US stocks rallied on Nvidia wave - Newsquawk Asia-Pac Market Open

• US stocks surged with firm gains seen across the major after Nvidia's (NVDA) solid earnings and guidance propelled tech and the broader stock market, while NVDA itself saw a record performance with gains of over 16% to add USD 277bln to its value.
• USD was ultimately flat after paring the initial losses seen in the European session and as participants digested mostly encouraging data releases including better-than-expected manufacturing PMI and a fall in jobless claims, while there were several Fed comments which warned against cutting rates too soon.
• Looking ahead, highlights include New Zealand Retail Sales, UK GfK Consumer Confidence, Chinese House Prices, Singapore CPI, Comments from Fed's Cook, Kashkari & Waller, Japanese Market Closure for the Emperor's Birthday.

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LOOKING AHEAD

• Highlights include New Zealand Retail Sales, UK GfK Consumer Confidence, Chinese House Prices, Singapore CPI, Comments from Fed's Cook, Kashkari & Waller, Japanese Market Closure for the Emperor's Birthday.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US stocks surged with firm gains seen across the major after Nvidia's (NVDA) solid earnings and guidance propelled tech and the broader stock market, while NVDA itself saw a record performance with gains of over 16% to add USD 277bln to its value.
• SPX +2.11% at 5,087, NDX +3.01% at 18,005, DJI +1.18% at 39,069, RUT +0.96% at 2,014.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed’s Jefferson (voter) said it is likely to be appropriate to begin cutting rates later this year and that January CPI data was 'disappointing' and showed the path down is likely to be bumpy. Jefferson added that progress on inflation reflects supply and demand factors, as well as policy tightness although he remains cautiously optimistic about progress on inflation and will review the totality of the data in assessing policy.
• Fed's Harker (non-voter) said the Fed may be near the point of cutting rates but is unsure of when it will happen, and the greatest risk is that the Fed cuts rates too early. Harker also said he still wants more confidence that inflation is moving back to 2% and expects bumpy progress on inflation. Furthermore, Harker said the Fed can hold on rates for now and is in no rush to cut, while he added that a May rate cut is possible and will not take it off the table but it is not his current forecast.

DATA RECAP

• US S&P Global Manufacturing PMI Flash (Feb) 51.5 vs. Exp. 50.5 (Prev. 50.7)
• US S&P Global Services PMI Flash (Feb) 51.3 vs. Exp. 52.0 (Prev. 52.5)
• US S&P Global Composite Flash PMI (Feb) 51.4 (Prev. 52.0)
• US Existing Home Sales (Jan) 4.0M vs. Exp. 3.97M (Prev. 3.78M, Rev. 3.88M)
• US Existing Home Sales % Change (Jan) 3.1% (Prev. -1.0%, Rev. -0.8%)
• US Initial Jobless Claims w/e 201.0k vs. Exp. 218.0k (Prev. 212.0k, Rev. 213k)
• US Continued Jobless Claims w/e 1.862M vs. Exp. 1.885M (Prev. 1.895M, Rev. 1.889M)

FX

• USD was ultimately flat after paring the initial losses seen in the European session and as participants digested mostly encouraging data releases including better-than-expected manufacturing PMI and a fall in jobless claims, while there were several Fed comments which warned against cutting rates too soon.
• EUR returned to flat territory amid mixed PMI data from the bloc and an uneventful ECB minutes release.
• GBP was underpinned and GBP/USD briefly reclaimed the 1.2700 handle with help from stronger-than-expected Services PMI data, although gradually pared the majority of the gains as the dollar rebounded on data.
• JPY reversed initial gains with early pressure in USD/JPY alleviated as support held near 150.00.
• CBRT maintained its Weekly Repo rate at 45%, as expected, while it reiterated the current level of the policy rate will be maintained until there is a significant and sustained decline in the underlying trend of monthly inflation.

FIXED INCOME

• Treasuries saw pronounced flattening on Thursday amid a fall in jobless claims and mixed PMI data ahead of the front-loaded auctions next week.

COMMODITIES

• Oil prices were ultimately firmer after reversing initial losses with prices supported by Red Sea escalation and surging stocks.
• US EIA Weekly Crude Stocks 3.5M vs. Exp. 3.5M (Prev. 12.0M)
• Russia's daily oil export from its Western Ports may decline 6% in March amid higher refinery runs, according to Reuters citing sources.
• Austria, Czech Republic, Hungary and Slovakia warned they could be forced into increasing Russian gas imports due to German levy on supplies from German storage tanks, according to FT.
• UK Foreign Office is to target individual "shadow fleet" vessels used by Russia to circumvent and cushion oil-related sanctions.

