• APAC stocks eventually traded mixed heading into month-end and despite the early momentum from the positive close on Wall St.
• European equity futures are indicative of a flat open with the Euro Stoxx 50 Unch. after the cash market closed up 1.7% yesterday.
• DXY is a tad firmer but remains sub-105, antipodeans lag, Cable maintains 1.20 status.
• Northern Ireland DUP Leader Donaldson said they will now assess proposed Brexit arrangements against its seven tests.
• Looking ahead, highlights include French & Spanish Prelim. CPI, Swiss KOF, Canadian GDP, US Chicago PMI, Consumer Confidence, Fed Discount Rate Minutes, International Energy Week (1/3), Speeches from BoE's Pill, Cunliffe & Fed's Goolsbee, Supply from Netherlands & Germany.

US TRADE

EQUITIES

• US stocks were positive but finished off highs as participants digested mixed data releases including a wider-than-expected contraction in US Durable Goods but Pending Home Sales topped forecasts. Outperformance was seen in the Nasdaq as the tech-heavy index found support from the move lower in US rates and amid strength in Tesla which gained over 5% on reports that its German plant hit a weekly production level of 4,000 three weeks ahead of schedule.
• SPX +0.31% at 3,982, NDX +0.74% at 12,057, DJI +0.22% at 32,889, RUT +0.31% at 1,896.
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NOTABLE HEADLINES

• US Treasury Secretary Yellen said 'so far, so good' in the US inflation battle, according to a CNN interview.

APAC TRADE

EQUITIES

• APAC stocks eventually traded mixed heading into month-end and despite the early momentum from the positive close on Wall St where risk sentiment benefitted as yields softened amid mixed data.
• ASX 200 was led by strength in the mining-related industries and after mostly encouraging data releases including a stronger-than-expected rebound in retail sales.
• Nikkei 225 initially gained amid the upper house confirmation hearings where the BoJ Deputy nominees reiterated the need to continue monetary easing, although the gains were gradually pared as participants also digested mixed data including the largest monthly decline in industrial production in 8 months.
• Hang Seng and Shanghai Comp. failed to sustain opening advances despite a substantial liquidity injection and reports the White House is scaling back plans to regulate US investments in China.
• US equity futures were little changed (ES Unch.) overnight amid the flimsy risk tone in Asian peers.
• European equity futures are indicative of a flat open with the Euro Stoxx 50 Unch. after the cash market closed up 1.7% yesterday.

FX

• DXY regained composure after the prior day’s data-induced losses which almost completely wiped last Friday’s gains and dragged the dollar back below the 105.00 level.
• EUR/USD retraced some of its recent advances after failing to sustain the 1.0600 handle.
• GBP/USD held on to most of the gains from yesterday's outperformance amid Brexit-related optimism after the UK and EU reached an agreement in principle on Northern Ireland trade.
• USD/JPY lacked firm direction after the mixed data from Japan and as the BoJ Deputy Governor nominees reiterated the need to continue monetary easing.
• Antipodeans were choppy with AUD/USD only briefly supported following the mostly better-than-expected data releases.
• PBoC set USD/CNY mid-point at 6.9519 vs exp. 6.9515 (prev. 6.9572)

FIXED INCOME

• 10yr UST futures were rangebound but held on to most of the prior day’s data-fuelled gains.
• Bund futures remained despondent following the recent selling pressure and with prices not helped as eurozone inflation expectations remained at 9-month highs.
• 10yr JGB futures were underpinned amid mixed data and dovish reiterations from the BoJ Deputy nominees, while the 2yr JGB auction results eventually showed firmer demand after being delayed due to administrative procedural issues.

COMMODITIES

• Crude futures lacked firm direction after the recent choppy performance and absence of catalysts.
• Japan plans to emphasise the importance of investments into natgas, LNG, hydrogen and ammonia during its G7 presidency, according to a METI official.
• Freeport LNG submitted a request to the US FERC for authorisation to progress to full commercial operations of train 1 and phase 1 of its Texas plant.
• Spot gold was uneventful with the precious metal restricted as the dollar regained composure.
• Copper futures failed to sustain early momentum and returned flat to test support at USD 4/lb.

CRYPTO

• Bitcoin traded rangebound with price action contained by resistance at the 23,500 level.

NOTABLE ASIA-PAC HEADLINES

• PBoC injected CNY 481bln via 7-day reverse repos at 2.00% for a CNY 331bln net injection.
• White House is scaling back plans to regulate US investments in China with US President Biden expected to forego expansive new restrictions on American investment in China, according to Politico.
• White House gave federal agencies 30 days to ensure they have TikTok bans on federal devices and systems, while it directed federal agencies to adjust contracts to ensure IT vendors keep US data safe by eliminating the use of TikTok on devices and systems, according to Reuters.
• BoJ Deputy Governor nominee Uchida reiterated that the BoJ needs to continue monetary easing for the time being to support the economy and shouldn't review easy monetary policy just because there are side effects. Uchida added the BoJ will conduct policy flexibly and will firmly continue monetary easing to lay the ground for companies to raise wages, while he added that it is too early to seek an exit from monetary stimulus and that widening the yield target band itself would weaken effects of easing.
• BoJ Deputy Governor nominee Himino said NIRP has negative impacts on financial institutions' profits and that they must be mindful of the impact to banks from negative rates but the focus now should be on keeping easy policy to support the economy. Himino stated that if conditions fall in place for BoJ to exit easy policy, that would be good for both the public and banks but added that the best approach is to support the economy with easy policy until inflation can achieve the BoJ's price target excluding the impact of import price increases.

DATA RECAP

• Japanese Industrial Production MM (Jan P) -4.6% vs. Exp. -2.6% (Prev. 0.3%)
• Japanese Retail Sales YY (Jan) 6.3% vs. Exp. 4.0% (Prev. 3.8%)
• Australian Current Account Balance (AUD)(Q4) 14.1B vs. Exp. 6.5B (Prev. -2.3B)
• Australian Net Exports Contribution (Q4) 1.1% vs. Exp. 1.3% (Prev. -0.2%)
• Australian Retail Sales MM Final (Jan) 1.9% vs. Exp. 1.5% (Prev. -3.9%)
• New Zealand ANZ Business Outlook (Feb) -43.3% (Prev. -52.0%)
• New Zealand ANZ Own Activity (Feb) -9.2% (Prev. -15.8%)

GEOPOLITICS

• US State Department said China has been anything but an honest broker in the Ukraine-Russia peace effort and said the fact that China is engaging with the leader of Belarus is another example of how Beijing is deepening engagements with Russia.
• Kremlin spokesperson Peskov said Russia will not resume participation in START talks until Washington listens to Moscow's position, while he added that NATO no longer acts as Russia's conditional opponent but as an enemy.
• Russian Defence Ministry said the US is planning provocation in Ukraine using toxic chemicals, according to TASS.

EU/UK

• Northern Ireland DUP Leader Donaldson said they will now assess proposed arrangements against its seven tests and this will determine whether the deal restores Northern Ireland's place within the UK, while Donaldson also noted the key question in Northern Ireland deal is the application of EU law.
• ECB's Vujcic said markets are right to price in 50bps for the March meeting and rate decisions are to be made on a meeting-by-meeting basis, while he added that the ECB's role is not to say where the terminal rate should be, according to Bloomberg TV.

DATA RECAP

• UK Lloyds Business Barometer (Jan) 21 (Prev. 22)