US stocks declined after hot Spanish inflation spurred profit-taking ahead of key events - Newsquawk Asia-Pac Market Open

US stocks declined and the broader risk appetite suffered as a hot Spanish inflation print was enough to catalyse profit-taking and added to the market jitters ahead of this week's deluge of key events.
USD gained with the DXY back above 102.00 ahead of this week's FOMC and amid the risk aversion, EUR/USD failed to sustain an early foray above 1.0900 and eventually softened in the aftermath of the mixed data releases from the bloc including disappointing German GDP and firmer-than-expected Spanish HICP.
Looking ahead, highlights include Australian Private Sector Credit, South Korean Industrial Production & Retail Sales, Japanese Industrial Production, Retail Sales & Consumer Confidence, Chinese PMIs & Industrial Profits, 2yr JGB Auction.

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Highlights include Australian Private Sector Credit, South Korean Industrial Production & Retail Sales, Japanese Industrial Production, Retail Sales & Consumer Confidence, Chinese PMIs & Industrial Profits, 2yr JGB Auction.

US TRADE

US stocks declined and the broader risk appetite suffered as a hot Spanish inflation print was enough to catalyse profit-taking and added to the market jitters ahead of this week's deluge of key risk events.
SPX -1.30% at 4,017, NDX -2.09% at 11,912, DJIA -0.77% at 33,717, RUT -1.35% at 1,885.
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NOTABLE HEADLINES

US Treasury expects to issue USD 932bln (exp. 860bln) of net marketable debt in Q1 and assumes an end-March cash balance of USD 500bln, while it expects to issue USD 278bln (exp. 210bln) of net marketable debt in Q2 and assumes end-June balance of USD 550bln. US Treasury said the increase in the Q1 borrowing estimate is due to a lower beginning-of-quarter cash balance and projections of lower receipts and higher outlay.

DATA RECAP

Treasuries extended their rout with a bear-flattener to start the week with hot Spanish inflation setting the tone ahead of a very busy week.

USD gained with the DXY back above 102.00 ahead of this week's FOMC and amid the risk aversion.
EUR eventually softened and EUR/USD failed to sustain an early foray above 1.0900 in the aftermath of the mixed data releases from the bloc including disappointing German GDP and firmer-than-expected Spanish HICP.
GBP was pressured as activity currencies suffered from the weak global macro sentiment.
JPY weakened throughout the session and USD/JPY tested 130.50 to the upside in anticipation of further divergences of policy between the BoJ and the key central banks that are expected to hike rates this week.

Oil prices declined amid the broader risk-off as impending rate hikes and signals of strong Russian exports outweighed the Chinese recovery hopes and geopolitical tensions.
Russian President Putin and Saudi Crown Prince discussed OPEC+ and maintaining price stability during a phone call, according to the Kremlin.
Russia banned domestic oil exporters from adhering to Western price caps and called on the energy ministry to devise an approach for monitoring prices of Russian oil exports by March 1st, according to Reuters.

Russian Foreign Ministry strongly condemned the provocative drone attack on a defence facility in Iran and said such actions could trigger uncontrolled escalation.

US President Biden's team is weighing fully cutting off Huawei from US suppliers, according to Bloomberg.
Chinese memory chip maker YMTC is laying off up to 10% of its workforce less than two months after it was added to a US trade blacklist, according to SCMP sources.
China sent a warning to Japanese ships around disputed islands, according to Bloomberg. Furthermore, it was reported that Chinese coast guards dispersed Japanese vessels which entered the territorial waters of Diaoyu/Senkaku Islands, according to Chinese state media.

EU is poised to relax curbs on tax credits to support investments in the green sector and some of the NextGenEU COVID Recovery Fund could be used towards tax credit, according to a draft seen by FT.
EU Commission will not propose a new joint EU borrowing to support the Chinese and US competition on Wednesday, according to a draft cited by Reuters.
German Finance Minister said Germany does not want to start a subsidy race with the US and sees no need for new EU financing instruments.
Germany's Destatis delayed the release of CPI data that was scheduled for Tuesday due to technical problems with data processing, while the data will be published next week with the exact date to be announced on Friday.

DATA RECAP

German GDP Flash QQ SA* (Q4) -0.2% (Prev. 0.4%, Rev. 0.5%)
German GDP Flash YY NSA* (Q4) 0.5% vs. Exp. 0.8% (Prev. 1.2%, Rev. 1.3%)
Spanish HICP Flash YY (Jan) 5.8% vs. Exp. 4.7% (Prev. 5.5%); MM -0.5% (prev. 0.00%)
EU Business Climate* (Jan) 0.69 (Prev. 0.54, Rev. 0.57)
EU Services Sentiment * (Jan) 10.7 vs. Exp. 7.9 (Prev. 6.3, Rev. 7.7)
EU Economic Sentiment * (Jan) 99.9 vs. Exp. 97.0 (Prev. 95.8, Rev. 97.1)
EU Consumer Confid. Final * (Jan) -20.9 vs. Exp. -20.9 (Prev. -20.9, Rev. -22.1)
EU Industrial Sentiment * (Jan) 1.3 vs. Exp. -0.6 (Prev. -1.5, Rev. -0.6)
EU Selling Price Expec * (Jan) 31.9 (Prev. 38.4, Rev. 37.8)
EU Consumer Inflation Expectations (Jan) 17.7 (Prev. 23.7, Rev. 23.2)