US stocks declined amid global macro headwinds - Newsquawk Asia-Pac Market Open

• US stocks traded lower as markets digested the slew of data releases from across the globe including the disappointing Chinese activity data and hawkish inflation numbers from Canada, while stronger-than-expected US Retail Sales did little to spur risk appetite and coincided with the release of a weak Empire State manufacturing survey. The losses were led by the energy sector as oil prices declined amid the macro-related headwinds and financials were also hit following a warning by Fitch of potential downgrades for dozens of banks.
• USD traded indecisively and eventually returned to near flat territory following the mixed data releases stateside in which NY Fed Manufacturing disappointed but Retail Sales topped forecasts, while there were comments from Fed's Kashkari that they feel good about progress on inflation but added that it's still too high and that they can take a little more time to observe the data to see if they need to raise rates more.
• Looking ahead, highlights include Australian Leading Index, Chinese House Prices, RBNZ Rate Decision & Press Conference, Supply from Australia.

More Newsquawk in 2 steps:

1. Subscribe to the free premarket movers reports

2. Trial Newsquawk’s premium real-time audio news squawk box for 7 days

LOOKING AHEAD

• Highlights include Australian Leading Index, Chinese House Prices, RBNZ Rate Decision & Press Conference, Supply from Australia.

US TRADE

• US stocks traded lower as markets digested the slew of data releases from across the globe including the disappointing Chinese activity data and hawkish inflation numbers from Canada, while stronger-than-expected US Retail Sales did little to spur risk appetite and coincided with the release of a weak Empire State manufacturing survey. The losses were led by the energy sector as oil prices declined amid the macro-related headwinds and financials were also hit following a warning by Fitch of potential downgrades for dozens of banks.
• SPX -1.16% at 4,437, NDX -1.10% at 15,037, DJIA -1.02% at 34,946, RUT -1.29% at 1,895.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Kashkari (voter) said they’ve been surprised by the economy's resilience and feel good about progress on inflation, but added that it's still too high and the question is has the Fed done enough or does it need to do more. Fed's Kashkari said they can take a little more time to observe the data to see if they need to raise rates more, while he is not ready to say that they are done raising rates and noted that cutting rates would be a "long time away" but they may need to lower nominal rates sometime next year.
• White House said it does not see any reason to have a government shutdown next month.
• US raised 4-, 8-, and 17-week bill auction sizes by USD 5bln, 5bln, and 2bln, respectively, to USD 80bln, 70bln, and 50bln, while the 4- and 8-week bills will be sold on Aug 17th and the 17-week bill will be sold on Aug 16th with all to settle on Aug 22nd.
• Fitch analysts warned the rating agency may be forced to downgrade dozens of banks including JPMorgan Chase (JPM), according to CNBC.

DATA RECAP

• US NY Fed Manufacturing (Aug) -19.0 vs. Exp. -1.0 (Prev. 1.1)
• US Retail Sales MM (Jul) 0.7% vs. Exp. 0.4% (Prev. 0.2%)
• US Import Prices MM (Jul) 0.4% vs. Exp. 0.2% (Prev. -0.2%)

FIXED INCOME

• US Treasuries steepened in volatile trade after ripping back higher off post-retail sales lows.

FX

• USD traded indecisively and eventually returned to near flat territory following the mixed data releases stateside in which NY Fed Manufacturing disappointed but Retail Sales topped forecasts, while there were comments from Fed's Kashkari that they feel good about progress on inflation but added that it's still too high and that they can take a little more time to observe the data to see if they need to raise rates more.
• EUR was flat against the dollar and continued to test support at the 1.0900 level to the downside.
• GBP strengthened amid the firmer-than-expected wages data and with the focus shifting to UK CPI data.
• JPY initially attempted to claw back some of its recent losses amid the renewed jawboning by Japanese officials regarding the currency, although it failed to sustain the recovery and USD/JPY returned to above the 145.50 level.
• CBR hiked rates by 350bps from 8.5% to 12% at its emergency rate decision, while it stated that steady growth in domestic demand surpassing capacity to expand output, amplifies the underlying inflationary pressure and has an impact on RUB dynamics via elevated demand for imports.
• Canadian CPI YY (Jul) 3.3% vs. Exp. 3.0% (Prev. 2.8%)

