US stocks finished mixed, while yields and the dollar climbed after better-than-expected data - Newsquawk Asia-Pac Market Open

• US stocks ultimately closed mixed with outperformance in the DJIA and weakness in the small-cap Russell 2000 as participants digested earnings releases and the latest data including better-than-expected Retail Sales, Initial Jobless Claims and Philly Fed Index which lifted the dollar and yields. Most sectors were subdued although Tech, Energy and Financials gained as semiconductors were underpinned by TSMC earnings and with Nvidia at fresh record highs, while Financials benefitted from Blackstone's strong results.
• USD was firmer with a bout of strength seen owing to data releases including US Retail Sales which rose more than expected and Initial Jobless Claims unexpectedly fell, while the Philly Fed surpassed the upper bound of the forecast range. Focus for the dollar now turns to Housing Starts and Building Permits, as well as Fed speak from Bostic, Kashkari and Waller on Friday.
• Looking ahead, highlights include Japanese CPI, Chinese GDP, Industrial Production, Retail Sales & House Prices, Supply from Australia.

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LOOKING AHEAD

• Highlights include Japanese CPI, Chinese GDP, Industrial Production, Retail Sales & House Prices, Supply from Australia.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks ultimately closed mixed with outperformance in the DJIA and weakness in the small-cap Russell 2000 as participants digested earnings releases and the latest data including better-than-expected Retail Sales, Initial Jobless Claims and Philly Fed Index which lifted the dollar and yields. Most sectors were subdued although Tech, Energy and Financials gained as semiconductors were underpinned by TSMC earnings and with Nvidia at fresh record highs, while Financials benefitted from Blackstone's strong results.
• SPX -0.02% at 5,841, NDX +0.08% at 20,190, DJI +0.37% at 43,239, RUT -0.25% at 2,281.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US President Biden announced an additional USD 4.5bln in student debt cancellation for over 60,000 borrowers through the PSLF program.
• US Treasury Secretary Yellen is to warn that the economic policies proposed by Presidential Candidate Trump would fuel inflation and harm business, according to NYT.
• WSJ's Timiraos noted that economists who map the CPI and PPI into the PCE think core inflation for the Fed's preferred gauge will be around 0.26% in September which is slightly below the Sept CPI of 0.31% but the highest M/M reading since March. Timiraos added it would lower the 6-month annualised rate to 2.2% from 2.4% in August and the Y/Y rate to 2.6% from 2.7%, while headline PCE is seen falling to 2.1% Y/Y.

DATA RECAP

• US Retail Sales MM (Sep) 0.4% vs. Exp. 0.3% (Prev. 0.1%)
• US Industrial Production MM (Sep) -0.3% vs. Exp. -0.2% (Prev. 0.8%, Rev. 0.3%)
• US Manufacturing Output MM (Sep) -0.4% vs. Exp. -0.1% (Prev. 0.9%, Rev. 0.5%)
• US Philly Fed Business Index (Oct) 10.3 vs. Exp. 3.0 (Prev. 1.7)
• US Initial Jobless Claims 241.0k vs. Exp. 260.0k (Prev. 258.0k, Rev. 260k)
• US Continued Jobless Claims 1.867M vs. Exp. 1.865M (Prev. 1.861M, Rev. 1.858M)

FX

• USD was firmer with a bout of strength seen owing to data releases including US Retail Sales which rose more than expected and Initial Jobless Claims unexpectedly fell, while the Philly Fed surpassed the upper bound of the forecast range. Focus for the dollar now turns to Housing Starts and Building Permits, as well as Fed speak from Bostic, Kashkari and Waller on Friday.
• EUR was pressured against the buck following US data, while the ECB's widely-expected rate cut spurred very little reaction.
• GBP eked marginal gains although price action was indecisive in which GBP/USD oscillated around the 1.3000 level.
• JPY weakened with USD/JPY returning to 150.00 territory as US yields edged higher post-data.
• CBRT maintained its Weekly Repo Rate unchanged at 50% as widely expected and noted the uncertainty regarding the pace of improvement in inflation has increased in light of incoming data and continues to pose risks to the disinflation process. CBRT also said the tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range.
• Norges Bank Governor Bache said the policy rate needs to be kept at today's level for a period ahead but suggested the time to ease is approaching.
• Canadian PM Trudeau is to shuffle his cabinet as four ministers plan to step down, according to Toronto Star.

