US stocks gained and yields declined after a rise in jobless claims - Newsquawk Asia-Pac Market Open

• US stocks advanced throughout most of the US session amid a lower yield environment after a rise in initial jobless claims data which surpassed all analyst estimates, while the gains in stocks were broad-based with the majority of sectors green with Consumer Discretionary, Staples and Industrials the outperformers although Energy lagged and was the sole sector in the red as it tracked crude prices lower on mixed reporting around a Gaza ceasefire.
• USD was pressured amid a decline in yields and ongoing regional banking concerns which saw KRE drop by another 2.5%. US data was mixed as jobless claims rose above forecasts and unit labour costs were softer than expected but productivity was above expectations and ISM Manufacturing PMI was stronger than expected, while focus turns to Friday's NFP report.
• Looking ahead, highlights include South Korean CPI, Japanese Monetary Base, Australian Home Loans & PPI, Supply from Australia.

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LOOKING AHEAD

• Highlights include South Korean CPI, Japanese Monetary Base, Australian Home Loans & PPI, Supply from Australia.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US stocks advanced throughout most of the US session amid a lower yield environment after a rise in initial jobless claims data which surpassed all analyst estimates, while the gains in stocks were broad-based with the majority of sectors green with Consumer Discretionary, Staples and Industrials the outperformers although Energy lagged and was the sole sector in the red as it tracked crude prices lower on mixed reporting around a Gaza ceasefire.
• SPX +1.25% at 4,906, NDX +1.21% at 17,344, DJIA +0.97% at 38,519, RUT +1.39% at 1,974.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US Senate Majority Leader Schumer said the full text of the national security supplemental bill will be posted as early as Friday and no later than Sunday with the first vote to take place no later than Wednesday.
• Atlanta Fed GDPnow (Q1) rose to 4.2% from 3.0%.

NOTABLE EARNINGS

• Apple Inc (AAPL) Q1 2024 (USD): EPS 2.18 (exp. 2.10), Revenue 119.58bln (exp. 117.91bln).
• Amazon.com Inc (AMZN) Q4 2023 (USD): EPS 1.00 (exp. 0.80), Revenue 169.96bln (exp. 166.21bln)
• Meta Platforms Inc (META) Q4 2023 (USD): EPS 5.33 (exp. 4.96), Revenue 40.11bln (exp. 39.17bln); authorised 50bln increase to share buyback programme and declared cash quarterly dividend of 0.50/shr.

DATA RECAP

• US S&P Global Manufacturing PMI Final (Jan) 50.7 (Prev. 50.3)
• US ISM Manufacturing PMI (Jan) 49.1 vs. Exp. 47.0 (Prev. 47.4, Rev. 47.1)
• US ISM Manufacturing New Orders Idx (Jan) 52.5 (Prev. 47.1, Rev. 47.0)
• US ISM Manufacturing Prices Paid (Jan) 52.9 vs. Exp. 46.9 (Prev. 45.2)
• US ISM Manufacturing Employment Index (Jan) 47.1 (Prev. 48.1, Rev. 47.5)
• US Construction Spending MM (Dec) 0.9% vs. Exp. 0.5% (Prev. 0.4%, Rev. 0.9%)
• US Unit Labour Costs (Q4 P) 0.5% vs. Exp. 1.6% (Prev. -1.2%, Rev. -1.1%)
• US Initial Jobless Claims 224.0k vs. Exp. 212.0k (Prev. 214.0k, Rev. 215k)
• US Continued Jobless Claims 1.898M vs. Exp. 1.84M (Prev. 1.833M, Rev. 1.828M)
• US Challenger Layoffs (Jan) 82.307k (Prev. 34.817k)

FX

• USD was pressured amid a decline in yields and ongoing regional banking concerns which saw KRE drop by another 2.5%. US data was mixed as jobless claims rose above forecasts and unit labour costs were softer than expected but productivity was above expectations and ISM Manufacturing PMI was stronger than expected, while focus turns to Friday's NFP report.
• EUR benefitted from the dollar's demise and gained a firm footing above the 1.0800 level.
• GBP was underpinned following the BoE rate decision to keep rates unchanged, as expected, but with a clear divergence of views on the MPC which saw a three-way vote split with Haskel and Mann opting for a 25bp hike, while Governor Bailey commented that things are moving in the right direction but they are not yet at the point where they can lower rates.
• JPY strengthened which saw USD/JPY briefly dip below the 146.00 handle on narrowing yield differentials.
• Riksbank maintained its Rate at 4.00% as expected, while it increased the monthly bond sale programme to SEK 6.5bln (prev. 5bln, exp. 7bln-8bln). Riksbank said the rate can probably be cut sooner than was indicated in the November forecast and a rate cut in H1 cannot be ruled out.
• BoC Governor Macklem reiterated that if new developments push inflation higher, the BoC may still need to hike rates, while he wants to see inflationary pressures continue to ease and a clear downward momentum in underlying inflation.

FIXED INCOME

• Treasuries bull-flattened after rising jobless claims and more bank sell-offs despite strong ISM manufacturing data.

