The equity bid continued on Wednesday, once again supported by cool US economic data - Newsquawk Asia-Pac Market Open

The equity bid continued on Wednesday, once again supported by cool US economic data after the Q1 GDP 2nd estimate was revised lower and as the ADP missed expectations, although the prior was revised up.
The Dollar was lower on Wednesday, printing a low of 102.920 after a bout of pressure from disappointing US data; the Treasury curve bounced from lows.
The crude complex was choppy on Wednesday, as participants digest the latest Hurricane updates, further US data, and a much larger-than-expected EIA crude draw, albeit not as large as the private inventory report.
US President Biden reportedly blocks sale of Nvidia (NVDA) AI chips to Middle East over China fears, according to Telegraph.
Looking ahead, highlights include South Korean Industrial Output, Japanese Industrial Output, Retail Sales, NZ Business Outlook, Australian CapEx, Chinese Official PMIs, Japanese Construction Orders.

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31st August 2023

US TRADE

The equity bid continued on Wednesday, once again supported by cool US economic data after the Q1 GDP 2nd estimate was revised lower and as the ADP missed expectations, although the prior was revised up.
SPX +0.38% at 4,514, NDX +0.56% at 15,462, DJIA +0.11% at 34,890, RUT +0.40% at 1,903.
Click here for a detailed summary.

NOTABLE HEADLINES

Apple (AAPL) tests using 3D printers to make devices in major shift, according to BloombergNew approach will use less material and be more eco-friendly and is trying out the process with steel Apple Watches.
Fed ramps up demand for corrective actions by regional banks, according to Bloomberg; Fed issued private warnings to Citizens Financial (CFG), Fifth Third Bancorp (FITB) and M&T Bank (MTB).

DATA RECAP

US ADP National Employment (Aug 2023) 177.0k vs. Exp. 195.0k (Prev. 324.0k, Rev. 371k)
US GDP 2nd Estimate* (Q2 2023) 2.1% vs. Exp. 2.4% (Prev. 2.4%)
US Adv Goods Trade Balance * (Jul 2023) -91.18B (Prev. -88.83B)
US Wholesale Inventories Adv * (Jul 2023) -0.1% (Prev. -0.5%)
US Retail Inventories Ex-Auto Adv * (Jul 2023) 0.1% (Prev. 0.3%)
US Corporate Profits Prelim* (Q2 2023) 1.6% vs. Exp. -5.9% (Prev. -5.9%)
US GDP Deflator Prelim* (Q2 2023) 2.0% vs. Exp. 2.2% (Prev. 2.2%)
US GDP Sales Prelim* (Q2 2023) 2.2% vs. Exp. 2.3% (Prev. 2.3%)
US GDP Cons Spending Prelim* (Q2 2023) 1.7% (Prev. 1.6%)
US PCE Prices Prelim * (Q2 2023) 2.5% vs. Exp. 2.6% (Prev. 2.6%)
US Core PCE Prices Prelim* (Q2 2023) 3.7% vs. Exp. 3.8% (Prev. 3.8%)
US Mortgage Refinance Index (W 25 Aug) w/e 407.1 (Prev. 397.1)
US MBA Purchase Index (W 25 Aug) w/e 144.9 (Prev. 142.0)
US MBA 30-Yr Mortgage Rate (W 25 Aug) w/e 7.31% (Prev. 7.31%)

The Dollar was lower on Wednesday, printing a low of 102.920 after a bout of pressure from disappointing US data.
EUR and GBP were the G10 outperformers, with the single-currency seeing a boost in the European morning on a hawkish reaction after German North Rhine-Westphalia State CPI rose for both M/M and Y/Y.
CAD, CHF, AUD, and NZD were all flat vs. the Buck. Firstly, the Aussie overcame bearish and dovish data.
JPY was the G10 underperformer, with USD/JPY hitting a high of 146.56 vs. a low of 145.57 in tandem with whippy US Treasury yields and underpinned by particularly hefty option expiry interest at 145.50 (2.8bln).
EMFX was mixed. Yuan, TRY, ZAR, BRL were all lower, whilst RUB, MXN saw gains. For the Yuan, another raft of support measures from China designed to prop up the property sector and revive the overall economy, but the Yuan remained cautious regardless of general Dollar weakness awaiting Chinese PMIs.
Banxico raised 2023 GDP growth forecast to 3.0% (prev. 2.3%), 2024 growth forecast raised to 2.1% (prev. 1.6%).

