Weekend News Round Up - Newsquawk Asia-Pac Market Open

• US stocks were choppy on Friday and lacked clear direction in the absence of any major catalysts, while the Energy sector led the gains owing to higher oil prices and Real Estate lagged amid higher short-end yields.
• BoJ Governor Ueda signalled a chance of ending Japan’s negative rates this year in which he stated that they cannot rule out that they might have sufficient data by year-end to determine whether they can end negative rates and that the central bank seeks a quiet exit, while he added that they will end negative rates if they judge that achieving the price target becomes possible and that they will keep ultra-easy policy for now. Furthermore, he stated that there are various options they can take if economic growth and inflation overshoot expectations, as well as noted that the BoJ will work with the government to assess the impact on the economy and prices regarding recent yen declines, according to an interview with Yomiuri.
• Looking ahead, highlights include Japanese Money Supply & Malaysian Industrial Production.

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LOOKING AHEAD

• Highlights include Japanese Money Supply & Malaysian Industrial Production.

US TRADE

• US stocks were choppy on Friday and lacked clear direction in the absence of any major catalysts, while the Energy sector led the gains owing to higher oil prices and Real Estate lagged amid higher short-end yields.
• SPX +0.14% at 4,457, NDX +0.14% at 15,280, DJIA +0.22% at 34,577, RUT -0.23% at 1,851.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US President Biden said at the G20 that the US wants to expand economic corridors and needs to maximise investments, while he added that they are focusing on infrastructure projects that deliver results across multiple countries and sectors, according to Reuters.
• US President Biden spoke with Saudi Crown Prince MBS and Chinese Premier Li at the G20, while it was also reported that the US and Vietnam signed a deal on semiconductor supply chains which will help expand manufacturing capacity with reliable partners, according to the White House. Furthermore, top US chipmakers and tech firms are to attend a Vietnam meeting on Monday amid US President Biden’s visit, according to Reuters.
• US Treasury Secretary Yellen said she is confident regarding a soft landing for the US economy and said that every measure of inflation is on the path down, according to Bloomberg.
• US House Republicans are set to move forward with FY24 defence department spending legislation this week.
• WSJ’s Timiraos said an important shift in Fed officials’ rate stance is underway and the Fed is likely to pause increases in September and then take a harder look at whether more are needed. Timiraos added that some officials still prefer to err on the side of raising rates too much with the reasoning that they can cut them later, while other officials see risks as more balanced and worry that raising rates could cause an unnecessary downturn or trigger a new bout of financial turmoil.

COMMODITIES

• Iraq set October Basrah medium crude OSP to Asia at a premium of USD 1.80/bbl vs Oman/Dubai average and set OSP to Europe at a discount of USD 2.55/bbl vs dated Brent, while it set OSP to North and South America at a discount of USD 0.35/bbl vs ASCI.
• Iraqi Oil Minister said no agreement was reached with Turkey to immediately resume Iraq’s northern oil exports, while he also said that average daily oil production is at 4.23mln bpd with exports averaging 3.35mln bpd.
• Libya’s Ras Lanuf, Zueitina, Brega and Es Sider oil ports were closed on Saturday evening for three days due to an expected hurricane, according to Reuters citing oil engineers.
• India and Saudi Arabia are likely to sign an energy cooperation MOU on Monday, while Saudi Crown Prince MBS announced the signing of an MOU for an economic corridor between India, the Middle East and Europe which will include pipelines for electricity and hydrogen.
• US and Saudi Arabia are in talks to secure metals for EVs, according to WSJ.

