US stocks gained as yields and oil prices eased back from recent peaks - Newsquawk Asia-Pac Market Open

• US stocks traded higher with the major indices led by outperformance in the Nasdaq as yields eased and oil prices retreated from recent peaks although price action was somewhat choppy heading into month-end and following the mixed bag of data releases stateside, while a shutdown threat also looms.
• USD pared some of this week's gains as yields eased although the DXY just about held on to the 106.00 status, while the data releases were mixed and the latest Fed rhetoric was predominantly neutral.
• Looking ahead, highlights include Japanese Industrial Production, Retail Sales & Tokyo CPI, Australian Private Sector Credit, Supply from Australia, Holiday Closures in China, Taiwan & South Korea.

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LOOKING AHEAD

• Highlights include Japanese Industrial Production, Retail Sales & Tokyo CPI, Australian Private Sector Credit, Supply from Australia, Holiday Closures in China, Taiwan & South Korea.

US TRADE

• US stocks traded higher with the major indices led by outperformance in the Nasdaq as yields eased and oil prices retreated from recent peaks although price action was somewhat choppy heading into month-end and following the mixed bag of data releases stateside, while a shutdown threat also looms.
• SPX +0.59% at 4,299, NDX +0.84% at 14,702, DJI +0.35% at 33,666, RUT +0.87% at 1,794.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Goolsbee (voter) said some analysis shows inflation reaching the target soon 'without further policy tightening' and only a modest slowdown in growth, while he added if the Fed sees a lack of progress on the price side, it will have to raise restraint. Furthermore, Goolsbee said still trying to process why long-end interest rates are increasing and if long rates continue to increase, the Fed will have to take account of that as a form of tightening.
• Fed's Barkin (non-voter) said a government shutdown would create uncertainty and the lack of data due to a shutdown would complicate understanding the economy. Barkin also stated that it is too soon to say what is next for monetary policy and if another hike is needed, while he added the economy will drive what the Fed decides on monetary policy.
• US State Department said they are conducting contingency planning to see what functions are essential if there is a government shutdown.
• US Senate Majority Leader Schumer said the Senate could vote Sunday or sooner on a stopgap funding bill, while it was later reported that the Senate bill to avert a government shutdown garnered enough votes to advance, as expected.
• US House Speaker McCarthy said he thinks Senate Majority Leader Schumer is more likely to take Ukraine money out of the continuing resolution than himself, while McCarthy spoke to senators and said do not send a CR with Ukraine money to the House unless there are border provisions in it, according to Punchbowl's Sherman. It was separately reported that McCarthy responded they will get it done and can work through the weekend to figure government funding out when asked about the odds of a government shutdown.
• US increased 6-, 13-, 26- and 52-week bill sizes by USD 5bln, 2bln, 2bln and 2bln, respectively, to USD 65bln, 71bln, 64bln and USD 44bln. Furthermore, 13- and 26-week bills will be sold on October 2nd, while 6-week and 52-week bills will be sold on October 3rd with all to settle on October 5th.

DATA RECAP

• US GDP (Q2 F) 2.1% vs. Exp. 2.1% (Prev. 2.1%)
• US Core PCE Prices (Q2 F) 3.7% vs. Exp. 3.7% (Prev. 3.7%)
• US Initial Jobless Claims (W 23 Sep) 204.0k vs. Exp. 215.0k (Prev. 201.0k, Rev. 202k)
• US Continued Jobless Claims (W 16 Sep) 1.67M vs. Exp. 1.675M (Prev. 1.662M, Rev. 1.658M)
• US Pending Sales MM (Aug) -7.1% vs. Exp. -0.8% (Prev. 0.9%, Rev. 0.5%)
• US KC Fed Manufacturing (Sep) -13.0 (Prev. 12.0)

FIXED INCOME

• US Treasuries recouped some of its recent losses heading into quarter-end despite mixed US data and a weaker-than-average 7yr auction.

FX

• USD pared some of this week's gains as yields eased although the DXY just about held on to the 106.00 status, while the data releases were mixed and the latest Fed rhetoric was predominantly neutral.
• EUR benefitted from the pullback in the dollar and after it found a floor near the 1.0500 level.
• GBP traded firmer alongside the strength seen across most cyclical currencies.
• JPY was marginally supported as US yields eased although remained in 149.00 territory.
• Banxico kept rates unchanged as expected at 11.25% and repeated that it considers it will be necessary to maintain the reference rate at the current level for an extended period.

COMMODITIES

• Crude prices declined throughout the session in a pullback from fresh YTD peaks as the market stopped for pause despite the softer dollar.
• Saudi Aramco will enter the global LNG business via a USD 500mln stake in MidOcean Energy.
• Russia's Kremlin said there are no discussions with OPEC+ about a possible rise in oil exports amid a fuel exports ban, while it said Russia will stick to its agreement with OPEC+. It was also reported Russia halted exports of uranium to the US via St. Petersburg ports.
• US Interior Department is to release a 5yr offshore oil drilling plan on Friday.

GEOPOLITICAL

• US State Department senior official said they have seen a clear and upward trend of Chinese provocations in the South China Sea.
• Chinese Defence Ministry commented on joint drills in the Yellow Sea by the US and its allies whereby it stated that they conducted proactive military activities on China's doorstep and China will not sit idly aside.

ASIA-PAC

NOTABLE HEADLINES

• Chinese President Xi said China’s economy has improved and will meet annual economic targets, according to state TV.
• Chinese Finance Ministry will exempt urban land use tax on land used for the construction of affordable housing projects in which the stamp duty for affordable housing management firms and buyers will be exempted.
• Chinese FX Regulator expects the current account surplus to remain basically stable in H2, while cross-border two-way investment is expected to further stabilise and improve.
• China's cyberspace regulator issued draft rules on promoting and regulating cross-border flow of data in which companies providing more than 1mln people's personal information outside the country should conduct a safety assessment of data.
• US and China talks gather momentum paving the way for a Xi and Biden summit, while their governments are discussing Washington visits by a senior Chinese economic policy official and the foreign minister, according to WSJ.

EU/UK

NOTABLE HEADLINES

• ECB's Nagel said they may require more rate hikes if the data shows further steps are needed and do not yet know where the peak is, while his base scenario is that they will end this cycle of interest rate hikes with a soft landing of the economy.

DATA RECAP

• EU Consumer Confidence (Sep) -17.8 vs. Exp. -17.8 (Prev. -17.8)
• EU Services Sentiment (Sep) 4.0 vs. Exp. 3.5 (Prev. 3.9)
• EU Industrial Sentiment (Sep) -9.0 vs. Exp. -10.5 (Prev. -10.3)
• EU Economic Sentiment (Sep) 93.3 vs. Exp. 92.5 (Prev. 93.3)
• German CPI MM (Sep P) 0.3% vs. Exp. 0.3% (Prev. 0.3%)
• German CPI YY (Sep P) 4.5% vs. Exp. 4.6% (Prev. 6.1%)