US stocks traded mixed amid light catalysts and tech weakness - Newsquawk Asia-Pac Market Open

• US stocks traded mixed with price action subdued in a quiet US session amid a lack of major catalysts and with no US data to shape the narrative ahead of Thursday's retail sales and PPI figures. The Nasdaq was dragged lower owing to underperformance in tech and notable losses in Tesla following a bearish Wells Fargo note, while the energy sector was underpinned as oil prices rallied.
• USD marginally softened after the DXY failed to sustain a brief incursion above 103.00 amid little data to drive price action and with participants now awaiting US Retail Sales and PPI data due on Thursday.
• Looking ahead, highlights include UK RICS House Price Balance, Indian WPI, Supply from Japan.

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LOOKING AHEAD

• Highlights include UK RICS House Price Balance, Indian WPI, Supply from Japan.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US stocks traded mixed with price action subdued in a quiet US session amid a lack of major catalysts and with no US data to shape the narrative ahead of Thursday's retail sales and PPI figures. The Nasdaq was dragged lower owing to underperformance in tech and notable losses in Tesla following a bearish Wells Fargo note, while the energy sector was underpinned as oil prices rallied.
• SPX -0.19% at 5,165, NDX -0.83% at 18,068, DJI +0.10% at 39,043, RUT +0.30% at 2,072.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US President Biden is set to voice concerns over the Nippon Steel (5401 JT) takeover of US Steel (X) and is set to issue a statement about the takeover before Japanese PM Kishida arrives for a state visit on April 18th, according to FT.
• US Treasury Secretary Yellen said it seems unlikely that interest rates will return to levels as low as before COVID and noted that interest rate assumptions in US President Biden's budget plans were reasonable and consistent with a broad range of forecasts, according to Reuters.
• US Treasury Secretary Yellen said she has every expectation that the single biggest contributor to inflation will be moving down this year, according to a Fox Business News interview.

FX

• USD marginally softened after the DXY failed to sustain a brief incursion above 103.00 amid little data to drive price action and with participants now awaiting US Retail Sales and PPI data due on Thursday
• EUR strengthened against the dollar although the gains were relatively mild after weaker-than-expected Industrial Production data and with little impact seen following the ECB's operational framework review announcement or from the latest comments from ECB officials.
• GBP traded choppy on both sides of the 1.2800 level after a slew of UK data including monthly GDP which matched estimates.
• JPY was rangebound against the dollar with an intraday recovery in USD/JPY helped by support at the 147.50 level.

FIXED INCOME

• Treasuries extended on recent declines with a solid 30yr auction failing to spur a meaningful reversal.

COMMODITIES

• Oil prices rallied amid Russian facility outages, bullish US energy inventory data and a softer dollar.
• US EIA Weekly Crude Stocks w/e -1.536M vs. Exp. 1.4M (Prev. 1.367M)
• Top Chinese copper smelters have reportedly reached an agreement to take action to curb falling fees with smelters to cut output at loss-making plants, according to Reuters sources.

GEOPOLITICAL

MIDDLE EAST

• Israeli military said it killed a "significant" Hamas member Hadi Ali Mustafa in Lebanon.
• US reportedly held secret talks with Iran over the Red Sea attacks with indirect negotiations in Oman aimed to end strikes against shipping by Tehran-backed Houthis, according to FT.

OTHER

• Russian President Putin said Russia will deploy troops to Finland's border now it is in NATO.
• Russian Defence Ministry said Russia thwarted Ukraine's attempts to break through into the Belgorod and Kursk region, according to RIA.
• Russian Foreign Ministry spokeswoman said the Ukraine crisis could spill beyond Ukraine's borders and get out of control due to ill-considered actions of one or two NATO countries, while Russian Foreign Ministry spokesperson also alleged that the US attempts to organise cyberattacks on the electronic voting system in Russia.
• White House said they have not seen any indications that Russia is preparing to use nuclear weapons.
• Chinese Defence Ministry said China and NATO held a dialogue on security policy in Beijing.

