expressed caution about lowering rates too quickly.

COMMODITIES

• Oil prices were firmer after gradually reversing the losses in Europe throughout the session.
• 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.
• US Energy Secretary said a months-long LNG pause does not affect any projects in the long term and will not impact any relationship with allies.
• 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.

GEOPOLITICAL

• Israeli government voted overwhelmingly not to recognise the establishment of a Palestinian state.
• 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.
• UKMTO received reports of an explosion and a flash sighted in the southern Red Sea 40NM west of Yemen's Hodeidah, according to Reuters citing an advisory note.
• Iran provided Russia with hundreds of surface-to-surface ballistic missiles in which shipments began in early January and an Iranian official said there will be more shipments, according to Reuters sources.
• EU approved a 13th sanctions package against Russia, according to Reuters citing EU sources.

ASIA-PAC

NOTABLE HEADLINES

• China is said to be tightening its grip on stocks with a net sale ban at the open and close, according to Bloomberg sources. Major institutional investors have been banned from reducing equity holdings at the open and close of each session with firms affected by the ban unable to offload more shares than they buy during the first and last 30 minutes of the trading day.
• US targets China's top chipmaking plant after making a more sophisticated chip for the Huawei Mate 60 Pro in which the Commerce Department sent dozens of letters to SMIC (SMIC) and suspended permission to sell to its most advanced plant, according to Reuters citing sources.
• Japanese government cut its view on the economy for the first time since November 2023 and stated the economy is recovering moderately though it appears to be stalling recently, while it lowered the view on consumer spending for the first time since February 2022 and cut the view on industrial production for the first time since March 2023 citing a suspension of some auto production and shipments.

EU/UK

NOTABLE HEADLINES

• BoE's Dhingra said overall, price developments strongly signal that inflation is already on a path of sustainably meeting the target over the medium term, while her view is evidence that errs on the side of overtightening is not compelling as it often comes with hard landings and a scarring of supply capacity.
• ECB's Wunsch said it may be too early to get hopes up on rates and can't exclude policy staying tight for longer than seen, while he added that wage pressures are high and labour markets are tight.
• German Cabinet approved the economic report with 2024 GDP revised to 0.2% (prev. 1.5%), according to Reuters citing sources.
• German Economy Minister said German energy supply is secure and inflation has eased, while they are getting out of the crisis more slowly than hoped and the workforce shortage is the biggest challenge for Germany which will become more acute in the coming years.
• 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.

DATA RECAP

• EU Consumer Confidence Flash (Feb) -15.5 vs. Exp. -15.6 (Prev. -16.1)