US stocks and bonds surged amid the dovish JOLTS data - Newsquawk Asia-Pac Market Open

US stocks and bonds surged on Tuesday with the majority of the upside supported by the dovish JOLTS data, alongside a weak consumer confidence print.
The Dollar was in the red on Tuesday and started its descent lower after dovish US data, which improved risk sentiment to see stocks climb higher throughout the duration of the session and resulted in DXY hitting lows.
Treasuries bull steepen as dovish JOLTS bolster odds Fed is already at terminal while eyes turn to PCE and NFP later in the week.
China to cut rates on existing mortgages as soon as today and Chinese banks are considering additional deposit rate cuts to boost growth, according to Bloomberg.
Looking ahead, highlights include New Zealand Building Consents, Australian CPI, Japanese Consumer Confidence, and Supply from Australia.

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30th August 2023

US TRADE

US stocks and bonds surged on Tuesday with the majority of the upside supported by the dovish JOLTS data, alongside a weak consumer confidence print which reduced the implied probability of another Fed rate hike in November to c. 50% from c. 60% previously.
SPX +1.45% at 4,497, NDX +2.15% at 15,376, DJIA +0.85% at 34,852, RUT +1.42% at 1,895.
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NOTABLE HEADLINES

FedEx (FDX) Express shipping rates will increase by an average of 5.9% for US domestic, US export, and US import services, according to Reuters. The average annual rate increases are one percentage point lower than last year’s general rate increase.
WSJ's Timiraos "A JOLTS report the Fed will be pleased to see", according to Reuters.

DATA RECAP

US JOLTS Job Openings* (Jul 2023) 8.827M vs. Exp. 9.465M (Prev. 9.582M)
US Consumer Confidence (Aug 2023) 106.1 vs. Exp. 116.0 (Prev. 117.0)
US CaseShiller 20 YY NSA (Jun 2023) -1.2% vs. Exp. -1.3% (Prev. -1.7%)
US CaseShiller 20 MM SA (Jun 2023) 0.9% vs. Exp. 0.8% (Prev. 1.0%)
US CaseShiller 20 MM NSA (Jun 2023) 0.9% (Prev. 1.5%)
US Monthly Home Price YY* (Jun 2023) 3.1% (Prev. 2.8%)
US Monthly Home Price MM* (Jun 2023) 0.3% (Prev. 0.7%)
US Monthly Home Price Index* (Jun 2023) 405.8 (Prev. 404.1)
US Redbook YY * (W 26 Aug) w/e 4.2% (Prev. 2.9%)

The Dollar was in the red on Tuesday and started its descent lower after dovish US data, which improved risk sentiment to see stocks climb higher throughout the duration of the session and resulted in DXY hitting lows of 103.36.
AUD, NZD, EUR, CHF, and JPY were all firmer against the Buck, albeit to varying degrees, with the Antipodeans the clear outperformers on the risk appetite.
CAD and GBP were firmer, but the relative 'underperformers' although the Loonie was later supported by a rebound in crude prices. Month-end positioning may be weighing as Credit Agricole noting their FX model signals likely to be mild USD buying across the board, with the strongest buy signal in the case of the USD vs the CAD.
EMFX was largely firmer, with the TRY, lower, and MXN, flat, the relative underperformers. COP saw gains amid tailwinds from copper, while the Yuan regained momentum amidst latest speculation about Chinese banks lowering mortgage rates.
Hungary Central Bank cuts one-day deposit rate by 100bps to 14%, effective from Wednesday, as expected.
Brazilian Finance Minister Haddad said Brazil is far above the neutral interest rate; Brazil budget is balanced and no time to change it, according to Reuters.

Treasuries bull steepen as dovish JOLTS bolster odds Fed is already at terminal while eyes turn to PCE and NFP later in the week.
Germany sold EUR 3.394bln vs exp. EUR 4.0bln 2.40% 2028 Bobl: b/c 2.1x (prev. 2.30x), average yield 2.56% (prev. 2.50%) & retention 15.15% (prev. 15.70%).

The crude complex was choppy on Tuesday, but after dovish US JOLTS data oil has been on an upward trajectory in line with improved risk sentiment and Dollar selling.
US Energy Inventory Data (bbls): Crude -11.5mln (exp. -2.9mln), Gasoline +1.4mln (exp. -1.4mln), Distillate +2.5mln (exp. +0.1mln), Cushing -2.2mln
Chevron (CVX) evacuates staff from US Gulf of Mexico oil platforms ahead of Hurricane Idalia, output not affected, according to Reuters.
Russia said the grain deal can only be discussed on terms specified earlier by Russian President Putin, TASS reported.
Vale (VALE) executive said Chinese steel demand is declining less than some indicators suggest, according to Reuters.

Grayscale has won its lawsuit against the SEC, according to reports.
X has obtained a license for cryptocurrency payments and trading, CryptoTimes.

Goldman Sachs (GS) bought UK and US companies using Chinese state funds, according to FT

Russian President Putin to visit China, according to Bloomberg.
US Commerce Secretary Raimondo hopes export control dialogue will boost compliance. Raimondo says that Ambassador Burns says US delivered the message "our technology restrictions are not negotiable" in meetings with Chinese officials.

NOTABLE HEADLINES

China's gaming regulator grants approval for 58 domestic online games, according to Reuters.
Some Chinese State Banks will lower existing mortgage rates soon, some will cut fixed term deposit interest rates by 10-25bps, according to Reuters citing sources.
China to cut rates on existing mortgages as soon as today, via Bloomberg. Rates would be lowered on trillions of CNY of outstanding loans; the first time since the GFC, Co. will only impact first homes.
Agricultural Bank of China (1288 HK) - H1 (CNY): net profit 133.234bln vs. prev. 128.945bln, net interest income 290.421bln vs. prev. 300.219bln, NIM 1.66%. Agricultural Bank of China (1288 HK) to adjust existing mortgage rates is conducive to easing banks pressure from mortgage prepayments**; will draft detailed implementation rules after relevant policies become clear.
Chinese banks are considering additional deposit rate cuts to boost growth, according to BloombergMajor lenders could lower rates across key tenors by 5-20bps. The plan has been signed off by regulators and the cut could come as soon as Friday.
Xiaomi (1810 HK) Q2 (CNY): Revenue 67.35bln (exp. 65.84bln), Net 5.14bln (prev. 2.08bln). Smartphone revenue 36.6bln. Will not declare an interim dividend for 6-months.
NIO Inc (NIO) Q2 2023 (USD): adj. EPS -0.45 (exp. -0.34), Revenue 990.9mln (exp. 1.28bln).

NOTABLE HEADLINES

German Economy Minister Habeck said tax cuts should unleash investment in a challenging economic environment, according to Reuters.
UK to delay post-Brexit border controls on imports from the EU until January 2024, according to Reuters.