GEOPOLITICAL

MIDDLE EAST

• Israel's army radio said the Israeli Cabinet approved sending negotiators to Gaza truce talks in Paris. It was earlier reported that Israeli Defence Minister Gallant told White House Middle East official McGurk that the Israeli War Cabinet will give Israeli negotiators a broader mandate in order to make progress in the hostage talks, according to Axios' Ravid.
• US envoy to Israel said progress has been made in talks with Hamas and urged Israel to send a delegation to France to conduct negotiations, according to Walla's Ravid.
• US military said it shot down six Houthi drones in the Red Sea.
• Yemen's Houthi said they will ban ships wholly or partially owned by Israeli individuals, entities or Israel-flagged from the Red Sea, Gulf of Aden and Arabian Sea, while they will also ban ships owned by US and British individuals or entities or those sailing under their flags.
• Yemen's Houthis said operations within the Red Sea are continuing and looking to escalate, while they have introduced "submarine weapons" within sea operations.
• Yemen's Houthis said they targeted an islander ship in the Gulf of Aden and launched ballistic missiles and drones towards Israeli's Eilat, while it also targeted an American destroyer in the Red Sea with numerous drones.
• White House's Kirby said they have not seen confirmation that missiles have moved from Iran to Russia, while he warned there will be a severe response including sanctions if Iran moves ahead on missiles to Russia and there will be additional sanctions in the coming days.

OTHER

• US officials have warned Russia not to deploy nuclear-armed space weapons, according to WSJ.
• US DoJ announced enforcement actions in five separate federal cases against sanctioned oligarchs and networks supporting Russia, while the actions include charges against Russian state-owned VTB Bank's CEO Kostin and two of his US-based facilitators.
• US diplomat Nuland said "hundreds and hundreds and hundreds" of sanctions are to be imposed on Russia in response to Navalny's death, while sanctions will target those responsible for Navalny's death, but most will target Putin's "war machine" and close the gap in the existing sanctions regime.

ASIA-PAC

NOTABLE HEADLINES

• China Securities Regulatory Commission said regulators do not interfere with normal market transactions and will crack down on any disrupting market trading orders, while it added that Shanghai and Shenzhen exchanges did not limit share selling. China Daily also reported that the CSRC denied foreign media reports that regulatory measures have been taken to restrict legitimate transactions of unloading shares and short selling.
• China has reportedly turned to private firms to hack an array of foreign governments and organisations, while files indicate China infiltrated the cyberinfrastructure and collected data of government departments in Malaysia, Thailand and Mongolia, according to FT citing a large data leak from Shanghai Anxun Information Technology.
• US export curbs on China won't extend to legacy chips which generally refers to 28-nanometer and older-generation semiconductors, according to US official cited by Nikkei.
• US lawmakers urged Volkswagen (VOW3 GY) to halt operations in Xinjiang after vehicles with Chinese components were held at US customs.

EU/UK

NOTABLE HEADLINES

• BoE's Greene said the tick-up in PMI data offers some grounds for optimism on growth in 2024 and wage growth is heading in the right direction, while services inflation generally started to ease. Furthermore, Greene said she needs to see more evidence that UK inflation is not entrenched before she votes for a cut.
• ECB Minutes noted the latest developments in economic activity and inflation as being consistent with the current monetary policy stance, while all members agreed with the proposal by Chief Economist Lane to maintain the three key ECB interest rates at their current levels. Furthermore, there was broad consensus among members that it was premature to discuss rate cuts at the present.
• German government coalition may agree to suspend the debt brake for defence spending in efforts to address the Constitutional Court ruling, according to Eurasia Group's Mujtaba Rahman.

DATA RECAP

• UK Flash Manufacturing PMI (Feb) 47.1 vs. Exp. 47.5 (Prev. 47.0)
• UK Flash Services PMI (Feb) 54.3 vs. Exp. 54.1 (Prev. 54.3)
• UK Flash Composite PMI (Feb) 53.3 vs. Exp. 52.9 (Prev. 52.9)
• German HCOB Manufacturing Flash PMI (Feb) 42.3 vs. Exp. 46.1 (Prev. 45.5)
• German HCOB Services Flash PMI (Feb) 48.2 vs. Exp. 48.0 (Prev. 47.7)
• German HCOB Composite Flash PMI (Feb) 46.1 vs. Exp. 47.5 (Prev. 47.0)
• EU HCOB Manufacturing Flash PMI (Feb) 46.1 vs. Exp. 47.0 (Prev. 46.6)
• EU HCOB Services Flash PMI (Feb) 50.0 vs. Exp. 48.8 (Prev. 48.4)
• EU HCOB Composite Flash PMI (Feb) 48.9 vs. Exp. 48.5 (Prev. 47.9)
• EU HICP Final MM (Jan) -0.4% vs. Exp. -0.4% (Prev. 0.2%)
• EU HICP Final YY (Jan) 2.8% vs. Exp. 2.8% (Prev. 2.8%)