US stocks reversed early weakness and the S&P 500 posted a fresh record close - Newsquawk Asia-Pac Market Open

• US stocks were ultimately firmer after the initial tech-led weakness gradually reversed throughout the session with NVIDIA (NVDA) gaining more than 1% due to some positive takeaways from its GTC event despite the lack of major surprises, while energy was the biggest gaining sector after further upside in oil prices amid simmering geopolitical risks and the S&P 500 notched a fresh record close.
• USD was underpinned and the DXY briefly reclaimed the 104.00 alongside advances in USD/JPY post-BoJ. Today's data highlight was the softer-than-expected Canadian CPI figures amid a light US data calendar although Housing Starts and Building Approvals topped forecasts, while attention now turns to Wednesday's FOMC announcement and the latest dot plot projections.
• Looking ahead, highlights include PBoC Loan Prime Rates, Supply from Australia, Holiday in Japan.

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LOOKING AHEAD

• Highlights include PBoC Loan Prime Rates, Supply from Australia, Holiday in Japan.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US stocks were ultimately firmer after the initial tech-led weakness gradually reversed throughout the session with NVIDIA (NVDA) gaining more than 1% due to some positive takeaways from its GTC event despite the lack of major surprises, while energy was the biggest gaining sector after further upside in oil prices amid simmering geopolitical risks and the S&P 500 notched a fresh record close.
• SPX +0.56% at 5,179, NDX +0.26% at 18,032, DJI +0.83% at 39,111, RUT +0.54% at 2,036.
• Click here for a detailed summary.

NOTABLE HEADLINES

• WSJ's Timiraos said Fed officials have a bias to cut rates but need a credible justification to get started, while he added that officials won’t put recession risk front and centre this week although that risk is likely to drive its thinking over the remainder of the year. Furthermore, he stated a resumption of falling inflation would provide that justification which makes price data in the next month especially crucial.
• US congressional leaders and the White House have struck an agreement to finish the final set of FY appropriations, according to Senate Majority Leader.
• Airline group said US airline passenger travel will increase 6% Y/Y and set a record for March and April.

DATA RECAP

• US Housing Starts Number (Feb) 1.521M vs. Exp. 1.425M (Prev. 1.331M, Rev. 1.374M)
• US Building Permits Number (Feb) 1.518M vs. Exp. 1.495M (Prev. 1.489M)

FX

• USD was underpinned and the DXY briefly reclaimed the 104.00 alongside advances in USD/JPY post-BoJ. Today's data highlight was the softer-than-expected Canadian CPI figures amid a light US data calendar although Housing Starts and Building Approvals topped forecasts, while attention now turns to Wednesday's FOMC announcement and the latest dot plot projections.
• EUR marginally weakened but with downside limited after a stronger-than-expected ZEW survey.
• GBP was only slightly softer on the day after clawing back the losses from an initial dip beneath 1.2700.
• JPY remained pressured with USD/JPY approaching closer to the 151.00 status after the BoJ dovish and widely-telegraphed exit from NIRP, YCC and ETF buying.
• Canadian CPI Inflation YY (Feb) 2.8% vs. Exp. 3.1% (Prev. 2.9%)
• BoC Core Measures Average CPI (Feb) 3.13% (Prev. 3.37%, Rev. 3.33%)

FIXED INCOME

• Treasuries were led higher by the front-end and belly amid soft Canadian CPI data and ahead of FOMC, while the long-end lagged despite a solid 20yr auction.

COMMODITIES

• Oil prices extended on their gains with simmering geopolitics in the background.
• US Energy Inventory Data (bbls): Crude -1.5mln (exp. +0.0mln), Gasoline -1.6mln (exp. -1.4mln), Distillate +0.5mln (exp. -0.1mln), Cushing +0.3mln.
• Russian oil loadings from its Western Ports were revised up again to 2.22mln BPD amid unplanned refinery outages, while Russian oil loadings plan from Western ports are seen 13% higher than the initial version, according to sources cited by Reuters.
• Russian Energy Minister said there are plans to defend oil and gas facilities with a missile system.
• London Metal Exchange intends to list Jeddah as a new delivery point for copper and zinc, subject to consultation of one technical change to the LME's warehouse location framework.

GEOPOLITICAL

MIDDLE EAST

• Qatari Foreign Ministry spokesman said it is still too early to talk about any breakthrough in negotiations but they are optimistic about that, according to Al Jazeera.

OTHER

• France is preparing to send a contingent of about 2,000 military personnel to Ukraine, according to the Russian intelligence chief cited by TASS. Russia’s spy chief also commented that the French military unit in Ukraine will be a priority target for Russia.
• German Defence Minister said no boots on the ground in Ukraine and there is nothing to add at this time on that, while they have no doubts about the reliability of the US.
• US Defence Secretary Austin said Ukraine's survival is in danger.
• Russian President Putin said Russia must increase combat readiness of border guard forces including at sea and the FSB needs to support companies that face sanctions and hostile actions. Furthermore, he stated that authorities of some countries and intelligence services are behind hostile actions against Russian companies, according to RIA.

ASIA-PAC

NOTABLE HEADLINES

• BoJ Governor Ueda said the BoJ has confirmed the virtuous cycle of wages and prices and that accommodative financial conditions will be maintained for the time being, while they will consider options for easing broadly including ones used in the past if needed and will continue buying "broadly" the same amount of JGBs as before. Ueda said they will use the short-term policy rate as the main tool and it is important to keep an easy environment in place considering the distance to the 2% target in terms of inflation expectations, while he added the pace of further hikes depends on the economy and price outlooks, as well as noted that they will not use JGB buying operations and balance adjustments as a proactive monetary policy tool.
• South Korean Finance Minister Choi said they will cut corporate and dividend income tax in order to encourage a higher shareholder return.
• Kering (KER FP) said Gucci comp revenues in Q1 are expected to be down nearly 20% Y/Y and expect group revenue to be down 10% Y/Y, while it noted specific weakness in Asia-Pacific.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Hunt said there would be impacts from a decision to change paying interest on reserves at the BoE and it is not something the government is currently considering.
• ECB's Kazaks said he is comfortable with the current market pricing on rates and moving at forecast meetings is "more straightforward", while he added it will take some time to get to a neutral rate.
• ECB insiders said data yet to be made available is needed to determine the frequency of rate easing after the first move in June but the magnitude (i.e. 25bps) is a given in the absence of a major surprise.
• German Finance Minister Lindner said they should lift the German supply chain law now due to European supply chain rules.
• German ZEW said economic expectations for Germany are significantly improving and more than 80% of those surveyed anticipate that the ECB will cut interest rates in the next 6 months which could explain the more optimistic outlook for the German construction industry. However, it stated the assessment of the economic situation remains at a very low level and this development somewhat diminishes the increased economic expectations.

DATA RECAP

• EU ZEW Survey Expectations (Mar) 33.5 (Prev. 25.0)
• German ZEW Economic Sentiment (Mar) 31.7 vs. Exp. 20.5 (Prev. 19.9)
• German ZEW Current Conditions (Mar) -80.5 vs. Exp. -82.0 (Prev. -81.7)