COMMODITIES

• Oil prices eventually declined despite a very choppy NY afternoon with pressure from conflicting ceasefire reports.
• OPEC+ is to review extending 2.2mln BPD voluntary cuts due to expire end of Q1 2024 early March, according to Reuters citing two OPEC+ sources.
• OPEC+ JMMC made no recommendation on oil output policy and reiterated a readiness to take additional measures, while they will meet next on April 3rd, according to Reuters citing sources. It was also noted that there was a high level of cohesion within the group, according to EnergyIntel.
• Russian Deputy PM Novak said the situation in the oil market is stable and they are monitoring it, while they are ready to make any decisions necessary for oil markets which could be taken at any moment. Novak added that the Middle East and Red Sea situations are having an impact on oil markets and the lack of oil tankers.

GEOPOLITICAL

• Al Jazeera initially posted on X that Qatar said Israel agrees to a ceasefire proposal and Hamas gave positive confirmation. However, the post was later deleted, while a Qatari official said there was no ceasefire deal yet for Gaza and that Hamas received the proposal positively but it has not responded yet.
• Hamas said they are still in the stage of consultation between internal and foreign leaders on the exchange deal, while it received the Paris truce proposal but has not given a response to any parties and it is still being studied. Furthermore, it cannot say the current stage of negotiation is zero but cannot say they have reached an agreement.
• Israel's Defence Minister said Hamas' Khan Younis brigade has been dismantled and Israel will also move against Rafah on Gaza's border with Egypt.
• White House official said US President Biden is signing an order implementing new measures to target activities that undermine peace in the West Bank, while the order includes financial sanctions and visa restrictions which apply to both Israelis and Palestinians.
• US reportedly approved plans for a series of strikes over a number of days against targets including Iranian personnel and facilities inside Iraq and Syria in response to recent attacks targeting US forces with the weather to be a major factor in the timing of the strikes, according to CBS News citing officials.
• US Defense Secretary Austin said the US will continue to avoid wider conflict but will take necessary actions for defence and President Biden will not tolerate attacks on US troops. Austin said they will have a multi-tiered response to Jordan attacks and have the ability to respond a number of times, while he called on Iran to stop supplying Houthis with weapons and said he does not see an all-out conflict between Israel and Lebanese counterparts.
• Yemen's Houthis said they targeted a British merchant vessel in the Red Sea.
• Russian Deputy Foreign Minister said Russia has no plans to deploy nuclear weapons in other countries except Belarus.

CRYPTO

• Binance's push to re-enter the UK was reportedly foiled by regulatory challenges, according to Bloomberg.

ASIA-PAC

NOTABLE HEADLINES

• PBoC Governor Pan said measures should be taken by all means to increase the capital investment of the entire society.
• Chinese Communist Party issued guidelines for responding to low temperatures, rain, snow and ice around the Spring Festival as the weather could affect transport, power supply and mobility of people.

EU/UK

NOTABLE HEADLINES

• BoE kept rates at 5.25%, as expected, while the vote split was three-way in which Mann and Haskel voted for a rate hike (exp. 1), Dinghra voted for a rate cut (exp. 0) and 6 MPC members voted to keep rates unchanged rates (exp. 8). BoE dropped its "further tightening" bias but will ensure the Bank Rate is restrictive for sufficiently long to return inflation to the target.
• BoE Governor Bailey said things are moving in the right direction but are not yet at the point where they can lower rates, while the BoE must keep policy sufficiently restrictive for sufficiently long and how long policy must remain restrictive will be based on incoming data. Bailey said will not speculate about how long rates will be kept at current levels and will not speculate on what the MPC will do at the next meeting, as well as noted that the MPC is joining the 'no rate cut until there is more evidence' club. Furthermore, he said good news on the economy has removed the need for a warning that rates could rise again and the MPC does not need to see inflation back at the target to cut rates but needs to see evidence that it is heading back to the target.
• UK Chancellor Hunt said if he does bring down taxes, this will be in a responsible way and he is positive that rates appear to have peaked.
• ECB's Lane said Red Sea issues are fairly contained given the small contribution of shipping cost to inflation, while he added that wage increases are still expected to drive a rebound.
• ECB's Centeno said if inflation continues on the same trajectory in the coming months, it is expected that the ECB's next decision is to cut rates.
• ECB's Herodotou expects rates to start to decline this year but it must be a data-based approach and any move must not be too fast or too late.

DATA RECAP

• UK S&P Global Manufacturing PMI (Jan) 47.0 vs. Exp. 47.3 (Prev. 47.3)
• German HCOB Manufacturing PMI (Jan) 45.5 vs. Exp. 45.4 (Prev. 45.4)
• EU HCOB Manufacturing Final PMI (Jan) 46.6 vs. Exp. 46.6 (Prev. 46.6)
• EU HICP Flash YY (Jan) 2.8% vs. Exp. 2.8% (Prev. 2.9%)
• EU HICP-X F, E, A&T Flash YY (Jan) 3.3% vs. Exp. 3.2% (Prev. 3.4%)
• EU Unemployment Rate (Dec) 6.4% vs. Exp. 6.4% (Prev. 6.4%)