US stocks gained amid tech strength and the lowest initial jobless claims since September 2022 - Newsquawk Asia-Pac Market Open

• US stocks were firmer with big tech leading the gains on the back of TSMC's solid earnings and after encouraging data with initial jobless claims at the lowest level since September 2022. There was further upside seen in New York afternoon trade which some traders attributed to the passing of the government stopgap funding bill in the Senate and a post from WSJ's Timiraos citing analyst forecasts for next Friday's PCE showing progress on the Fed's inflation battle.
• USD gained but is off intraday highs with early support from a rising yield environment and a fall in initial jobless claims to the lowest level since September 2022.
• Looking ahead, highlights include Japanese National CPI & Tertiary Industry Activity Index, Malaysia Trade Data.

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LOOKING AHEAD

• Highlights include Japanese National CPI & Tertiary Industry Activity Index, Malaysia Trade Data.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US stocks were firmer with big tech leading the gains on the back of TSMC's solid earnings and after encouraging data with initial jobless claims at the lowest level since September 2022. There was further upside seen in New York afternoon trade which some traders attributed to the passing of the government stopgap funding bill in the Senate and a post from WSJ's Timiraos citing analyst forecasts for next Friday's PCE showing progress on the Fed's inflation battle.
• SPX +0.88% at 4,780, NDX +1.47% at 16,982, DJIA +0.54% at 37,468, RUT +0.55% at 1,923.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Bostic (voter) said he wants to see more evidence of being on a trajectory to 2% and the worst outcome would be to cut rates then having to hike rates again, while he suggested that if inflation progress slows, it is good to keep rates higher for longer. Fed's Bostic said he is open to rate cuts before July if there is convincing evidence inflation is slowing faster than he anticipates and repeated his baseline forecast for rate cuts beginning in Q3 with care needed not to cut too soon.
• US Senate voted to pass the stopgap funding bill to avert a government shutdown.
• CNN's Raju posted on X that the House will pass the plan later today and avert a shutdown for now.
• WSJ's Timiraos posted on X that core PCE is projected to have been mild last month and the modellers who forecast this expect core PCE rose 0.17% from November which would lower the 12-month rate to 2.9%, while the 3-month and 6-month annualised rates would fall to 1.5% and 1.9%.

DATA RECAP

• US Building Permits (Dec) 1.495M vs. Exp. 1.480M (Prev. 1.467M)
• US Housing Starts Number (Dec) 1.46M vs. Exp. 1.43M (Prev. 1.56M, Rev. 1.53M)
• US Initial Jobless Claims 187k vs. Exp. 207k (Prev. 202k, Rev. 203k)
• US Continued Jobless Claims 1.81M vs. Exp. 1.85M (Prev. 1.83M, Rev. 1.83M)
• US Philly Fed Business Index (Jan) -10.6 vs. Exp. -7.0 (Prev. -10.5, Rev. -12.8)

FX

• USD gained but is off intraday highs with early support from a rising yield environment and a fall in initial jobless claims to the lowest level since September 2022.
• EUR weakened against the dollar and printed an intraday low near its 200DMA which resides at 1.0845, while ECB Minutes gave a stale account of the December meeting and provided little new for investors.
• GBP was firmer and just about reclaimed the 1.2700 handle amid the upbeat risk tone, while participants now await UK retail sales data scheduled on Friday.
• JPY was ultimately flat on the day with price action indecisive and on both sides of the 148.00 level, while attention turns to the incoming national CPI data for December.

FIXED INCOME

• Treasuries bear-steepened as the long end failed to recover after a big drop in US jobless claims.

COMMODITIES

• Oil prices were firmer amid mixed inventories, supply headaches, and the widening geopolitical risk.
• US EIA Weekly Crude Stocks w/e -2.492M vs. Exp. -0.6M (Prev. 1.338M)
• IEA OMR (Jan) 2024 global oil demand growth forecast was upgraded by 180k BPD to 1.24mln BPD, citing an improved GDP outlook and Q4 23 price drop, while IEA stands ready to respond decisively if there is a supply disruption.
• Chevron’s (CVX) large Kazakh oil expansion may be delayed to 2025.
• Iraqi oil minister said oil exports are not affected by the Red Sea as most of the country's oil goes to Asia.

GEOPOLITICAL

• Israeli PM Netanyahu said the war will continue on all fronts until the goals Israel set are achieved.
• Arab nations developed a plan to end the Israel-Hamas war and create a Palestinian state in which the plan includes securing a ceasefire and the release of hostages in Gaza, as well as Saudi Arabia formalising ties with Israel. Furthermore, the plan includes Western nations agreeing to formally recognise a Palestinian state, or supporting the Palestinians being granted full membership to the UN and it is hoped to be presented within a few weeks.
• US President Biden said air strikes in Yemen will continue.
• Yemen Houthi chief said US strikes did not impact its military capability and they are now in direct confrontation with the US and UK.
• Iranian navy commander said destroyer Alborz is in the Red Sea to escort Iranian commercial ships and oil tankers.
• UK maritime security firm Ambrey said a Marshall Islands-flagged and US-owned tanker reported four unmanned aerial vehicles approached and circled the vessel approximately 87 miles southeast of Yemen's Mukalla, according to an advisory note.
• Pakistan's armed forces are on extremely high alert and said that any further "misadventure" from Iran will be met forcefully, according to Reuters citing Pakistan's top security official.
• White House's Kirby said Iran’s attack was another example of Iran's destabilising behaviour in the region and does not want to see an Iran with nuclear weapons.
• NATO plans to mobilise 90,000 soldiers for a manoeuvre aimed at deterring Russian aggression, in the biggest exercise staged by the alliance since the end of the Cold War, according to dpa.

ASIA-PAC

NOTABLE HEADLINES

• China's Cabinet amended rules for the central bank monetary policy committee which affirm the communist party's leadership over thr work of the PBoC monetary policy committee, while it includes strengthening expectation guidance and market communication of the committee.

EU/UK

NOTABLE HEADLINES

• ECB Minutes stated that caution was warranted as inflation would probably pick up in the near term, while it was argued that the strength of disinflation was likely to be underestimated and the outlook for economic activity in the staff projections seemed too optimistic.
• German lawmakers approved the delayed 2024 federal finance plan and the budget is said to foresee EUR 39bln in net new borrowing, which would allow it to stay within its self-imposed brake on issuance, according to Reuters sources.
• German Finance Minister Lindner said he cannot see a situation that would justify suspending the debt brake, while he added that Germany will see a higher level of growth in the mid-term.