Weekend News Round Up - Newsquawk Asia-Pac Market Open

• US stocks were firmer on Friday after gradually reversing the kneejerk losses from the huge 353k new jobs reported in the January BLS report that ignited a broad hawkish reaction which saw the Dollar surge and Treasuries unwind their WTD gains in a big bear-flattener, although curve spreads recovered off lows into the afternoon ahead of upcoming Treasury auctions and corporate supply expectations.

• US and UK carried out strikes against 36 Houthi targets which included missile systems, launchers, air defence systems, radar and buried weapons storage facilities, while the UK government said this was not an escalation, according to Reuters.

• Looking ahead, highlights include Australian MI Inflation Gauge & Trade Data, Japanese Services & Composite PMIs, Chinese Caixin Services & Composite PMIs, Singapore Retail Sales, Comments from Fed Chair Powell, Supply from Japan.

More Newsquawk in 2 steps:

1. Subscribe to the free premarket movers reports

2. Trial Newsquawk’s premium real-time audio news squawk box for 7 days

LOOKING AHEAD

• Highlights include Australian MI Inflation Gauge & Trade Data, Japanese Services & Composite PMIs, Chinese Caixin Services & Composite PMIs, Singapore Retail Sales, Comments from Fed Chair Powell, Supply from Japan.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US stocks were firmer Friday after gradually reversing the kneejerk losses from the huge 353k new jobs reported in the January BLS report that ignited a broad hawkish reaction which saw the Dollar surge and Treasuries unwind their WTD gains in a big bear-flattener, although curve spreads recovered off lows into the afternoon ahead of upcoming Treasury auctions and corporate supply expectations.
• SPX +1.07% at 4,958, NDX +1.72% at 17,642, DJIA +0.35% at 38,654, RUT -0.59% at 1,962.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed’s Bowman (voter) said on Friday that she expects inflation to decline further with the policy rate held steady and it will eventually become appropriate to gradually cut rates if inflation continues to decline. Bowman also stated that upside risks to inflation include labour market tightness, easing financial conditions and geopolitics, while she will remain cautious on policy and watchful on data and revisions. Furthermore, she said reducing the policy rate too soon could mean more hikes will be needed in the future and she remains willing to raise the policy rate at a future meeting if needed, according to Reuters.
• Fed's Goolsbee (non-voter) said on Friday that the January jobs headline number was breathtaking but may not be as strong as it looks and inflation has been coming in better than expected although he doesn’t like tying their hands regarding the timing of rate cuts with weeks and months of data ahead. Furthermore, he said more and more progress like what they’ve seen on inflation and jobs is what they need to see to feel comfortable they are on target, according to an interview with PBS NewsHour.

DATA RECAP

• US Non-Farm Payrolls (Jan) 353k vs. Exp. 180k (Prev. 216k, Rev. 333k)
• US Unemployment Rate (Jan) 3.7% vs. Exp. 3.8% (Prev. 3.7%
• US Average Earnings YY (Jan) 4.5% vs. Exp. 4.1% (Prev. 4.1%, Rev. 4.4%)
• US Factory Orders MM (Dec) 0.2% vs. Exp. 0.2% (Prev. 2.6%)

FX

• CBRT appointed Fatih Karahan as its new governor, while Karahan said the main priority is to achieve price stability and he is determined to maintain tight monetary control until inflation hits the target. Furthermore, CBRT announced it will introduce interest payments for Turkish Lira required reserves, according to Reuters.

COMMODITIES

• Two Ukrainian drones hit a primary oil processing facility at the Volgograd oil refinery in southern Russia.

GEOPOLITICAL

• US and UK carried out strikes against 36 Houthi targets which included missile systems, launchers, air defence systems, radar and buried weapons storage facilities, while the UK government said this was not an escalation, according to Reuters.
• Yemen’s Houthi spokesperson said the continuation of US-British aggression will not achieve any goal for the aggressors and Yemen’s decision to support Gaza will not be affected by the attacks, while the spokesperson added that Yemeni military capabilities are not easily destroyed and were rebuilt during years of tough war, according to Reuters.
• White House’s Kirby said strikes on Friday against Iran-backed groups were just the first round of action and more action will follow, according to an interview with Fox News.
• US National Security Adviser Sullivan said there will be more steps in the US response to the drone strike in Jordan and that the US would not describe it as an open-ended military campaign but added that if the US continues to see threats and attacks, they will respond to them. Sullivan also stated that Gaza humanitarian issues will be the top priority for Secretary of State Blinken on this trip and that the ball is in Hamas’ court on the hostage proposal, according to Reuters.
• Iraqi military spokesperson said US air strikes constitute a violation of Iraqi sovereignty and pose a threat that could lead Iraq and the region into dire consequences. It was also reported that the Iraqi PM denied the US had coordinated air strikes with the Iraq government and called those claims lies, while the Iraqi PM said 16 were killed including civilians and 25 were wounded in the US aggression against Iraq’s sovereignty. Furthermore, Iraq’s Foreign Ministry summoned the US Charge D’Affaires to Baghdad and handed a note of protest against US attacks in Iraq, according to Reuters.
• Iran strongly condemned the US military strikes which it said were violations of the sovereignty and territorial integrity of Iraq and Syria, while it added that US attacks represent another adventurous and strategic mistake by the US that will result only in increased tension in instability in the region. Syria’s Foreign Ministry also condemned the US attack on Syrian territory and stated that the US is fuelling conflict in the region in a very dangerous way.
• Israeli army said its warplanes bombed an operational headquarters and military infrastructure of Hezbollah in the area of the village of Yaron and they also targeted a Hezbollah observation point in the village of Maroun al-Ras in southern Lebanon, according to Al Jazeera.
• US House appropriations panel offered legislation for USD 17.6bln in new military assistance for Israel.
• Ukrainian President Zelensky said he was considering replacing several officials including state leaders and in the military.
• G7 countries are reportedly drawing up plans to issue debt to help fund Ukraine using Russian assets as a backstop for the repayment, according to FT.
• South Korea summoned the Russian envoy over Moscow’s comment criticising President Yoon’s remarks on North Korea.

ASIA-PAC

NOTABLE HEADLINES

• PBoC injected CNY 43bln via 14-day reverse repos with the rate kept at 1.95% on Sunday.
• Indonesia Central Bank Governor Warjiyo said there should be room to cut rates, but they are waiting for the IDR to strengthen and stated that Indonesia’s economy is in an upward cycle with a peak seen in 2026.

EU/UK

NOTABLE HEADLINES

• UK seeks to end the Northern Ireland impasse and unveiled a plan to reduce trade friction on goods flowing from Great Britain to Northern Ireland, according to Bloomberg.
• Sinn Fein’s Michelle O’Neil was formally appointed as Northern Ireland's First Minister to become the first Irish nationalist to hold the post, according to Reuters.
• ECB’s Elderson said that they see a lot is going well for banks in the area of climate risks even if no single bank has currently met all expectations.
• ECB's Vujcic said patience is needed and need to ensure there aren’t any second-round effects on inflation from wages before cutting interest rates, according to Bloomberg.