US stocks faltered and all major indices wiped out initial gains - Newsquawk Asia-Pac Market Open

• US stocks finished lower after spending most of the session gradually fading their opening gains in what turned out to be a rather grim session which saw all sectors close in the red, while a miss on jobless claims data and the upside in yields were also unhelpful for risk sentiment.
• USD softened but was well off intraday lows after the DXY recovered most of the losses seen from a brief dip beneath the 103.00 level, with the rebound spurred as risk appetite gradually soured.
• Looking ahead, highlights include Japanese PPI, Chinese CPI & PPI, RBA Statement on Monetary Policy, Australian Supply.

View the full premarket movers and news report.

Or why not try Newsquawk's squawk box free for 7 days?

LOOKING AHEAD

• Highlights include Japanese PPI, Chinese CPI & PPI, RBA Statement on Monetary Policy, Australian Supply.

US TRADE

EQUITIES

• US stocks finished lower after spending most of the session gradually fading their opening gains in what turned out to be a rather grim session which saw all sectors close in the red, while a miss on jobless claims data and upside in yields were also unhelpful for risk sentiment.
• SPX -0.88% at 4,081, NDX -0.91% at 12,381, DJIA -0.73% at 33,699, RUT -1.40% at 1,915.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Barkin (non-voter) said the effects of the Fed's tightening have been substantial and must stay the course on reigning in inflation, while he added that inflation is likely past its peak but still elevated and it will take longer for a pullback in demand to further slow the pace of price increases. Furthermore, Barkin is confident that the Fed has its foot "unequivocally on the brake" and reaffirmed the view that it makes sense for the Fed to steer "more deliberately" from here due to lagged effects of policy.

DATA RECAP

• US Initial Jobless Claims 196k vs. Exp. 190.0k (Prev. 183.0k)
• US Continued Jobless Claims 1.688M vs. Exp. 1.658M (Prev. 1.655M, Rev. 1.650M)

FIXED INCOME

• Treasuries initially saw pronounced flattening until a dismal 30yr bond auction pressured the long-end.

FX

• USD softened but was well off intraday lows after the DXY recovered most of the losses seen from a brief dip beneath the 103.00 level, with the rebound helped as risk appetite gradually soured.
• EUR was firmer against the buck albeit with gains capped after stalling shy of the 1.0800 handle.
• GBP advanced and reclaimed the 1.2100 handle against the dollar although faded much of the gains after a brief approach to near 1.2200, while there were several BoE speakers including Governor Bailey who expects inflation to come down rapidly this year and Tenreyro noted that rates are currently are too high and would consider a rate cut but couldn't say at which meeting she would vote for this.
• JPY traded both sides of the 131.00 level and marginally weakened against the dollar amid slightly widening yield differentials, while it was reported that Japan's government plans to present nominees for the new BoJ governor on February 14th.
• Banxico hiked rates by 50bps in a unanimous decision (exp. 25bps hike) and said for the next policy meeting, the upward adjustment to the reference rate could be of a lower magnitude.
• Brazil is mulling an early review of inflation goals to boost them, according to Bloomberg.
• Riksbank raised its Policy Rate by 50bps to 3.00%, as expected, while it is to reduce asset holdings at a faster pace effective from April and said the policy rate will probably be raised further during the spring.
• Riksbank's Thedeen said the rate path indicates either a 25bps or 50bps hike in April, while recent weakness in the SEK is hard to explain and there are good fundamental reasons why the SEK should be stronger.

COMMODITIES

• Oil prices were lower as the general risk-averse sentiment provided headwinds for the complex.
• Kazakhstan crude output declined 10% due to unplanned Tengizchevoil work.
• Germany is close to signing a long-term supply deal of at least 10yrs with Oman for natural gas which would be between 0.5-1mln tons per annum, according to Reuters sources.
• Oil and oil product exports from the Black Sea's Novorossiisk and Tuapse Ports, as well as the CPC Terminal were suspended due to a storm, according to traders.

GEOPOLITICAL

• Russian Kremlin said Ukraine's request for UK fighter planes will draw out the conflict, while it was also reported that the Deputy Chairman of the Russian Security Council said Russia is to increase tank production in response to Western arms supply.
• Russia is ready to implement the initiative of the IAEA chief on the Zaphorizhzhia nuclear safety zone, according to Interfax citing nuclear power company Rosatom.
• US issued new Iran and Russia-related sanctions, according to the US Treasury website.
• Russian wealth fund is to hold only CNY, RUB, and gold with Russia set to sell all EUR assets from its wealth fund this year, according to Interfax.
• North Korean hackers reportedly hit healthcare organisations in the US and South Korea, according to CNN.

ASIA-PAC

• White House said the US will take action against Chinese entities linked to the surveillance balloon. It was also reported that the US is to look at broader efforts to expose and address China's surveillance activities that pose a threat to US national security, according to a State Department official.
• US President Biden's admin is set to extend restrictions to a new area of the US-China relationship which will involve American funds that go to the development of advanced computing technologies in China, according to NY Times' Swanson.
• Chinese Defence Ministry said it declined the proposed phone call with the US because the US side did not create an appropriate atmosphere.
• China's Foreign Ministry commented regarding Australia ordering checks on China-made cameras within defence offices and stated that it hopes Australia provides a fair environment for Chinese companies, while it also said that it welcomes US Treasury Secretary Yellen's willingness to visit China.
• Japan’s government plans to present nominees for the new BoJ Governor with Parliament on February 14th, according to TBS.

EU/UK

• BoE Governor Bailey said he expects inflation to come down rapidly this year and said they need to see more evidence of inflation pressures easing.
• BoE Chief Economist Pill said they are now seeing some signs of loosening in labour market data and expect some margin of economic slack to emerge. Pill also said there is substantial monetary policy tightening still to come through as a result of lags in transmission but added there is no room for complacency and inflation remains unacceptably high, while he anticipates an extended period of weakness in the UK economy.
• BoE's Haskel said he finds his expectations for inflation to be towards the upper part of the distribution, while he is very worried about momentum building on inflation and is looking hard at shorter-term indicators on jobs.
• BoE's Tenreyro said her view is that rates are too high and would consider a rate cut, but cannot say at which meeting she would vote for this.
• ECB's Nagel said core inflation is a decisive gauge for monetary policy and there is some ground to cover with interest rates.

DATA RECAP

• German CPI Prelim MM (Jan) 1.0% vs. Exp. 0.8% (Prev. -0.8%)
• German CPI Prelim YY (Jan) 8.7% vs. Exp. 8.9% (Prev. 8.6%)
• German HICP Prelim MM (Jan) 0.5% vs. Exp. 1.2% (Prev. -1.2%)
• German HICP Prelim YY (Jan) 9.2% vs. Exp. 10.0% (Prev. 9.6%)