Newsquawk

Euro Market Open: WMT hit on a profit warning while AMZN lifts Prime prices; APAC mostly firmer

26 Jul 2022, 06:50 by Newsquawk Desk

APAC stocks eventually traded mostly higher; Hang Seng outperformed as Alibaba seeks a primary HK listing.
DXY declined heading into the Chinese cash open but then trimmed losses, EUR/USD saw resistance at 1.0250.
Crude futures gained overnight amid a pullback in the Dollar, spot gold was flat and base metals rose.
Walmart tumbled almost 10% after it issued a profit warning, Amazon fell in sympathy but later announced Prime subscription price hikes in Europe.
Looking ahead, highlights include US Monthly Home Prices, US Consumer Confidence, US Richmond Fed, IMF Short-term Forecasts, EU's Energy Summit, supply from Italy, and the US.
Earnings from Alphabet, Microsoft, McDonald's, General Electric, Visa, UPS, LVMH, Unilever, Michelin, UniCredit, and many more.

US stocks closed mostly higher following a late bid on Wall Street, but US equity futures fell after the bell as Walmart tumbled almost 10% after it issued its second profit warning in 10 weeks - "due to pricing actions" - with Amazon and Target slipping in sympathy.
SPX +0.12% at 3,966, NDX -0.55% at 12,328, DJIA +0.28% at 31,990, RUT +0.33 % at 1,812.
Click here for a detailed summary.

NOTABLE US HEADLINES

US President Biden says, in his view, the US is not going into a recession, via Bloomberg.
Walmart (WMT) lowered its profit outlook for Q2 and FY23 primarily due to pricing actions aimed to improve inventory levels. Net sales include currency headwinds of roughly USD 1bln in Q2. Co. Expects a USD 1.8bln headwind in H2 '22. Walmart (WMT) shares fell over 9%, Amazon (AMZN) and Target (TGT) were also hit.
Amazon (AMZN) to raise Prime subscription prices across Europe effective September 15th, according to a spokesman; price hike to be by 20% or more a year, according to Reuters. Prices will increase by 30% in Germany, 20% in the UK, and between 39-43% in Spain, Italy and France, according to Reuters.

Germany Economy Ministry denied that reduced Russian gas flows will spark a third level of energy gas emergency, according to a spokesperson.
EU member states have agreed an emergency plan to reduce the bloc's gas consumption in a bid to soften the impact of a potential total stoppage in Russian gas supplies, DPA has learned.
UN Spokesperson said the first ships to export Ukraine grain from the Black Sea ports "may move within a few days", according to Reuters.
Siemens Energy (ENR GY) said turbine transportation may start immediately; Gazprom is aware of this and Germany provided Siemens Energy with all necessary documents last week but they still need customs documents for import to Russia to be provided by Gazprom, via Reuters.
Ukrainian Infrastructure Minister says we will stop grain exports if we detect any Russian threats in the Black Sea, via Al Jazeera.
Explosions were reported in the countryside of Odessa province, southern Ukraine, according to an Al Jazeera correspondent.

US President Biden said he plans on speaking to China's President Xi this week and is still waiting to set it up, according to CNBC's Tausche.

RBNZ Governor Orr says in addition to remit review, RBNZ will also review recent performance in conducting monetary policy; will assess inflation and employment outcomes relative to targets, via Reuters.

APAC stocks took their cue from Wall Street and eventually traded mostly higher, albeit some with mild gains, after seeing mixed trade in the early hours until the Chinese open.
ASX 200 was supported by its energy and mining sectors as underlying oil and metals prices rose,
Nikkei 225 moved back toward the 27.5k mark to the downside amid currency dynamics whilst the KOSPI was kept afloat after Q2 GDP topped expectations.
Hang Seng overlooked reports that Hong Kong may have to downgrade its annual growth forecast and surged amid a boost from Alibaba rising almost 4% as it plans for a primary listing in Hong Kong, which would make it eligible for the Stock Connect programme and allow mainland Chinese investors to trade Co. shares, in turn helping increase liquidity.
Shanghai Comp posted modest gains, but the upside was capped as Shanghai added 10 high and medium-risk areas subject to lockdown.
US equity futures resumed trade subdued and held onto the mild losses throughout the APAC session. ES -0.3%.
European equity futures are indicative of a slightly flat open with the Euro Stoxx 50 future -0.1% after the cash market closed higher by 0.2% yesterday.

DXY declined heading into the Chinese cash open with the index moving closer to 106.00 to the downside, with G10 peers propped up as a result. However, the Buck trimmed losses heading into the European open.
EUR/USD extended above 1.0200 before finding resistance at 1.0250.
GBP/USD continue to climb above 1.2050 but failed to make a meaningful test of 1.2100, whilst EUR/GBP sees its 100 DMA at 0.8466.
AUD initially lagged but then found impetus as the decline in the Dollar also boosted base metal prices, with the Loonie benefiting from the rise in crude oil.
JPY-pairs remained heavy as the risk tone across the region remained cautious.
Hong Kong will “absolutely not” decouple its currency from the US dollar despite recent capital outflows and challenging China-United States ties, according to the Hong Kong Finance Chief cited by SCMP.

10yr UST futures posted mild gains while the 2yr US auction was met with solid demand but saw little reaction.
Bund futures traded relatively flat and close to but below 155.00.
10yr JGB futures took the lead from the performance in the west, with the 10yr yield relatively stable around 0.21%.
Italy's Treasury said the medium-long term bond auction scheduled for August 11th and BTPEI auction on August 25th will be cancelled due to large cash availability.

Crude futures gained overnight amid a pullback in the Dollar whilst some suggested the recession risk has now been priced in.
Spot gold saw some Dollar-induced upside and traded on either side of USD 1,725/oz.
Copper and other base metals in China resumed their grind higher, again as a function of a receding Dollar, coupled with a rosier demand profile from China following reports of a real estate fund.

Bitcoin declined overnight with prices briefly dipping under USD 21k, whilst Ethereum traded close to USD 1,400.
Coinbase (COIN) faces SEC probe over crypto listings, according to Bloomberg sources.
US House lawmakers are reportedly delaying consideration of a bipartisan bill to regulate stablecoins, according to WSJ citing sources, pushing back consideration of the measure until after Congress’ August break.

NOTABLE APAC HEADLINES

Shanghai adds 10 high and medium-risk areas subject to lockdown, according to Bloomberg.
Alibaba (9988 HK/BABA) is pursuing a primary listing on the Hong Kong exchange, expected to occur before the end of 2022; Co. will become a dual primary listed Co. on HKEX and NYSE.
Hong Kong may have to downgrade its annual growth forecast in August for the second time in three months, according to SCMP citing the finance chief.
PBoC set USD/CNY mid-point at 6.7483 vs exp. 6.7490 (prev. 6. 7543).
PBoC injected CNY 5bln via 7-day reverse repos with the maintained rate of 2.10% for a net drain of CNY 2bln

DATA RECAP