US stocks extended on declines post-FOMC minutes, despite firm US activity data - Newsquawk Asia-Pac Market Open

US stocks extended their declines alongside weakness in bonds and commodities with stronger-than-expected industrial production data doing little to inspire a rebound. Attention was on the FOMC minutes which stated that most officials saw "significant" upside risks to inflation and could require further tightening, although the minutes were pretty balanced in tone and stale, while stocks then continued on their downtrend in the aftermath of the release.
USD was firmer in the aftermath of the FOMC minutes which noted that most officials saw "significant" upside risks to inflation that could require further tightening although the internals were more balanced, while the buck had also been supported by strong US economic releases including the better-than-expected Industrial Production data which smashed expectations.
Looking ahead, highlights include New Zealand PPI, Australian Jobs Data, Japanese Machinery Orders & Trade Data, Singapore Non-Oil Exports, Supply from Japan.

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Highlights include New Zealand PPI, Australian Jobs Data, Japanese Machinery Orders & Trade Data, Singapore Non-Oil Exports, Supply from Japan.

US TRADE

US stocks extended on their declines alongside weakness in bonds and commodities with stronger-than-expected industrial production data doing little to inspire a rebound. Attention was on the FOMC minutes which stated that most officials saw "significant" upside risks to inflation and could require further tightening, although the minutes were pretty balanced in tone and stale, while stocks then continued on their downtrend in the aftermath of the release.
SPX -0.76% at 4,404, NDX -1.07% at 14,876, DJIA -0.52% at 34,766, RUT -1.28% at 1,872.
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FOMC MINUTES

FOMC Minutes from the July meeting stated uncertainty of the US economic outlook remains elevated and future policy decisions are to be driven by the totality of data, while most officials saw "significant" upside risks to inflation which could require further tightening. The minutes also stated that a number of participants warned of risks of accidentally tightening policy too much and a couple of participants favoured holding interest rates steady at the July meeting. Furthermore, a number of participants saw economic risks becoming more balanced and Fed staff no longer expect the economy to enter a mild recession this year.

NOTABLE HEADLINES

US Senate Majority Leader Schumer (D) said he met with House Speaker McCarthy (R) a few weeks ago and they agreed to do a resolution to fund the government for a few months, according to MSNBC.

DATA RECAP

US Industrial Production MM (Jul) 1.0% vs. Exp. 0.3% (Prev. -0.5%)
US Manufacturing Output MM (Jul) 0.5% (Prev. -0.3%)
US Capacity Utilisation (Jul) 79.3% vs. Exp. 79.1% (Prev. 78.9%)
US Building Permits: Number (Jul) 1.44M vs. Exp. 1.46M (Prev. 1.44M)
US Housing Starts Number (Jul) 1.45M vs. Exp. 1.45M (Prev. 1.43M)

US Treasuries were pressured and yields rose after US traders reversed an overnight bid, aided by US activity data.

USD was firmer in the aftermath of the FOMC minutes which noted that most officials saw "significant" upside risks to inflation that could require further tightening although the internals were more balanced, while the buck had also been supported by strong US economic releases including the better-than-expected Industrial Production data which smashed expectations.
EUR gave up ground to the firmer dollar and dipped beneath the 1.0900 level.
GBP outperformed following the latest inflation data which saw headline CPI Y/Y print in line at 6.8% but the core metric was firmer than expected at 6.9% and maintained the prior month's pace.
JPY continued to weaken with USD/JPY lifted above 146.00 by the upside in the buck and US yields.
Russian authorities are discussing options for supporting the Rouble and may bring back the compulsory sale of FX revenues "at any moment" even though part of export revenues are now in Roubles and Rupees, according to Reuters citing a high-level source who said the move could be imminent.

Crude tumbled despite a large inventory draw, as dollar strength and risk aversion weighed.
US EIA Weekly Crude Stocks (W/E 11 Aug) -5.96M vs. Exp. -2.50M (Prev. 5.85M)

US State Department urged Russia to return to the grain deal immediately and said the US is working with partners to identify other potential options to find corridors for Ukrainian grain.

NOTABLE HEADLINES

Chinese Premier Li Qiang said China vowed to meet annual economic targets and boost consumption and investment. Li added China should focus on expanding domestic demand and boosting bulk consumption, while the Cabinet will make greater efforts to attract and utilise foreign investment, according to state radio CNR.
China reportedly asked some funds to avoid net equity sales as the market sinks, according to Bloomberg sources.
PBoC-backed paper said recent yuan fluctuations are "normal" and expectations for the yuan exchange rate are stable, while it added that yuan decline pressure is to ease in H2.
World Trade Organisation rejected China's 2018 tariffs against US exports, while China requested that the US remove metal tariffs immediately.

NOTABLE HEADLINES

German Chancellor Scholz said the German economy is going through some challenging times but added that the economy came through the crisis better than many predicted and Germany is well-positioned to deal with current problems.
Germany’s government is to focus on the economic situation at the next Cabinet retreat in late August and the coalition has agreed to pass the growth opportunities act at the retreat, according to Reuters sources.

DATA RECAP

UK CPI YY (Jul) 6.8% vs. Exp. 6.8% (Prev. 7.9%)
UK Core CPI YY (Jul) 6.9% vs. Exp. 6.8% (Prev. 6.9%)
EU GDP Flash Estimate QQ (Q2) 0.3% vs. Exp. 0.3% (Prev. 0.3%)
EU GDP Flash Estimate YY (Q2) 0.6% vs. Exp. 0.6% (Prev. 0.6%)
EU Industrial Production MM (Jun) 0.5% vs. Exp. -0.1% (Prev. 0.2%, Rev. 0.0%)
EU Industrial Production YY (Jun) -1.2% vs. Exp. -4.2% (Prev. -2.2%)
EU Employment Flash YY (Q2) 1.5% vs. Exp. 1.4% (Prev. 1.6%)