US stocks eked mild gains in choppy trade as data remained the key driver - Newsquawk Asia-Pac Market Open

• US stocks were choppy but ultimately closed higher as data releases remained at the forefront of investors' attention after mostly encouraging data releases including better-than-expected US Retail Sales and Empire Manufacturing, while PPI data softened. Conversely, retailer sentiment was varied after mixed fortunes from the likes of Target and TJX post-earnings which comes ahead of Walmart's results on Thursday.
• USD regained some lost ground following a brief dip below the 104.00 level with support seen after Retail Sales and NY Fed Manufacturing topped forecasts although gains were capped by softer PPI data.
• Looking ahead, highlights include Japanese Trade Data & Machinery Orders, Australian Jobs Data & MI Inflation Expectations, Chinese House Prices, US President Biden's Press Conference, Supply from Japan.

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LOOKING AHEAD

• Highlights include Japanese Trade Data & Machinery Orders, Australian Jobs Data & MI Inflation Expectations, Chinese House Prices, US President Biden's Press Conference, Supply from Japan.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US stocks were choppy but ultimately closed higher as data releases remained at the forefront of investors' attention after mostly encouraging data releases including better-than-expected US Retail Sales and Empire Manufacturing, while PPI data softened. Conversely, retailer sentiment was varied after mixed fortunes from the likes of Target and TJX post-earnings which comes ahead of Walmart's results on Thursday.
• SPX +0.16% at 4,503, NDX +0.03% at 15,817, DJI +0.47% at 34,991, RUT +0.16% at 1,801.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Barkin (2024 voter) said hope to eventually bring interest rates back to normal and noted that a lot of frenzy has been taken out of the housing market, while they are seeing banks pull back credit which he added is not unexpected.
• Fed's Daly (2024 voter) said data showing a further deceleration in inflation was "very, very encouraging" and indicative of effective Fed policies, while she refused to rule out another interest rate hike and said rate cuts are "not happening for a while", according to an FT interview.
• US Senate Majority Leader Schumer moved to speed the vote on the stop-gap funding bill to avert a government shutdown on Saturday.
• US Senate Democrats are negotiating a deal for a vote on one amendment to the stopgap funding bill to avert a government shutdown and pave the way for the bill passage on Wednesday, according to Reuters citing sources. It was also reported that GOP Senator Thune said the Senate is close to an agreement on a vote to avert a shutdown and sees the Senate passing the stopgap bill in a few hours.

DATA RECAP

• US NY Fed Manufacturing (Nov) 9.1 vs. Exp. -2.8 (Prev. -4.6)
• US Retail Sales MM (Oct) -0.1% vs. Exp. -0.3% (Prev. 0.7%, Rev. 0.9%)
• US PPI Final Demand MM (Oct) -0.5% vs. Exp. 0.1% (Prev. 0.5%, Rev. 0.4%)
• US PPI Final Demand YY (Oct) 1.3% vs. Exp. 1.9% (Prev. 2.2%)
• US Business Inventories MM (Sep) 0.4% vs. Exp. 0.4% (Prev. 0.4%)

FX

• USD regained some lost ground following a brief dip below the 104.00 level with support seen after Retail Sales and NY Fed Manufacturing topped forecasts although gains were capped by softer PPI data.
• EUR softened as the dollar regained some composure and with the single currency also tarnished by a worse-than-feared contraction in EU Industrial Production and lower eurozone GDP growth forecasts.
• GBP retreated after hitting resistance at the 1.2500 level and following softer UK inflation data.
• JPY gave way to the dollar strength and reverted to the 151.00 territory as US yields rebounded.

FIXED INCOME

• Treasuries were sold despite soft PPI data as better-than-expected US retail sales and NY Fed survey accelerated profit taking.

