US stocks gained in a tech-led rebound ahead of earnings and data, while politics took the limelight - Newsquawk Asia-Pac Market Open

US stocks pared some of the prior week's losses ahead of key earnings and data with advances led by outperformance in the Tech sector which rose nearly 2% leading into the big tech earnings and amid a surge in Nvidia shares after reports the chip behemoth is working on a version of its new flagship AI chips for the Chinese market that would be compatible with US export controls. All major indices finished in the green and outperformance was seen in the Nasdaq and Russell 2000, while there was plenty of focus on the US election after President Biden dropped out of the Presidential race over the weekend with VP Harris the front runner for the Democratic nomination although participants are still mulling whether it is too late or not to boost the Dems chance vs Trump.
USD traded marginally firmer in what was a quiet start to the week ahead of a deluge of risk events and amid thin newsflow outside of politics.
Looking ahead, highlights include Singapore CPI & Indian Union Budget.

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US TRADE

US stocks pared some of the prior week's losses ahead of key earnings and data with advances led by outperformance in the Tech sector which rose nearly 2% leading into the big tech earnings and amid a surge in Nvidia shares after reports the chip behemoth is working on a version of its new flagship AI chips for the Chinese market that would be compatible with US export controls. All major indices finished in the green and outperformance was seen in the Nasdaq and Russell 2000, while there was plenty of focus on the US election after President Biden dropped out of the Presidential race over the weekend with VP Harris the front runner for the Democratic nomination although participants are still mulling whether it is too late or not to boost the Dems chance vs Trump.
SPX +1.08% at 5,664, NDX +1.54% at 19,822, DJI +0.32% at 40,415, RUT +1.69% at 2,221.
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NOTABLE HEADLINES

Michigan Governor Whitmer endorsed Harris for President and said she will serve as co-chair of Harris's campaign, while former House Speaker Pelosi endorsed Harris for President.
US Senate Democratic Leader Schumer and House Democratic Leader Jeffries are to endorse Harris as soon as today, according to CNN.

USD traded marginally firmer in what was a quiet start to the week ahead of a deluge of risk events and amid thin newsflow outside of politics.
EUR traded in a tight range after its recent failure to sustain the 1.0900 status against the dollar, while there were comments from ECB's Kazimir who noted that market bets on two more cuts by year-end are not entirely misplaced but not a given or a baseline scenario and that there is no need to rush decisions with the data to set the stage for a September decision.
GBP eked marginal gains with price action in GBP/USD choppy above the 1.2900 level amid a lack of pertinent catalysts.
JPY was firmer on the day following a brief slide in USD/JPY to below the 157.00 level but then recovered off lows with the Japanese currency then pressured by a source report that the BoJ is said to see weak consumption complicating its rate decision and officials are likely to wait until the last minute to finalise their decision after checking the latest data on markets and economic conditions at next week's meeting.

T-notes failed to sustain overnight gains ahead of supply and key US data, while traders digested whether Harris is in a better spot to beat Trump than Biden.

Oil prices continued on the downward trajectory as concerns around China continued to linger.
World refined copper market was in a 65k metric tonne surplus in May 2024, according to ICSG.

MIDDLE EAST

Israeli PM Netanyahu and US President Biden’s meeting was postponed until Wednesday and perhaps Thursday, depending on the US President’s health condition, according to Asharq News citing an Israeli newspaper. It was also reported that Netanyahu requests a meeting with GOP presidential candidate Trump while in the US this week, according to Politico.
Ambrey said a togo-flagged and UAE-managed products tanker was intercepted by the IRGC 61nm Southwest of Iran's Bushehr on Sunday which was carrying 1500 tonnes of marine gas oil, while the interception was likely a counter-smuggling operation by the IRGC.

OTHER

South Korea, Japan and US Defence Ministers are to meet in Tokyo on July 28th, according to Yonhap.

NOTABLE HEADLINES

Chinese Finance Ministry said it will extend tariff exemptions for imports of some US products until 28th February 2025.
BoJ is reportedly said to see weak consumption complicating its rate decision with officials likely to wait until the last minute to finalise their decision after checking the latest data on markets and economic conditions at the gathering ending on July 31st, according to sources cited by Bloomberg. Furthermore, some officials want more time to see the data and other officials see risks that it could miss the chance to lift rates, while sources added that the central bank doesn’t intend to cause any major surprise.
Japanese senior LDP official Motegi said the BoJ should more clearly indicate its policy normalisation path including the chance of several staged rate hikes, while Motegi added it is clear that excessive JPY falls are negative for Japan's economy.

NOTABLE HEADLINES

BoE Executive Director Saporta said the Bank and the market need to work together to prepare for the normalisation of the BoE's balance sheet, while she added expect to move to a world where the BoE is no longer taking extraordinary monetary policy actions and supply most reserves by lending against collateral. BoE's Executive Director also said that a new repo arrangement will not act as a constraint on the QT decision at the September meeting.
ECB's Kazimir said the doors remain open to additional easing should the environment warrant it and market bets on two more cuts by year-end are not entirely misplaced but not a given or a baseline scenario, while there is no need to rush decisions and the data will set the stage for a September decision.