US stocks lacked firm direction ahead of upcoming key events - Newsquawk Asia-Pac Market Open

US stocks were mixed and finished relatively flat in what seemed to be the calm before the storm with light catalysts ahead of the looming key events, while the initial advances in equity futures pre-market trade were faded from the open with lows in stocks later seen in the US afternoon. Furthermore, an underwhelming Open AI Spring update which included the announcement of Chat GPT-4o (which will be free), briefly weighed on chip names and Microsoft (MSFT), while Google (GOOGL) caught a bid on the lack of search engine announcement and meme stocks (GME, AMC) surged on the return of "TheRoaringKitty" on X (formerly Twitter).
USD was slightly softer albeit in a choppy start to the week with price action kept within tight parameters (105.05-105.36) ahead of upcoming key risk events including comments from Fed Chair Powell at a Netherlands banking event on Tuesday, as well as US PPI and CPI on Tuesday and Wednesday, respectively.
Looking ahead, highlights include New Zealand Electronic Card Retail Sales, Japanese PPI, Australian Westpac Consumer Sentiment, Supply from Australia & Japan.

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Highlights include New Zealand Electronic Card Retail Sales, Japanese PPI, Australian Westpac Consumer Sentiment, Supply from Australia & Japan.
Click here for the Newsquawk Week Ahead.

US TRADE

US stocks were mixed and finished relatively flat in what seemed to be the calm before the storm with light catalysts ahead of the looming key events, while the initial advances in equity futures pre-market trade were faded from the open with lows in stocks later seen in the US afternoon. Furthermore, an underwhelming Open AI Spring update which included the announcement of Chat GPT-4o (which will be free), briefly weighed on chip names and Microsoft (MSFT), while Google (GOOGL) caught a bid on the lack of search engine announcement and meme stocks (GME, AMC) surged on the return of "TheRoaringKitty" on X (formerly Twitter).
SPX -0.02% at 5,221, NDX +0.21% at 18,198, DJIA -0.21% at 39,431, RUT +0.11% at 2,062.
Click here for a detailed summary.

NOTABLE HEADLINES

Fed's Jefferson (voter) said the economy has made a lot of progress and inflation has retreated, while he added that the labour market has been resilient and he views the economy as in a solid position. Jefferson said inflation is a source of concern and it is appropriate that the Fed maintain the policy rate in restrictive territory, as well as noted it is important to look for more evidence inflation is abating.
US Treasury Secretary Yellen said President Biden's top priority is bringing down inflation and noted that tax revenues should be used to lower the deficit, while she added that higher rates path worsens fiscal challenge.

DATA RECAP

NY Fed SCE (April) 1yr ahead inflation expectations 3.3% (prev. 3.0%), 3yr at 2.8% (prev. 2.9%), 5yr at 2.8% (prev. 2.6%), while year-ahead expected home price increase is at 3.3% (prev. 3.0%).

USD was slightly softer albeit in a choppy start to the week with price action kept within tight parameters (105.05-105.36) ahead of upcoming key risk events including comments from Fed Chair Powell at a Netherlands banking event on Tuesday, as well as US PPI and CPI on Tuesday and Wednesday, respectively.
EUR traded firmer against the dollar and briefly reclaimed the 1.0800 status and breached its 200DMA before reversing some of the gains.
GBP mildly strengthened in which GBP/USD climbed above its 200DMA, while the focus turns to UK employment and comments from BoE's Pill on Tuesday.
JPY weakened with USD/JPY back at 156.00 territory with upside seen after the NY Fed SCE saw higher 1yr ahead inflation expectations.
SNB Chair Jordan said the fight against inflation is far advanced and the outlook for Swiss inflation is now much better, while uncertainty remains and have to follow it.

Treasuries pared early gains after rising consumer inflation expectations ahead of inflation data and Fed Chair Powell.

Oil prices were firmer to start the week but settled off highs, in a day with light oil-specific newsflow as participants await the next catalyst such as US CPI data.
Russian Deputy PM Novak said they are to consider lifting the ban on gasoline exports following the formation of a new government, according to RIA.

MIDDLE EAST

Israeli Defence Minister Gallant’s office said US Secretary of State Blinken was updated about a "precise" Rafah operation, according to Bloomberg.
Hamas armed wing lost contact with gunmen in charge of guarding four Israeli hostages.
White House National Security Advisor Sullivan said he cannot predict when or if a deal will come on a ceasefire and expects in-person meetings with Israeli officials to take place in a matter of days, not weeks. Furthermore, he said negotiations have bumps and variables but added that a ceasefire is possible tomorrow if Hamas releases elderly hostages and women.
US-British craft reportedly launched a raid on Hodeidah Airport, Yemen, according to AJ Breaking.

NOTABLE HEADLINES

China's Premier Li said they will better coordinate government investment and social capital, according to state media.
China's Foreign Minister Wang said in a meeting with his South Korean counterpart that China-South Korea ties have recently faced difficulties and challenges which are not in the interest of both sides.
Chinese regulators told local tech firms to buy fewer Nvidia (NVDA) chips, according to The Information.
US and China are to meet in Geneva on May 14th to discuss risks of advanced AI intelligence, while protection policies are not up for negotiation in AI talks with China.
US Treasury Secretary Yellen is hopeful that China will see that US actions on tariffs are targeted and will see what happens, while she responded that will ensure counterparts are informed when asked if she will inform China ahead of any US tariff action. Furthermore, she said China is pursuing a conscious industrial policy targeting investment in advanced manufacturing and that virtually all Chinese investment that had been going into the property sector is now going into advanced manufacturing.

NOTABLE HEADLINES

ECB's Buch (Supervisory) said it is crucial to establish the 3rd pillar of the banking union and European deposit insurance scheme.
Dutch political parties are reportedly planning to scrap the 15% tax on share buybacks, according to Bloomberg.