COMMODITIES

• Oil prices declined amid mixed US inventory data, slowing Chinese oil demand and a firmer dollar.
• US EIA Weekly Crude Stocks +3.6M vs. Exp. +1.8M (Prev. +0.7M).
• Iranian oil exports have "come down", according to US President Biden's energy advisor.
• Urals and CPC blend oil loadings from Russia's Black Sea terminal were suspended from November 14th due to a storm, according to Reuters sources.
• China’s NDRC reportedly sent officials to the Dalian Commodity Exchange and studied monitoring works regarding price regulation of iron ore.

GEOPOLITICS

• Qatar is seeking to negotiate an Israel-Hamas deal to free about 50 civilian hostages in exchange for a three-day ceasefire, according to Reuters citing an official briefed on negotiations. Under a possible deal, Israel would release some Palestinian women and children from its jails and the deal would allow an increase in humanitarian aid to Gaza, while Hamas has agreed on an outline of a deal but Israel has yet to agree and is still negotiating details.
• Israel is ready for a temporary ceasefire in Gaza in order to return the 239 hostages held by Hamas, according to an Israeli minister and member of the security cabinet in an interview with Jewish News.
• The main gap in the indirect negotiations between Israel and Hamas regarding a possible deal for the release of prisoners is the length of the ceasefire that Israel will agree to as part of the move, according to sources from Axios cited by Walla News journalist Ravid.
• US Navy warship shot down a drone from Yemen earlier on Wednesday in the Red Sea, according to Reuters citing two US officials. Israeli media also reported that a missile intercepted over the Red Sea which was believed to have been launched from Yemen, according to Sky News Arabia.
• Russian Foreign Minister said Ukrainian accession into NATO is unacceptable, in part or in any form.
• EU Commission reportedly suggested fresh sanctions on Russia and is introducing a ban on diamonds and tightening other measures including the oil price cap, according to Politico citing documents. It was later reported that the EU Commission proposal for the 12th Russian sanctions package includes individuals in the Russian military, defence and IT sectors alongside other important operators.
• Iran is still breaching restrictions on its atomic activities imposed by the 2015 nuclear deal, according to the quarterly IAEA report seen by Reuters.
• Pentagon said the State Department approved a potential sale of sidewinder missiles to South Korea.

ASIA-PAC

NOTABLE HEADLINES

• US President Biden told Chinese President Xi that they have to ensure competition does not lead to conflict and can work together on AI and climate, while Xi told Biden that the US and China should be fully capable of rising above differences and said protectionism is weighing on the global economy.
• China objected to a US proposal for APEC countries to incorporate sustainability and exclusivity principles into their trade and investment policies, according to a Reuters source. Furthermore, USTR Tai noted that APEC negotiations on investment principles are continuing, and she is optimistic that "San Francisco principles" can be finalised soon.
• White House's Kirby said the Biden-Xi meeting will be productive and hopefully a precursor to more dialogue.
• Japanese PM Kishida asked the business community to raise wages in next year's spring labour talks by higher than this year amid current price trends.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Hunt said they’re now beginning to win the inflation battle and can look to the next stage of the plan on long-term growth.
• ECB's Centeno said they must be patient with policy and inflation is falling faster, while he added that data shows global inflation is falling and he still expects a "good" inflation print for November.
• EU Commission sees EZ GDP growth at 0.6% in 2023 (prev. 0.8%), 1.2% in 2024 (prev. 1.3%) and sees EZ inflation in 2023 at 5.6% (prev. 5.6%), while it said that ECB interest rates and weaker external demand took a heavier toll on EZ growth than expected.
• Spain’s acting PM Sanchez said the government is to extend sales tax cuts on food items until June 2024.

DATA RECAP

• UK CPI YY (Oct) 4.6% vs. Exp. 4.8% (Prev. 6.7%)
• UK Core CPI YY (Oct) 5.7% vs. Exp. 5.8% (Prev. 6.1%)
• EU Industrial Production MM (Sep) -1.1% vs. Exp. -1.0% (Prev. 0.6%)
• EU Industrial Production YY (Sep) -6.9% vs. Exp. -6.3% (Prev. -5.1%)