US stocks edged higher in catalyst-light trade ahead of US CPI data - Newsquawk Asia-Pac Market Open

US stocks edged higher in thin, catalyst-light trade as markets await Wednesday's US CPI data and with late upside heading into the close amid a large buy-side imbalance, while the Russell 2k continued to outperform the major indices.
USD marginally weakened albeit with price action contained within a tight range amid thin newsflow and a lack of tier-1 data releases, with market participants looking ahead to the incoming US CPI data.
Looking ahead, highlights include South Korean Unemployment Rate, Japanese Machinery Orders & PPI, RBNZ Rate Decision, Speech from RBA Governor Lowe, Supply from Australia.

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Highlights include South Korean Unemployment Rate, Japanese Machinery Orders & PPI, RBNZ Rate Decision, Speech from RBA Governor Lowe, Supply from Australia.

US TRADE

US stocks edged higher in thin, catalyst-light trade as markets await Wednesday's US CPI data and with late upside heading into the close amid a large buy-side imbalance, while the Russell 2k continued to outperform the major indices.
SPX +0.67% at 4,439, NDX +0.49% at 15,119, DJIA +0.93% at 34,261, RUT +0.96% at 1,913.
Click here for a detailed summary.

NOTABLE HEADLINES

Fed Discount Rate Minutes stated 4 regional Fed bank boards sought a 25bps increase and 8 suggested standing pat, while it added that Cleveland, Richmond, St. Louis and Dallas directors sought a hike.
US bipartisan group of senators is pushing to speed up the review process for new chip production factories and warned the US is still losing ground to China even after passing major semiconductor funding legislation last year, according to Punchbowl.

US Treasuries were flatter in choppy and thin trade ahead of CPI and auctions.

USD marginally weakened albeit with price action contained within a tight range amid thin newsflow and a lack of tier-1 data releases, with market participants looking ahead to the incoming US CPI data.
EUR traded flat after EUR/USD recouped early losses and just about clawed back the 1.1000 status.
GBP strengthened and gradually extended above the 1.2900 level against the dollar after hot wage data.
JPY was choppy but ultimately strengthened with haven currencies favoured ahead of the key US data.
Brazilian President Lula is reportedly weighing more cabinet changes to cement Congress support.

Crude was firmer and settled near today's best levels with continued momentum after surpassing recent key levels accompanied by dollar weakness in lack of any clear catalysts, while Saudi also reaffirmed a keenness to bolster OPEC+ precautionary efforts to stabilise the oil markets.
US Energy Inventory Data (bbls): Crude +3.0mln (exp. +0.5mln), Gasoline +1.0mln (exp. -0.7mln), Distillate +2.91mln (exp. -0.3mln), Cushing -2.2mln.
EIA STEO (July) stated 2023 world oil demand growth forecast was raised by 170k BPD to a 1.76mln BPD Y/Y increase, while the 2024 forecast was cut by 60k BPD to a 1.64mln BPD Y/Y increase.
Saudi’s cabinet reaffirmed a keenness to bolster OPEC+ precautionary efforts to stabilise the oil markets.
Iraqi PM said Iraq is to trade crude oil for Iranian gas to end issues of US approval for payments to Tehran, while Iran has agreed to resume gas exports to Iraq after a stoppage related to delayed payments.

NATO allies agreed to declaration language on Ukraine's membership pathway to NATO, while NATO Secretary General Stoltenberg reaffirmed that Ukraine will become a member of NATO and agreed to remove the need for a membership action plan.
France started to deliver a "significant number" of long-range scalp cruise missiles to Ukraine which will be fired from non-western warplanes, according to Reuters sources.
Russian Kremlin said the French missile decision is a mistake and will have consequences for Ukraine as countermeasures are taken, while it added that Sweden's NATO entry will entail similar response measures as seen for Finland.
Russian Defence Minister Shoigu said the delivery of cluster bombs to Ukraine will prolong the conflict and warned if US cluster bombs are used in Ukraine, the Russian army will be forced to use similar methods, according to Interfax.
Taiwan's Defence Ministry said 34 Chinese aircraft were detected around Taiwan on Tuesday, while it was also reported that Taiwan is planning its first large-scale evacuation drill in decades this month in a sign that it is trying to harden civil defences against a potential Chinese attack, according to FT.

NOTABLE APAC HEADLINES

Chinese President Xi said the government is to speed up resolving shortcomings in agriculture and it is necessary to deepen reforms in trade and investment, as well as expand market access, while he added the country should also improve national security systems and mechanisms.
US Secretary of State Blinken told NBC that President Biden and Chinese President Xi are to talk in the months ahead, while it was separately reported that US climate envoy Kerry is to travel to Beijing this weekend, according to CNN.
China's CPC approved reforms for further deepening reform of oil and gas markets, while it also plans to deepen reforms of the electric power system.
Australia and EU failed to come to an agreement on free trade deal talks, according to a Commission spokesperson.

NOTABLE HEADLINES

UK Treasury is looking to overturn the EU ban on "naked" short selling in the gilt market made in the eurozone debt crisis and said restrictions on betting against sovereign debt have hurt liquidity, according to FT.
UK postal workers voted in favour of a wage deal with Royal Mail, according to the trade union.
ECB's Villeroy said they are starting to see good news on inflation which will continue to decline and will be back at 2% by 2025, while he added that inflation should be at 2.5% on average next year.
Eurozone finance ministers are to agree to wind down energy support measures and use savings to cut budget deficits, while it was noted that a gradual fiscal consolidation is warranted and they aim for an overall restrictive stance in 2024, according to a draft statement.

DATA RECAP

UK HMRC Payrolls Change (Jun) -9k (Prev. 23k)
UK ILO Unemployment Rate (May) 4.0% vs. Exp. 3.8% (Prev. 3.8%)
UK Average Earnings (Ex-Bonus)(May) 7.3% vs. Exp. 7.1% (Prev. 7.2%)
UK Average Week Earnings 3M YY (May) 6.9% vs. Exp. 6.8% (Prev. 6.5%)
German ZEW Economic Sentiment (Jul) -14.7 vs. Exp. -10.5 (Prev. -8.5)
German ZEW Current Conditions (Jul) -59.5 vs. Exp. -60.0 (Prev. -56.5)
EU ZEW Survey Expectations (Jul) -12.2 (Prev. -10.0)