The Treasury curve bounced from lows after more dovish data following a miss in ADP and the 2nd estimate of Q1 GDP as eyes turn to PCE and NFP.

The crude complex was choppy on Wednesday, as participants digest the latest Hurricane updates, further US data, and a much larger-than-expected EIA crude draw, albeit not as large as the private inventory report Tuesday night implied, with one eye monitoring developments in OPEC-member Gabon regarding the military coup.
Russian Deputy PM Novak said Russia will cut oil exports in September by 300k BPD vs June, via Ifax; Russia does not rule out extending global output supply cut for October; but says it's earlier to talk about October, via Tass.
NHC said Hurricane Idalia made landfall in Florida.

DATA RECAP

US EIA Wkly Crude Stk* (W 25 Aug) w/e -10.584M vs. Exp. -3.0M (Prev. -6.135M)
US EIA Wkly Refn Util* (W 25 Aug) w/e -1.2% vs. Exp. -0.3% (Prev. -0.2%)
US EIA Wkly Gsln Stk* (W 25 Aug) w/e -0.214M vs. Exp. -1.2M (Prev. 1.467M)
US EIA Wkly Dist. Stk* (W 25 Aug) w/e 1.235M vs. Exp. 0.338M (Prev. 0.945M)
US EIA Wkly Crude Cushing* (W 25 Aug) w/e -1.504M (Prev. -3.133M)
EIA Production: 0k BPD to 12.8mln BPD (prev. 12.8mln BPD); 0% W/W

Rockets reportedly land near the Khor Mor gas field in Iraq's Kurdistan, but no damage has been reported, according to Reuters citing security sources.
US President Biden reportedly blocks sale of Nvidia (NVDA) AI chips to Middle East over China fears, according to Telegraph. NVDA has reportedly "been ordered to seek permission when exporting chips to certain countries in the region, in an escalation of the White House’s national security curbs on advanced semiconductors."

NOTABLE HEADLINES

China's CSRS said it will supported listed property companies to raise funds in capital markets and to cope with the risks of private real estate, according to Reuters.
Baidu (BIDU) reportedly among the first firms to win China approval for AI models, according to Bloomberg.

NOTABLE HEADLINES

Eurogroup Statement said Italy's Deputy Governor of the Bank of Italy, Piero Cipollone, was the only candidate put forward to succeed ECB exec board member Fabio Panetta, according to Reuters. Panetta will resign on November 1st. Ministers will discuss Cipollone's candidacy on September 15th. A formal appointment will be made by EU leaders, most likely at their next summit in October.
ECB's Centeno said EZ economic growth indicators have been surprising on the downside recently, according to Reuters.
Italy reportedly considering the sale of key state-owned stakes to bolster its finances, according to Bloomberg.
French Government is reportedly looking to secure commitment from supermarkets and consumer goods groups to double the number of products subject to price cuts this year in a push against high inflation, according to finance ministry sources cited by Reuters.

DATA RECAP

German HICP Prelim YY * (Aug 2023) 6.4% vs. Exp. 6.3% (Prev. 6.5%)
German HICP Prelim MM * (Aug 2023) 0.4% vs. Exp. 0.3% (Prev. 0.5%)
German CPI Prelim MM * (Aug 2023) 0.3% vs. Exp. 0.3% (Prev. 0.3%)
German CPI Prelim YY * (Aug 2023) 6.1% vs. Exp. 6.0% (Prev. 6.2%); Core 5.5% (prev. 5.5%)
EU Business Climate* (Aug 2023) -0.33 (Prev. -0.09)