FIXED INCOME

• T-notes were lowed and the curve bear steepened after a rise in Retail Sales and a fall in Initial Jobless Claims.

COMMODITIES

• Oil prices were ultimately firmer but with only mild gains seen on what was a choppy session despite the surprise draw in crude inventories, while on the geopolitical front, Israeli PM Netanyahu confirmed that Israel killed Hamas leader Sinwar but added that the task is not complete with Israel to continue full force until its hostages are returned.
• US EIA Weekly Crude Stocks -2.19M vs. Exp. 2.25M (Prev. 5.81M).

GEOPOLITICAL

MIDDLE EAST

• Israeli PM Netanyahu met with his security team at the PM office and later confirmed the death of Hamas leader Sinwar, while he added that Israel’s task is not complete and the war is not over with Israel to continue full force until its hostages are returned.
• Israeli police earlier said its forensics team identified Sinwar's body according to pictures of his teeth that were taken by soldiers on the ground and compared to photos of his teeth Israel has, according to Axios's Ravid.
• Hamas was reportedly aware of the death of Hamas leader Sinwar on Wednesday, according to Al Arabiya citing sources.
• Hamas will not show any flexibility in the negotiations in the short term but after a replacement for Sinwar is appointed, there may be changes in tone, according to Kann News citing sources.
• Hezbollah parliamentary member said they have chosen to continue the fight through every means and the leadership is carefully coordinating with the speaker on a ceasefire.
• White House's Sullivan said they had constructive communications with Israel on the potential response to Iran.
• US is to try and push a Gaza ceasefire proposal forward, while there have been no negotiations for a Gaza ceasefire for the past few weeks.
• US Treasury sanctioned a network for shipping oil on behalf of Iran-backed Houthi financier.
• Iraqi armed factions announce the bombing of two vital targets in southern Israel today with marches, according to Sky News Arabia.

OTHER

• Ukraine President Zelensky said he told Republican Presidential Candidate Trump that Ukraine has only two options which are nuclear weapons or NATO membership.
• China’s Defence Ministry said China and Australia held a meeting between both defence ministries in Beijing, while the two sides had a frank and in-depth exchange of views on the relations between the two militaries, maritime and air security, and international and regional security issues.

ASIA-PAC

NOTABLE HEADLINES

• US Treasury Secretary Yellen said China doesn't need one-off checks to boost spending and consensus urges China to boost the consumer share of income, while White House Economic Adviser Singh said data shows China is using its market power to gain economic and geopolitical leverage and the US sees an unrivalled level and rate of growth in China's subsidies.
• China has invited the EU technical team to China to continue the next phase of face-to-face negotiations.
• Japan Bankers Association Chair thinks the Japanese economy is really at a tipping point with wage increases.

EU/UK

NOTABLE HEADLINES

• ECB cut its key rates by 25bps with the Deposit Rate lowered to 3.25%, as expected, while it will keep policy rates sufficiently restrictive for as long as necessary and noted that domestic inflation remains high, as wages are still rising at an elevated pace. ECB said inflation is expected to rise in the coming months before declining to target in the course of next year and the disinflationary process is well on track. Furthermore, it stated that the Governing Council is not pre-committing to a particular rate path.
• ECB President Lagarde stated there will be a lot more data available before the December 12th policy meeting and today's policy decision was unanimous, while she added there are still risks on both sides of the inflation forecast. Furthermore, Lagarde said she did not open the door to another rate cut in December and there is no question that ECB policy is currently restrictive.
• ECB officials reportedly see a December cut very likely with the 2% goal nearer, according to Bloomberg. It was also reported that sources cited by Reuters noted that ECB policymakers do expect a rate cut in December barring a major rise in data such as core and services inflation or in indicators of economic growth, while US elections and threat of a fresh trade tariff if Trump is elected were seen as a major source of uncertainty.

DATA RECAP

• EU HICP Final MM (Sep) -0.1% vs. Exp. -0.1% (Prev. 0.1%)
• EU HICP Final YY (Sep) 1.7% vs. Exp. 1.8% (Prev. 1.8%)