Equities bid & DXY weaker as risk appetite returns; NY SCE and Fed speak due - Newsquawk US Market Open

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Tuesday, Oct 10, 2023 - 10:22 AM
  • European bourses trade on the front-foot in a catch-up play to the afternoon gains on Wall Street; US futures are trading slightly firmer, continuing to extend on gains seen in yesterday’s session.
  • Dollar pulls back under 106.00 as risk appetite picks up, JPY underperforms with USD/JPY hovering around 149.00; Bonds futures settle down after Monday's Middle East safety flight.
  • China reportedly weighs new stimulus and higher deficit to meet growth target, according to Bloomberg sources. 
  • IMF World Economic Outlook cut 2023 and 2024 GDP growth forecasts for China and EZ whilst maintaining the US forecasts. 
  • Looking ahead, highlights include Wholesale Inventory & Sales, NY Fed Survey of Consumer Expectations, ECB's Lagarde, Fed’s Bostic, Waller, Kashkari & Daly, Supply from the US. 

10th October 2023

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  • European bourses trade on the front-foot in a catch-up play to the afternoon gains on Wall Street which were brought about by dovish-leaning Fed rhetoric.
  • Sectors in Europe are firmer across the board to varying degrees with Energy still the laggard while Basic Resources outperform following the aforementioned China sources; Real Estate names are cheering the pullback in yield whilst Travel & Leisure stocks are being granted some reprieve from yesterday’s selling pressure.
  • US futures are trading slightly firmer, continuing to extend on gains seen in yesterday’s session.
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  • Dollar depressed as risk appetite picks up and Fed VC Jefferson echoes sentiments about the tightening impact of higher yields, with DXY losing grasp of the 106.000 handle within a 106.250-105.760 range.
  • Euro bounces firmly to probe 1.0600 vs Buck having survived a test of the big figure below at the height of risk aversion.
  • Pound breaches semi-psychological resistance at 1.2250 against Greenback, Franc extends its rebound through 0.9050 and Aussie regains 0.6400+ status amidst reports of more Chinese stimulus.
  • Yen underperforms as Japanese participants return from holiday and buy USD/JPY from the low 148.00 area for the Tokyo fix.
  • Norwegian Crown down in wake of cooler than forecast CPI metrics, with EUR/NOK eyeing 11.5000 from sub-11.3850
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  • Bonds futures settle down after Monday's Middle East safety flight.
  • Bunds dangle within a 128.97-47 range alongside T-note between 107-16/30+ parameters, but Gilts stay afloat after peaking at 93.81 and retreating to 93.39.
  • UK sold GBP 900mln 0.125% 2039 I/L Gilt: b/c 3.17x prev. (2.62x) & real yield 1.265% (prev. 0.986%)
  • Germany sold EUR 464mln vs exp. EUR 600mln 0.10% 2033 I/L and 0.10% 2046 I/L Bund: 2033: b/c 1.47x (prev. 2.1x) & real yield 0.42% (prev. 0.19%), 2046: b/c 1.14x (prev. 1.1x) & real yield 0.56% (prev. 0.21%)
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  • Crude front-month futures are choppy but briefly tilted firmer on the back of source reports that China is mulling new stimulus and higher deficit to meet growth target, although the upside was short-lived whilst IMF cut growth forecasts for China and the EZ.
  • Dutch TTF prices continue to grind higher with desks citing tailwinds from the crude complex coupled with the revived Australian LNG strikes at Chevron facilities in the run-up to the winter heating season.
  • Spot gold is flat/tilting lower after Monday’s risk premium led to intraday gains of almost USD 30/oz in the yellow metal. Spot gold remains north of USD 1,850/oz.
  • OPEC Secretary General said they are not too worried about China in the medium-to-long term, according to Reuters.
  • China's largest copper buyers expect to pay a premium of around USD 90/t for Codelco's copper, according to Reuters sources.
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  • ECB's Villeroy said interest rates are now on a good level, at this stage further rate hikes are not the right thing to do; adds the Israel situation is no reason for us to tweak inflation prospects for now, and still sees inflation at around 2% by 2025, according to Reuters.
  • ECB's Holzmann said higher bond yields send a similar message to hikes. “If additional shocks come, and if the information we have proves to be incorrect, we may have to hike another time or perhaps two times", according to CNBC.
  • EU is planning an anti-subsidy probe into Chinese steelmakers, according to FT.
  • Kantar UK Supermarket update: Grocery inflation cools again as shoppers seek value during sunny September.
  • BoE Financial Policy Summary and Record: maintains CCyB rates at 2%; some members suggested increasing the rate to build resilience, the case for lowering was also discussed.