COMMODITIES

• Crude tumbled after the disappointing Chinese activity data added to the concerns surrounding the world's second-largest oil consumer, while weak Empire Manufacturing added to the headwinds for oil prices.
• US Energy Inventory Data (bbls): Crude -6.2mln (exp. -2.3mln), Gasoline +0.7mln (exp. -1.3mln), Distillate -0.8mln (exp. -0.5mln), Cushing -1.0mln.
• Russian Finance Ministry announced its crude oil export duty is to rise in September to USD 21.40 from USD 16.90 in August.

GEOPOLITICAL

• Russian Defence Minister said the situation at the Zaporizhia nuclear power station is dangerous and that Ukrainian measures may lead to a nuclear catastrophe, according to Al Arabiya.
• Russia is testing a digital Rouble in efforts to bypass sanctions, according to Bloomberg.
• US is in talks with Turkey, Ukraine, and Kyiv’s neighbours to increase the use of alternative export routes for Ukrainian grain, according to WSJ citing officials.
• China said Taiwanese presidential frontrunner Lai Ching-te brings risks of war.
• Chinese Defence Ministry said China and India had positive constructive in-depth discussions on the resolution of remaining issues along the Line of Actual Control (LAC) in the Western sector and agreed to maintain peace and stability in the area. Furthermore, the countries agreed to resolve the remaining issues in an "expeditious" manner.
• US Secretary of State Blinken said he cannot confirm a report of Iran slowing its nuclear programme.

ASIA-PAC

NOTABLE HEADLINES

• PBoC cut its standing lending facility rates by 10bps with the overnight rate now at 2.65%, 7-day rate now at 2.80% and 1-month maturities rate now at 3.15%.
• China reportedly mulls cutting its stamp duty to revive the slumping stock market with the details on the timing and size yet to be determined, while there is no guarantee the proposal will be approved, according to Bloomberg sources.
• China’s Xi'an city plans to adjust personal housing loan policy and is to reduce the down payment ratio of personal housing loans and loan interest rate policy floor, making them consistent with the lower limits of national policy, according to China Securities Journal. Fuzhou city also intends to adjust and optimise personal housing loan policy whereby the down payment ratio of second homes will be lowered to 40% from 50%, according to Shanghai Securities Journal.
• China’s recent policy measures will only start to kick in and lead to a more pronounced rebound at the end of Q3 or Q4, according to Global Times citing Chinese analysts.

EU/UK

NOTABLE HEADLINES

• UK PM Sunak said there is light at the end of the tunnel on inflation.
• UK's Unite union postponed one of two strikes due to begin later this week at Gatwick Airport.
• German government is planning to raise the amount of tax relief it will give to companies in a new draft law that could go to the cabinet as early as Wednesday, according to Reuters citing a document.
• Italy’s deputy PM is pushing to water down the bank windfall tax, according to FT.

DATA RECAP

• UK HMRC Payrolls Change (Jul) 97k (Prev. -9k, Rev. 47k)
• UK ILO Unemployment Rate (Jun) 4.2% vs. Exp. 4.0% (Prev. 4.0%)
• UK Average Weekly Earnings 3M YY (Jun) 8.2% vs. Exp. 7.3% (Prev. 6.9%)
• UK Average Earnings (Ex-Bonus)(Jun) 7.8% vs. Exp. 7.4% (Prev. 7.3%)
• EU ZEW Survey Expectations (Aug) -5.5 (Prev. -12.2)
• German ZEW Economic Sentiment (Aug) -12.3 vs. Exp. -14.7 (Prev. -14.7)
• German ZEW Current Conditions (Aug) -71.3 vs. Exp. -63.0 (Prev. -59.5)