GEOPOLITICAL

• Ukrainian President Zelensky said Ukrainian troops had advanced on the southern front in the past week and there was also movement in the east near Bakhmut, according to Reuters.
• US is reportedly nearing a decision on sending long-range missile ATACMS to Ukraine for the first time, according to officials cited by ABC News.
• Russian Foreign Minister Lavrov said there are ideas for other regional organisations to join the G20 and said that the de-dollarisation process has already started including with India, while Lavrov also said that they regret the decision by Armenia regarding plans for military drills with the US, according to Reuters.
• European Council President Michel criticised Russia for its cynicism in pulling out of the Black Sea grain deal and said Russia’s offer of a million tons of grain to African countries was a parody of generosity.
• Turkish President Erdogan said they discussed the issue of the Black Sea grain deal in great detail and any initiative that isolates Russia is bound to fail. Erdogan also stated that Russian President Putin is ready to send grain to poor countries and Qatar also agreed, while he noted it is not hopeless regarding reimplementing the grain deal and the process can start again.
• Romanian Defence Ministry said pieces of a drone similar to those used by the Russian army were found in Romanian territory on Saturday.
• Azerbaijan’s Defence Ministry said Armenian forces fired on Azerbaijani army positions and the Azerbaijani army took retaliatory measures. In relevant news, Nagorno-Karabakh separatist authorities said a deal was reached with Azerbaijan to restore transport on the Lachin corridor by Russian peacekeepers and Red Cross. However, an Azerbaijani presidential adviser denied a deal to reopen the Lachin corridor but said the road to Azerbaijan will open for aid shipments regardless, according to Reuters.
• US Navy said US and Canadian warships sailed through the Taiwan Strait on Saturday, according to Reuters.
• North Korean leader Kim and the Chinese delegation to North Korea shared views on intensifying multi-faceted cooperation.
• Russian President Putin sent a letter to North Korean leader Kim and stated that the two countries’ relations will expand in all aspects on common efforts, according to KCNA.

ASIA-PAC

NOTABLE HEADLINES

• BoJ Governor Ueda signalled a chance of ending Japan’s negative rates this year in which he stated that they cannot rule out that they might have sufficient data by year-end to determine whether they can end negative rates and that the central bank seeks a quiet exit, while he added that they will end negative rates if they judge that achieving the price target becomes possible and that they will keep ultra-easy policy for now. Furthermore, he stated that there are various options they can take if economic growth and inflation overshoot expectations, as well as noted that the BoJ will work with the government to assess the impact on the economy and prices regarding recent yen declines, according to an interview with Yomiuri.
• Japanese PM Kishida confirmed he plans to reshuffle the cabinet and to conduct personnel change at the party leadership, while he added that they aim to take drastic economic stimulus measures, according to Reuters.
• Japanese PM Kishida and South Korean President Yoon agreed to work on the resumption of a three-way summit with China, according to Reuters.
• Chinese Premier Li said G20 countries should step up macro-economic policy coordination and China will resolutely deepen reforms and opening up. Furthermore, Premier Li said China and Europe should unite and provide stability amid global uncertainties.
• White House official said it is incumbent on China to explain why its leader was not present at the G-20 Summit and it is unfortunate if China was not committed to the bloc’s success.
• European Council President Michel met with Chinese Premier Li and confirmed a shared interest in holding an EU-China summit by year-end, according to Reuters.
• Italian PM Meloni told Chinese Premier Li about Italy’s plan to quit the Belt and Road Initiative, according to Italian media cited by Reuters.
• UK PM Sunak said he raised strong concerns over any interference in Britain’s parliament with Chinese Premier Li and said any interference would be unacceptable.
• UK and Singapore signed a new strategic partnership to boost economic growth and strengthen security, according to a UK government statement.

DATA RECAP

• Chinese CPI MM (Aug) 0.3% vs. Exp. 0.3% (Prev. 0.2%)
• Chinese CPI YY (Aug) 0.1% vs. Exp. 0.2% (Prev. -0.3%)
• Chinese PPI YY (Aug) -3.0% vs. Exp. -3.0% (Prev. -4.4%)

EU/UK

NOTABLE HEADLINES

• British Chambers of Commerce survey showed that small and medium-sized enterprises in the UK are completely unprepared for an impending ‘avalanche’ of fresh EU regulations and taxes such as next month’s EU green tax and obligations related to the EU’s VAT regime that kick in from 2025, according to FT.
• UK trade unions are to challenge anti-strike laws at the UN watchdog, according to FT.
• Italy reportedly could amend the 40% tax on banks’ windfall profits which was unveiled last month.
• S&P affirmed Portugal at BBB+; Outlook Revised to Positive from Stable.