US stocks finished mixed in the aftermath of hot-leaning US CPI data - Newsquawk Asia-Pac Market Open

US stocks were choppy and finished mixed with trade characterised by the fallout from the CPI report which initially saw a kneejerk hawkish reaction that swiftly unwound as many deemed the report as lacking anything to convince officials that more hikes are needed, despite the pick-up in supercore CPI, while the larger jump in the headline Y/Y figure was unsurprisingly driven by energy price increases which officials are likely to look past.
USD was firmer and the DXY printed an intraday high just shy of the 105.00 level with attention today on inflation data in which headline CPI Y/Y topped forecasts and accelerated from the previous month but the Core Y/Y reading matched estimates and slowed from the prior.
Looking ahead, highlights include Japanese Machinery Orders, Australian MI Inflation Expectations & Jobs Data, Supply from Japan.

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Highlights include Japanese Machinery Orders, Australian MI Inflation Expectations & Jobs Data, Supply from Japan.

US TRADE

US stocks were choppy and finished mixed with trade characterised by the fallout from the CPI report which initially saw a kneejerk hawkish reaction that swiftly unwound as many deemed the report as lacking anything to convince officials that more hikes are needed, despite the pick-up in supercore CPI, while the larger jump in the headline Y/Y figure was unsurprisingly driven by energy price increases which officials are likely to look past.
SPX +0.13% at 4,467, NDX +0.38% at 15,348, DJIA -0.20% at 34,575, RUT -0.78% at 1,840.
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NOTABLE HEADLINES

Fed Vice Chair Jefferson and Fed Governors Cook and Kugler were sworn in on Wednesday.
US President Biden said the CPI report provides more evidence that core Inflation is trending down towards pre-COVID levels.

DATA RECAP

US CPI MM SA (Aug) 0.6% vs. Exp. 0.6% (Prev. 0.2%)
US CPI YY NSA (Aug) 3.7% vs. Exp. 3.6% (Prev. 3.2%)
US Core CPI MM SA (Aug) 0.3% vs. Exp. 0.2% (Prev. 0.2%)
US Core CPI YY NSA (Aug) 4.3% vs. Exp. 4.3% (Prev. 4.7%)
US Cleveland Fed CPI (Aug) 0.3% (Prev. 0.2%)

US Treasuries were firmer as the dust settled post-CPI although the long end lagged alongside a weak 30yr offering.

USD was firmer and the DXY printed an intraday high just shy of the 105.00 level with attention today on inflation data in which headline CPI Y/Y topped forecasts and accelerated from the previous month but the Core Y/Y reading matched estimates and slowed from the prior.
EUR softened as participants now look to the ECB meeting on Thursday with money markets currently pricing around a 36% chance of a pause and about a 64% probability for a 25bps rate increase.
GBP recovered the early losses that were triggered by the UK GDP and US CPI data releases.
JPY weakened amid receding concerns about a possible BoJ rate hike or imminent MoF FX intervention.

Crude was relatively unchanged on the day after gradually easing back from fresh peaks made earlier in the session and with headwinds from bearish inventory data.
US EIA Weekly Crude Stockpiles 3.95M vs. Exp. -1.60M (Prev. -6.31M)
IEA OMR maintained its 2023 and 2024 global oil demand growth forecast steady and stated that the extension of oil output cuts by Saudi and Russia will lock in a substantial market deficit through Q4 2023, while it added that OPEC+ cuts are tempered by sharply higher Iranian oil flows.
White House Economic Adviser Bernstein said the energy department is in touch with producers and refiners to resolve any issues and try to ensure stable supply.
Shanghai Futures Exchange is looking at the launch of nickel futures contracts for international use, according to Reuters sources.

Russia's Kremlin spokesperson said Russia will strengthen cooperation with North Korea on all fronts, while they did not discuss nuclear war risks and did not discuss the deployment of North Korean soldiers in Ukraine.
US State Department said it is troubling when you see Russians talking about cooperating with North Korea on programmes that would violate UN Security Council resolutions.

NOTABLE HEADLINES

China said it noticed "some" security incidents with regards to Apple (AAPL) iPhones, according to Bloomberg citing the daily press briefing.
White House called for China to be more transparent on Apple (AAPL) iPhone curbs, while it is watching it with concern and said it appears to be aggressive and inappropriate corporate retaliation.
European Commission President von der Leyen said global markets are flooded by cheaper Chinese EVs and that their prices are kept artificially low by subsidies, while the Commission is to begin an anti-subsidy investigation into Chinese EVs.
China Chamber of Commerce to the EU expressed strong concern and opposition to the EU launching an anti-subsidy investigation against Chinese EVs, while Chinese experts and industry insiders said the anti-subsidy investigation launched by the EU into Chinese electric vehicle imports is biased and shows a protectionist tendency, according to Global Times.
Japanese PM Kishida said he will ensure the end of deflation and will take steps to attract investments by the private and public sectors sized around JPY 150tln. Kishida also said he will instruct the cabinet to compile pillars of a new economic package by the end of this month, while he cannot say when the government will decide on the start of the tax hike for the defence budget.

NOTABLE HEADLINES

French and German finance ministers said the EU must enable businesses to raise private capital over EUR 500bln of funding each year, according to FT.
German Economy Ministry report said early indicators point to subdued development of private consumption in coming months and current indicators point to a weak Q3, while a noticeable economic recovery is to be seen at the turn of the year 2023-24 at the earliest. It was separately reported that Germany is to revise its 2023 GDP outlook to a contraction of up to 0.3%, according to Bloomberg.
Italian PM Meloni said the windfall tax on banks can be amended leaving the tax take unchanged and the government expects less than EUR 3bln in revenues.

DATA RECAP

UK GDP Estimate MM (Jul) -0.5% vs. Exp. -0.2% (Prev. 0.5%);
UK GDP Est 3M/3M (Jul) 0.2% vs. Exp. 0.3% (Prev. 0.2%)
UK GDP Estimate YY (Jul) 0.0% vs. Exp. 0.4% (Prev. 0.9%)
UK Industrial Output MM (Jul) -0.7% vs. Exp. -0.6% (Prev. 1.8%)
UK Industrial Output YY (Jul) 0.4% vs. Exp. 0.5% (Prev. 0.7%)
UK Manufacturing Output MM (Jul) -0.8% vs. Exp. -1.0% (Prev. 2.4%)
UK Manufacturing Output YY (Jul) 3.0% vs. Exp. 2.7% (Prev. 3.1%)
EU Industrial Production MM (Jul) -1.1% vs. Exp. -0.7% (Prev. 0.5%, Rev. 0.4%)
EU Industrial Production YY (Jul) -2.2% vs. Exp. -0.3% (Prev. -1.2%, Rev. -1.1%)