Tech led the declines stateside after Apple event disappointment - Newsquawk Asia-Pac Market Open

• US stocks were lower with the Nasdaq leading the downside as tech stocks were pressured following the Apple event where the iPhone pricing point provided some disappointment, while higher oil prices and a slight increase in short-term yields ahead of the incoming US CPI data also contributed to the cautious mood.
• USD traded in a choppy fashion with early upside capped below the 105.00 level ahead of US CPI and EUR marginally softened with the single currency not helped by a further deterioration in German ZEW data.
• Looking ahead, highlights include New Zealand Food Price Index, Japanese BSI Large Manufacturing Index & PPI.

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LOOKING AHEAD

• Highlights include New Zealand Food Price Index, Japanese BSI Large Manufacturing Index & PPI.

US TRADE

• US stocks were lower with the Nasdaq leading the downside as tech stocks were pressured following the Apple event where the iPhone pricing point provided some disappointment, while higher oil prices and a slight increase in short-term yields ahead of the incoming US CPI data also contributed to the cautious mood.
• SPX -0.57% at 4,461, NDX -1.11% at 15,289, DJIA -0.05% at 34,646, RUT +0.01% at 1,855.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US House Speaker McCarthy said the House is to open an impeachment enquiry into President Biden and that he backs the move. House Speaker McCarthy also stated that he has a plan to avoid a government shutdown.
• US Commerce Secretary Raimondo is expected to meet with US business CEOs on Thursday, according to Reuters sources.
• Apple (AAPL) stated in its product event that the response to the Vision Pro has been amazing and it is on track to ship the Vision Pro early next year, while it announced its Apple Watch Series 9. Furthermore, it also announced the iPhone 15 and iPhone 15 Pro with iPhone 15 price to start at USD 799 and the Plus at USD 899, while the iPhone Pro starts at USD 999 and Pro Max at USD 1199.

DATA RECAP

• US NFIB Business Optimism Index (Aug 2023) 91.3 (Prev. 91.9)

FIXED INCOME

• US Treasuries were mixed as duration caught a mild bid with the short end lightly offered ahead of CPI, while the long-end benefitted amid a decent 10yr auction.

FX

• USD traded in a choppy fashion with early upside capped below the 105.00 level ahead of US CPI.
• EUR marginally softened with the single currency not helped by a further deterioration in German ZEW data.
• GBP was constrained following weaker-than-expected jobs data including an uptick in the unemployment rate.
• JPY underperformed its G10 counterparts in which USD/JPY climbed back above the USD 147.00 level.

COMMODITIES

• Crude prices rallied to fresh YTD peaks after the latest OPEC monthly oil report which maintained its 2023 and 2024 forecasts but flagged tight supply ahead.
• US Energy Inventory Data (bbls): Crude +1.2mln (exp. -1.9mln), Gasoline +4.2mln (exp. +0.2mln), Distillate +2.6mln (exp. +1.3mln), Cushing -2.4mln.
• US EIA STEO raised 2023 forecast for world oil demand growth by 50k BPD and now sees a 1.81mln BPD Y/Y increase, while it cut 2024 world oil demand growth by 250k BPD to a 1.36mln BPD Y/Y increase.
• OPEC MOMR for September kept 2023 and 2024 forecasts unchanged.

GEOPOLITICAL

• Russian President Putin said the FSB captured Ukrainian saboteurs who sought to damage their nuclear power station and that the saboteurs were instructed by British services, while he added it is worrying and the consequences could be serious.
• Russia's Kremlin said the grain deal is on hold and there is no progress yet, according to TASS.
• UK Deputy PM Dowden said the UK will send an aircraft carrier to Indo-Pacific in 2025.

ASIA-PAC

NOTABLE HEADLINES

• China's Zhengzhou relaxed home purchase restrictions, according to Calian.
• Several Chinese banks said regulators, as of this year, no longer require them to report the proportion of property loans/mortgages in total loans, indicating a relaxation of restrictions on property financing, according to Xinhua.
• China is to set up a cross-Taiwan Strait integrated development demonstration zone, according to Xinhua. China is to increase passenger and freight routes to Taiwan, while it will promote more qualified Taiwanese firms in Fujian to list in China, as well as support innovative ways of cross-Strait capital cooperation and encourage the setup of integration development fund.
• Chinese Vice Premier Guoqing met with Russian President Putin and said China is willing to share development opportunities and deepen mutually beneficial cooperation with Russia, according to Chinese state media.
• US Senate Majority Leader Schumer plans a bipartisan delegation to China in October, according to Punchbowl.
• Japanese Defence Minister Hamada is to be replaced by LDP lawmaker Kihara and Foreign Minister Hayashi to be replaced by former Justice Minister Kawakami under the cabinet reshuffle.
• Nikkei article stated there is a sense at the BoJ that December is too soon to end negative rates and although the government is keen on moves that could support the weak Yen, December is a politically difficult time and a January decision appears to be a more realistic scenario.

DATA RECAP

• Indian CPI Inflation YY (Aug) 6.8% vs. Exp. 7.0% (Prev. 7.4%)
• Indian Industrial Production YY (Jul) 5.7% vs. Exp. 4.8% (Prev. 3.7%)

EU/UK

NOTABLE HEADLINES

• BoE's Breeden agrees with the MPC that the risks to inflation around the August forecasts are to the upside and expects inflation to be around the 2% target in two years.
• UK PM Sunak's spokesperson said the government remains committed to the triple-lock pension policy. It was separately reported that the UK government is considering an adjustment to the way it calculates the 'triple lock' for state pension payments which potentially could save GBP 1bln, while the plan would see a removal of any one-time impact of bonuses paid to public sector workers, according to Bloomberg citing sources.
• UK is reportedly nearing a post-Brexit deal for access to the EU border agency, according to Bloomberg.
• ECB's Villeroy said overall inflation is past its peak in France and the ECB will bring inflation toward 2% by 2025, according to an AFP interview.
• ECB’s new 2024 inflation projection is to be above 3% vs. 3% in June, firming the case for an interest rate hike, according to Reuters sources. Furthermore, the ECB is to cut 2023 and 2024 economic growth projections to broadly in line with market expectations, while a source said the rate decision was still a close call and formal proposals for the meeting have not yet been presented.
• German Finance Minister Lindner said the public-sector budget deficit is seen at roughly 2.5% this year and is expected to shrink to about 2% next year.
• Germany's ZEW said experts are even more pessimistic about the current economic situation in Germany compared to August.

DATA RECAP

• UK Employment Change (Jul) -207k vs. Exp. -185k (Prev. -66k)
• UK ILO Unemployment Rate (Jul) 4.3% vs. Exp. 4.3% (Prev. 4.2%)
• UK Average Earnings (Ex-Bonus) (Jul) 7.8% vs. Exp. 7.8% (Prev. 7.8%)
• UK Average Weekly Earnings 3M YY (Jul) 8.5% vs. Exp. 8.2% (Prev. 8.2%, Rev. 8.4%)
• German ZEW Economic Sentiment (Sep) -11.4 vs. Exp. -15.0 (Prev. -12.3)
• German ZEW Current Conditions (Sep) -79.4 vs. Exp. -75.0 (Prev. -71.3)
• EU ZEW Survey Expectations (Sep) -8.9 (Prev. -5.5)