US stocks finished flat as participants await a profusion of central bank activity - Newsquawk Asia-Pac Market Open

US stocks finished little changed with catalysts light and price action choppy ahead of this week's profusion of central bank updates, while there was mild outperformance in the energy sector amid rising oil prices.
USD slightly softened with price action kept to within a tight range ahead of this week's central bank announcements.
Looking ahead, highlights include Malaysian Trade Data, RBA Minutes, Supply from Japan, Indian Markets are Closed for Holiday.

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Highlights include Malaysian Trade Data, RBA Minutes, Supply from Japan, Indian Markets are Closed for Holiday.

US TRADE

US stocks finished little changed with catalysts light and price action choppy ahead of this week's profusion of central bank updates, while there was mild outperformance in the energy sector amid rising oil prices.
SPX +0.07% at 4,454, NDX +0.15% at 15,225, DJI +0.02% at 34,624, RUT -0.69% at 1,834
Click here for a detailed summary.

NOTABLE HEADLINES

US Treasury Secretary Yellen said the US had a good and strong labour market and it is important for workers to be able to realise gains, while she noted the labour market is cooling but without significant layoffs. Furthermore, she sees no signs the economy is in a downturn and believes they are achieving lower inflation.
US House Speaker McCarthy said he will bring the stopgap spending measure to the House floor this Thursday.

DATA RECAP

US Treasuries were mixed with the curve flattening in light trade ahead of the FOMC and this week's bond auctions.

USD slightly softened with price action kept to within a tight range ahead of this week's central bank updates.
EUR strengthened after source reports noted policymakers want to start discussing how to tackle the pool of excess liquidity around banks with the debate likely to start at the October meeting and lifting reserve requirements is a possible first move, although gains were capped in the single currency which hit resistance just shy of 1.0700.
GBP oscillated back and forth of the 1.2400 level with trade choppy ahead of UK CPI and the BoE rate decision.
JPY saw two-way price action and ultimately gained against the dollar in rangebound trade.

Crude prices were firmer in choppy trade with upside helped amid the softer dollar and early stock advances but then pared some of the gains heading into the settlement as risk sentiment also waned.
Saudi Aramco CEO Nasser said the peak oil demand forecast is "wilting under scrutiny" and politicians must be honest on transition challenges, while he added that oil demand is to rise to a record 103mln-104mln BPD in H2. Furthermore, Saudi Aramco’s CEO sees 110mln BPD of global oil demand in 2030.
Saudi Energy Minister said they want to be proactive, pre-emptive and precautious, while he added that they should be able to make decisions in secrecy like central bankers and said to wait until they see real numbers in market tightness. It was separately reported that the Saudi Energy Minister said the situation is not bad yet and the jury's still out regarding Chinese oil demand which is the fundamental issue, according to Energy Intel's Bakr.
EIA said US total shale regions oil production for October is seen lower by 41k BPD at 9.391mln BPD (prev. 27k BPD fall in Sep) which is the lowest since May.
US President Biden’s administration released a statement saying it "strongly opposes" legislation to change the procedure for approval on import and export of natural gas.

EU is gearing up for a fight over what should be included in its 12th package of sanctions over Russia’s war in Ukraine as G7 moves ahead with a plan to ban purchases of diamonds from Moscow, according to Bloomberg's Jacobs.
US official responded that the US does not close the door entirely to diplomacy when asked about Iranian nuclear diplomacy, while the US will be meeting with E3 counterparts to fully coordinate on Iran's IAEA move and will have more to say on that.

NOTABLE HEADLINES

PBoC and SAFE are to hold a meeting with foreign financial institutions including Morgan Stanley (MS), HSBC (HSBA LN), and Deutsche Bank (DBK GY), as well as firms such as Tesla (TSLA) and BASF (BAS GY). Furthermore, it was stated that China will improve its policies and create a market-oriented international-level business climate.
PBoC lifted temporary curbs on gold imports (imposed on some lenders in a bid to defend the Renminbi) as the Renminbi recovers, according to the FT.
China's Industry Ministry plans to work on standards for developments in the metaverse field.
China’s Vice Premier and European Commission Vice President held in-depth talks on topics including AI and cross-border data flow, while both sides agreed to promote an open, fair and non-discriminatory environment for the development of the digital economy.
US Treasury Secretary Yellen said it would be "disastrous" for the US to decouple from China but added that the US needs to "derisk".

NOTABLE HEADLINES

ECB policymakers reportedly want to begin discussing how to tackle the multi-trillion pool of excess liquidity around banks and the debate is likely to start in October's meeting with the lifting of reserve requirements a possible first move, according to Reuters citing sources. Furthermore, discussions are expected to focus on three areas including the unwinding of the bond-buying programme, a new framework for steering short-term rates, and the amount of reserves banks must keep at the ECB with several policymakers reportedly in favour of lifting the amount from 1.0% of customer deposits to 3% or 4%.
ECB's de Guindos said parts of underlying inflation are moderating.
ECB's Villeroy said the ECB will maintain rates at 4% as needed.
ECB's Kazimir said he wishes the September rate hike was the last but cannot rule out further rate increases and that only the March forecast can confirm that the ECB is heading towards the inflation goal, while he added the end of rate hikes is to open debate on how to adjust PEPP and APP.
Bundesbank Monthly Report (September) expects the German economy to shrink in Q3 on weak industry and muted private consumption.