  • UK BRC Retail Sales YY (Sep) 2.8% (Prev. 4.3%)
  • UK BRC Total Sales YY (Sep) 2.7% (Prev. 4.1%)
  • UK Barclaycard Consumer Spending YY (Sep) 4.2% (Prev. 2.8%)


  • US President Biden was voluntarily interviewed as part of the classified documents investigation being led by Special Counsel Robert Hur, according to the White House.
  • Honeywell (HON) is to realign its portfolio to three powerful megatrends; automation, future of aviation and energy transition. Expects strong Q3 results - in line with previous guidance for sale and segment margin.
  • Click here for the US Early Morning Note.


  • US Pentagon said Chairman of Joint Chiefs of Staff Brown spoke with Israeli counterpart Halevi and discussed steps to strengthen US military posture in the region and bolster deterrence efforts. It was also reported that General Brown said the message to Iran is not to get involved in the crisis in Israel and he does not want the conflict to broaden.
  • White House joint statement from the US, UK, France, Italy and Germany states their countries will support Israel in its efforts to defend itself, while they will remain united and coordinated to ensure Israel is able to defend itself, according to Reuters.
  • UAE warned the Assad regime in Syria not to intervene in the Hamas-Israel war or to allow attacks on Israel from Syrian soil, according to Axios citing two sources briefed on the Emirati diplomatic effort.
  • Senior UN official met with Russian officials in Moscow to discuss Russian and Ukrainian food and fertiliser exports, while talks are aimed at facilitating unimpeded access to global markets for food and fertilisers from Russia and Ukraine.
  • North Korean state media said an important report is coming up but didn't provide details, while an official said the military spy satellite is an indispensable option to counter the US, according to Yonhap.
  • China's Coast Guard said a Philippines navy boat illegally intruded into waters around the Scarborough Shoal and it took measures to drive away the Philippines vessel, according to Reuters.
  • Russian Deputy Foreign Minister says would only resume nuclear testing if and after the US was to do the same, according to Interfax, and says they have seen signs that the US is making preparations for nuclear testing in Nevada, according to Reuters.


  • Bitcoin was little changed with price action choppy but remained above the USD 27,500 level.


  • IMF World Economic Outlook: global real GDP seen at 3.0% in 2023 (same as July), 2024 cut to 2.9% from 3.0%. Global inflation is forecast to decline steadily, from 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024, due to tighter monetary policy aided by lower international commodity prices. Core inflation is generally projected to decline more gradually, and inflation is not expected to return to target until 2025 in most cases. Click here for more details.


  • APAC stocks were mostly positive as key markets reopened from the long weekend and following the recovery seen on Wall Street owing to a bout of dovish-leaning Fed commentary.
  • ASX 200 was lifted as utilities and tech led the broad-based gains across sectors and with the index unfazed by the mixed consumer and business confidence data releases.
  • Nikkei 225 outperformed on return from holiday and got its first opportunity to react to the key market themes including last week’s US jobs data, the Israel-Hamas conflict and recent Fed rhetoric.
  • KOSPI gained with chipmakers boosted after reports that Samsung Electronics and SK Hynix will be allowed to supply US chip equipment to their China factories indefinitely without separate US approvals.
  • Hang Seng and Shanghai Comp. were mixed with Hong Kong lifted by strength in tech and property, while the mainland lagged amid underwhelming holiday spending and lingering debt concerns after Country Garden flagged it would not be able to meet all offshore obligations.


  • China reportedly weighs new stimulus and higher deficit to meet growth target, according to Bloomberg sources. Policymakers are weighing the issuance of at least CNH 1tln (USD 137bln) of additional sovereign debt for spending on infrastructure. Could raise this year’s budget deficit to "well above" the 3% cap set in March sources added. An announcement could come as early as this month, but talks are ongoing and plans can change.
  • PBoC set USD/CNY mid-point at 7.1781 vs exp. 7.2758 (prev. 7.1789).
  • China's Commerce Minister Wang said in talks with the delegation of US senators that the US-China economic and trade relationship is very important to the two countries and China will not avoid competition but it should be fair and based on international rules. Wang said both sides had rational and pragmatic discussions and China hopes the US is to specify the boundaries of security accurately, as well as avoid politicising and generalising security issues, according to Reuters.
  • Country Garden (2007 HK) said it took various measures to alleviate liquidity pressure to minimise the impact on project construction and operations, while its liquidity position is expected to remain very tight in the short to medium term. Co. also said it had not made a due payment in the principal amount of HKD 470mln under certain of its indebtedness and expects that it will not be able to meet all offshore obligations when due or within relevant grace periods.
  • BoJ is reportedly mulling raising its FY23/24 core CPI target to near 3% from 2.5% forecast in July, according to Kyodo


  • Australian Westpac Consumer Confidence Index (Oct) 82.0 (Prev. 79.7)
  • Australian Westpac Consumer Confidence M/M (Oct) 2.9% (Prev. -1.5%)
  • Australian NAB Business Confidence (Sep) 1 (Prev. 2)
  • Australian NAB Business Conditions (Sep) 11 (Prev. 13)