US stocks finished mixed with asset classes choppy ahead of US CPI data - Newsquawk Asia-Pac Market Open

US stocks finished mixed in choppy post-Superbowl thinned trade ahead of the January CPI report on Tuesday and with an initial rally in the major indices seen during the NY morning as Bitcoin surged towards USD 50k which it later breached for the first time since late 2021 and NYCB extended its Friday recovery. However, NYCB shares then faded their gains later on, while the SPX and NDX saw a big tech-led pullback in the absence of an obvious catalyst, although there was some attention on a Goldman note warning about extended positioning in the tech sector which may have made a mark in otherwise quiet trade.
USD eked mild gains in rangebound trade in which DXY traded both sides of 104.00 amid limited Fed speak and as the main focus lies on Tuesday's US CPI data.
Looking ahead, highlights include Australian Westpac Consumer Sentiment & NAB Business Survey, Japanese PPI & Machine Tool Orders, New Zealand Inflation Expectation, Speech from RBA's Kohler, Supply from Australia, Holiday closures in China, Hong Kong, Taiwan & Vietnam.

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Highlights include Australian Westpac Consumer Sentiment & NAB Business Survey, Japanese PPI & Machine Tool Orders, New Zealand Inflation Expectation, Speech from RBA's Kohler, Supply from Australia, Holiday Closures in China, Hong Kong, Taiwan & Vietnam.
Click here for the Newsquawk Week Ahead.

US TRADE

US stocks finished mixed in choppy post-Superbowl thinned trade ahead of the January CPI report on Tuesday and with an initial rally in the major indices seen during the NY morning as Bitcoin surged towards USD 50k which it later breached for the first time since late 2021 and NYCB extended its Friday recovery. However, NYCB shares then faded their gains later on, while the SPX and NDX saw a big tech-led pullback in the absence of an obvious catalyst, although there was some attention on a Goldman note warning about extended positioning in the tech sector which may have made a mark in otherwise quiet trade.
SPX -0.1% at 5,022, NDX -0.44% at 17,883, DJI +0.32% at 38,797, RUT +1.75% at 2,045
Click here for a detailed summary.

NOTABLE HEADLINES

Fed's Barkin (voter) said the Fed is closing in on the inflation target but is not yet there.
Fed's Bowman (voter) said many risks remain for the Fed's inflation fight and it is too soon to project when and how much to cut rates, while she does not see rate cuts as appropriate in the immediate future.
NY FED SCE (Jan) showed one-year inflation expectations at 3% (prev. 3% in December), three-year expectations at 2.4% (prev. 2.6%) which represents the lowest since March 2020, while five-year expectations remained at 2.5% (prev. 2.5%).

DATA RECAP

USD eked mild gains in rangebound trade in which DXY traded both sides of 104.00 amid limited Fed speak and as the main focus lies on Tuesday's US CPI data.
EUR traded mildly softer against the dollar after failing to sustain the 1.0800 status and with the latest ECB commentary providing little to shift the dial.
GBP was ultimately flat ahead of key data later this week including UK GDP and CPI with Rabobank noting that surveys are suggesting GDP could confirm a technical recession in the latter part of 2023. Furthermore, BoE Governor Bailey said he wouldn't put too much weight on whether the UK enters a technical recession and is starting to see signs of an upturn, while he added that any UK recession will be shallow.
JPY swung between gains and losses before reverting to flat territory amid the long weekend in Japan and with the rebound in USD/JPY facilitated by a brief intraday rebound in yields.

Treasuries closed slightly firmer in two-way trade ahead of US CPI data on Tuesday.

Oil prices were choppy amid Middle East woes, an indecisive dollar, and Saudi jawboning.
Saudi Energy Minister said there is a huge cushion when asked if 1.5mln-2mln BPD is sufficient spare capacity, while he added that oil demand is consistently bigger than some projections and they are ready to tweak supply up or down as required by the market.
Saudi Aramco CEO said not in agreement there will be peak demand and expects 104mln BPD demand in 2024 and 105mln BPD in 2025.
Iraqi Oil Minister said the country is committed to OPEC decisions and after the second voluntary cuts, Iraq is committed to producing no more than 4mln BPD, while current crude exports are between 3.3mln-3.4mln BPD (vs 3.3mln BPD January average) and talks with oil firms operating in Kurdistan are on their way to being resolved.
UAE is committed to working with OPEC+ to study the position of the oil market and take decisions to guarantee its stability.
Chile’s Codelco copper production fell 2.1% Y/Y in December and 2023 output fell by 8.3% Y/Y to 1.424mln tonnes. Escondida copper production rose 3.5% to 88.5k tons in December (+4.5% throughout 2023) and Collahuasi output rose 17.5% to 60.3k tons (+0.4% throughout 2023).

Israeli PM Netanyahu said Israel will not pass up on any chance to free hostages and military pressure should be sustained until "Gaza victory".
There were talks in Israel today to send a delegation to the Cairo meetings to be held tomorrow on the truce in Gaza, according to Sky News Arabia citing Israeli media.
Heads of the CIA and Israel’s Mossad spy agency are expected to hold talks with senior Egyptian and Qatari officials on Tuesday in a bid to revive negotiations on a deal to stop the war and release hostages, according to FT sources.
US State Department said it is not the US' assessment that the Israeli air strikes in Rafah are the beginning of a full-scale offensive there.
US seized a Venezuelan-owned cargo jet with ties to Iran’s IRGC that had been grounded in Argentina after its arrival two years ago prompted an investigation into possible terrorism ties, according to WSJ citing Biden administration officials.
White House said the US sees no indication there are about to be hostilities at the Venezuela-Guyana border.
Polish PM Tusk said Poland and Germany must take joint responsibility for mobilising Europe to increase defence capabilities and wants increasing defence production an absolute priority.

NOTABLE HEADLINES

EU proposed new trade restrictions on about two dozen firms including three based in China and one in India for supporting Russia’s war in Ukraine, according to Bloomberg and FT.

NOTABLE HEADLINES

BoE Governor Bailey said he expects banks to hold larger reserves at the BoE than was the case before the financial crisis. Bailey said he wouldn't put too much weight on whether the UK enters a technical recession and is starting to see signs of an upturn, while he added that any UK recession will be shallow and is putting more emphasis on the forward-looking data.
ECB's Buch said Eurozone banks are unprepared for some of the new economic and political risks they face.
ECB's Cipollone said there is no need for monetary policy to generate further slack to keep inflation in check as demand is weak and inflation expectations are anchored.
ECB's Wunsch, speaking to Econostream on Thursday, said while an argument could be made for deferring monetary policy easing until more data becomes available, the risks of deciding not to continue to wait were also not great. Wunsch also said there is some value to waiting, but added it is not if by waiting so many days or weeks or months that the ECB will know everything precisely.
Fitch affirmed the European Union and Euratom at 'AAA'; Outlook Stable.