ASIA-PAC

NOTABLE HEADLINES

• China’s State Council issued plans for trading in consumer goods and equipment upgrades, while the trade-in plan will cover auto and home appliances and it will step up fiscal support for equipment upgrades.
• China’s financial regulator reiterated it will strengthen market oversight and forcefully resolve risks, as well as promote a good cycle of finance and real estate sectors.
• US House approved the bill threatening to ban TikTok if ByteDance refuses to divest. It was separately reported that the top two senators on Senate Intel are now supporting the TikTok bill, according to Punchbowl's Sherman.
• BoJ Governor Ueda said the BoJ will consider tweaking negative rates, YCC, and other monetary easing tools if the sustained achievement of price target comes into sight and that they must scrutinise whether positive wage-inflation cycle merges in deciding whether conditions for phasing out stimulus are falling into place. Ueda also said that this year's wage talks are critical in deciding the timing of exit from stimulus and they will scrutinise the wage talk outcomes, as well as other data and information from hearings when making policy decisions.
• BoJ is reportedly to mull ending all ETF purchases if the price goal is in sight, while it is likely to keep buying bonds to keep the market stable and intervene in the event of sharp yield upside, according to Bloomberg sources.
• BoJ will discuss whether to end its negative interest rate policy as pay hikes by major companies bring the central bank's 2% price stability target within reach. Furthermore, it was noted that with more BoJ policymakers embracing the idea, the decision is seen coming down to the results of Japan's annual wage negotiations, to be published by top labour confederation Rengo on Friday, according to Nikkei.
• Early signs of a strong outcome in this year's annual wage talks have heightened the chances that the BoJ will end its negative interest rate policy next week, according to a Reuters source which noted there seems to be enough factors that justify a March policy shift.
• Japanese PM Kishida said will call for pay hikes exceeding last year at small and mid-sized firms during the meeting with the labour union and management, while he added that Japan is not yet emerging out of deflation.
• Japanese PM adviser Yata said wage hikes this year are likely to exceed last year's, while they must continue pay rises next year and thereafter to defeat deflation, as well as broaden pay hikes to workers nationwide and in every prefecture.
• Japan's business lobby Keidanren head Tokura said wage increases indicated in the preliminary survey of big firms' wage talks are likely to exceed last year’s levels.
• Japan is to relax some requirements to create more options for foreign visitors as tourism traffic rebounds, according to Nikkei.
• Australian Treasurer Chalmers is to report a smaller revenue upgrade for this year's budget than last year as commodity prices fall and the labour market softens, according to reports seen by Reuters.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Hunt said it will be a long and difficult journey to reverse the rise in public debt.
• ECB New Framework announcement noted the Minimum Reserve Requirements will remain unchanged at 1% (exp. 1-2%) and the spread between the rate on MROs and DFR is to be reduced to 15bps (vs prev. 50bps) as from 18 September 2024 by adjusting the MRO rate. Furthermore, the rate on the MROs will be adjusted such that the spread between the rate on the MROs and the DFR will be reduced to 15bps (current 50bps), while the MLF-MRO spread is unchanged at 25bps.
• ECB's Kazaks said the ECB rate cut decision will come in the next few meetings, while he added that uncertainty remains high and tensions in the labour market are also still high.
• ECB's Villeroy said the ECB is winning the battle against inflation and will remain vigilant on inflation with victory within sight, while he added that a spring rate cut remains probable and they are more likely to cut rates in June than April.

DATA RECAP

• UK GDP Estimate MM (Jan) 0.20% vs. Exp. 0.20% (Prev. -0.10%)
• UK GDP Estimate YY (Jan) -0.30% vs. Exp. -0.30% (Prev. 0.00%)
• UK GDP Est 3M/3M (Jan) -0.10% vs. Exp. -0.10% (Prev. -0.30%)
• UK Manufacturing Output MM (Jan) 0.0% vs. Exp. 0.0% (Prev. 0.8%)
• UK Manufacturing Output YY (Jan) 2.0% vs. Exp. 2.0% (Prev. 2.3%)
• UK Industrial Output MM (Jan) -0.2% vs Exp. 0.0% (Prev. 0.6%)
• UK Industrial Output YY (Jan) 0.5% vs. Exp. 0.7% (Prev. 0.6%)
• UK Services MM (Jan) 0.20% vs. Exp. 0.20% (Prev. -0.10%)
• UK Services YY (Jan) -0.50% vs. Exp. -0.50% (Prev. 0.10%)
• German Wholesale Price Index MM (Feb) -0.1% (Prev. 0.1%)
• German Wholesale Price Index YY (Feb) -3.0% (Prev. -2.7%)
• EU Industrial Production MM (Jan) -3.2% vs. Exp. -1.5% (Prev. 2.6%, Rev. 1.6%)
• EU Industrial Production YY (Jan) -6.7% vs. Exp. -2.9% (Prev. 1.2%, Rev. 0.2%)