Newsquawk

Euro Market Open: APAC stocks trade positive; AMZN +14% post-earnings

04 Feb 2022, 06:54 by Newsquawk Desk

Asian stocks eventually traded mostly positive following the tech-related turbulence in US
After-market earnings saw Amazon (AMZN) rising 14% and Snap (SNAP) soaring almost 60%
US equity futures rose overnight with the NQ (+2%) leading the gains; Amazon holds an ~8% weighting in the NDX
In FX, DXY extended further below 96.00, EUR/USD climbed above 1.1450 and Cable briefly reclaimed a 1.3600 handle
In fixed income, Japanese 5yr and 10yr yields reached levels last seen in January 2016
US has intel on a Russia plan to fake a pretext for an invasion of Ukraine using a faked video that would build on a recent disinformation campaign
Looking ahead, highlights include German Industrial Orders, EZ/UK Construction PMI, EZ Retail Sales, US & Canadian Labour Market Reports, Earnings from Carlsberg, Sanofi, Bristol-Myers and AON

US TRADE

US stocks declined amid heavy selling in tech after the record market cap wipeout for Meta post-earnings and hawkish central bank meetings across the pond, which resulted in the worst day for the S&P 500 in around a year and the Nasdaq suffered its largest daily decline since September 2020.
CLOSES: S&P 500 -2.4% at 4,480, Nasdaq 100 -4.2% at 14,501, Dow Jones -1.5% at 35,111, Russell 2000 -2.2% at 1,986.
Amazon (AMZN) rose 14% post-earnings, whilst Snap (SNAP) soared almost 60% after-market.

Asian stocks eventually traded mostly positive with early indecision seen after the tech-related turbulence in US.
ASX 200 (+0.6%) lacked direction for most the session before a late surge lifted the index above 7,100.
Nikkei 225 (+0.7) was initially contained by a pullback in USD/JPY, although earnings continued to drive price action.
Hang Seng (+3.3%) outperformed on return from a three-day closure with autos underpinned by a jump in deliveries and sports brands bid heading into the official start of the Beijing 2022 Winter Olympics.
US equity futures atoned for some of the prior session's losses led by NQ futures after earnings from Amazon and Snap; E-mini S&P +1.2%, E-mini Nasdaq 100 +2.1%.
European futures are indicative of a relatively flat open with the Euro Stoxx 50 future up by 0.5% after the cash market closed lower by 1.9% yesterday.

DXY extended further below 96.00 after hawkish BoE and ECB meetings. US NFPs eyed which is expected to show an increase of 150k although some anticipate a negative print with Goldman Sachs calling for a contraction of 250k jobs.
EUR/USD climbed above 1.1450 after ECB's President Lagarde refrained from ruling out a rate hike this year.
GBP/USD briefly reclaimed the 1.3600 handle after the hawkish dissent at yesterday's BoE rate hike decision.
USD/JPY pulled back beneath 115.00 amid the predominantly indecisive mood in Tokyo.
Antipodeans were kept rangebound by a lack of data releases and RBA maintaining a patient message in its SoMP.

10-year USTs extended on losses beneath 128.00 after the hawkish signals from the ECB and BoE meetings.
10-year JGBs were pressured by spillover selling and as Japanese yields rose with the 5yr yield at 0% for the first time since January 2016, while the 10yr yield climbed to levels near 0.2% which was also the highest since January 2016 but remained within the central bank’s +/-25bps range around its 0% 10yr JGB yield target.
Bund futures trickled lower after breaking beneath 167.00.

WTI and Brent remained elevated on the back of a weaker USD and ongoing geopolitical risks which lifted WTI above USD 90/bbl for the first time since 2014 and now approaches the USD 91/bbl level.
Qatar's Energy Minister Al-Kaabi said more gas investments are needed and has not spoken to Asian customers about diversions to Europe, while he added no single producer can supply Europe alone and more suppliers are needed if Russia is cut off, according to Reuters.
Libya's NOC halted oil exports from six ports amid bad weather, according to Quantum Commodity intelligence.
Citi recommended selling December 2022 Brent crude futures on expected inventory builds this year and it targets up to 20% downside in Brent December 2022 prices during H2.
Spot gold calmed overnight after yesterday's swings through USD 1800, with participants awaiting the US jobs data.
Copper benefitted from the gradual improvement in risk tone and reclaimed the USD 4.50/lb level.

NOTABLE APAC HEADLINES

RBA Quarterly Statement on Monetary Policy reiterated that the board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve, while it noted that a further improvement of the labour market is anticipated and ending bond purchases does not suggest a rate hike in the future.

DATA RECAP

South Korean CPI MM (Jan) 0.6% vs. Exp. 0.4% (Prev. 0.2%); YY (Jan) 3.6% vs. Exp. 3.3% (Prev. 3.7%)

UK PM Johnson's Chief of Staff resigned which was the fourth Downing Street aide to resign on Thursday, according to the BBC.
UK Cabinet ministers reportedly believe there is a 50-50 chance whether PM Johnson will be forced out of office, according to The Times.
Some Senior UK Ministers have called for the government to rethink net-zero plans as the pace of the shift is too fast and increasing consumer costs, according to The Telegraph.

US has intel on a Russia plan to fake a pretext for invasion of Ukraine using a faked video that would build on a recent disinformation campaign, according to the NYT.
US President Biden's administration conveyed to lawmakers that a Russia invasion into Ukraine still seemed imminent and expects that Russia will invade when the weather allows in which it will use a false flag operation to justify it', according to CNN's Raju citing lawmakers.
US State Department said the US has an array of tools it can use if it sees foreign companies including those in China are trying to backfill US export control actions over Ukraine, according to Reuters.
US bipartisan group of senators is reportedly within striking distance for a bill to impose sanctions on Russia for hostilities against Ukraine, according to ABC News.
US Secretary of State Blinken announced the State Department is imposing visa restrictions on multiple Belarusian nationals for involvement in 'serious, extraterritorial counter-dissident activity', according to Reuters.

NOTABLE US HEADLINES

Fed's Barkin (2024 voter) said it is a "straightforward call" to begin hiking rates and would like to see Fed Funds back to where it was before COVID in the 1.50%-1.75% range, then assess if it should be moved to a clearly "restrictive" level. Barkin added the ultimate level and pace of rate hikes remains uncertain but sees no need to "restrain" the economy now, according to Reuters.
US President Biden will sign executive order today requiring 'project labour agreements' in federal construction projects valued over USD 35mln which will apply to USD 262bln in federal contracting construction projects and impact almost 200k workers
US House Speaker Pelosi said she hopes to reach a deal on US government funding very soon, according to Reuters.
Amazon.com Inc (AMZN) Q4 2021 (USD): EPS 27.75 (exp. 3.68), Revenue 137.41bln (exp. 137.56bln); confirmed Prime membership price hikes and USD 11.8bln gain from Rivian. Shares rose 14% after-hours.