Newsquawk

Europe Market Open: AUD lags post-CPI while markets digest numerous heavyweight earnings

26 Jul 2023, 06:35 by Newsquawk Desk

APAC stocks traded mixed with most bourses lacking firm direction heading into the FOMC later today.
European equity futures are indicative of a softer open with the Euro Stoxx 50 -0.4% after the cash market closed up by 0.2% yesterday.
DXY was contained on a 101 handle, EUR/USD languished below 1.11, Cable eyes 1.29, AUD soft post-CPI.
Softer-than-expected inflation data from Australia supported the argument for the RBA to continue its pause on rates at next week’s meeting.
Looking ahead, highlights include US New Home Sales, FOMC Policy Announcement and Fed Chair Powell's Press Conference, Earnings from Porsche AG, Santander, Danone, Deutsche Bank, Stellantis, Equinor, Airbus, GSK, Lloyds, Boeing, Meta & Coca-Cola.

US stocks were mostly positive with the Nasdaq 100 leading the gains as semiconductors were aided by NXPI results and futures also reacted after-hours to earnings from the likes of Alphabet, Microsoft, Snap and Texas Instruments. Nonetheless, the gains in the broader market were limited on the eve of the FOMC and the Russell 2000 lagged alongside regional banks on the back of the PacWest merger takeover announcement.
SPX +0.28% at 4,567, NDX +0.73% at 15,561, DJIA +0.08% at 35,438, RUT +0.02% at 1,966.
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NOTABLE HEADLINES

Alphabet Inc (GOOGL) Q2 2023 (USD): EPS 1.44 (exp. 1.34), Revenue 74.60bln (exp. 72.82bln); +6.1% after-market.
Microsoft Corp (MSFT) Q4 2023 (USD): EPS 2.69 (exp. 2.55), Revenue 56.2bln (exp. 55.47bln); -3.7% after-market.
Snap Inc (SNAP) Q2 2023 (USD): Adj. EPS -0.02 (exp. -0.04), Revenue 1.07bln (exp. 1.05bln); -19.3% after-market.
Texas Instruments Inc (TXN) Q2 2023 (USD): EPS 1.87 (exp. 1.76), Revenue 4.53bln (exp. 4.36bln); -3.5% after-market.
Visa Inc (V) Q3 2023 (USD): EPS 2.16 (exp. 2.12), Revenue 8.1bln (exp. 8.06bln); -0.4% after-market.

See our headline feed for more details

APAC stocks traded mixed with most bourses lacking firm direction heading into the looming major central bank policy decisions beginning with the FOMC later today.
ASX 200 outperformed with gains led by the mining industry and the top-weighted financials sector, while participants also reflected on the mostly softer-than-expected inflation data which showed headline CPI Q/Q was at its slowest pace of increase since 2021.
Nikkei 225 swung between gains and losses with the mood indecisive as softer Services PPI data from Japan added to the second-guessing surrounding this week’s BoJ meeting.
Hang Seng and Shanghai Comp were weaker after the prior day’s stimulus boost lost steam but with downside limited owing to wide expectations for further support measures and after the PBoC upped its liquidity efforts, while China also replaced the head of its central bank amid the increasing challenges facing its economy.
US equity futures were contained overnight as participants digested the latest big tech earnings and guidance.
European equity futures are indicative of a softer open with the Euro Stoxx 50 -0.4% after the cash market closed up by 0.2% yesterday.

DXY was stuck within a tight range as participants await the FOMC meeting where the Fed is widely expected to raise rates by 25bps which markets expect will be the final hike of the current cycle.
EUR/USD languished firmly beneath the 1.1100 handle following this week’s bout of weak data from Europe.
GBP/USD slightly eased back from yesterday’s peak and brief roundtrip into the 1.2900 territory.
USD/JPY was indecisive and traded on both sides of the 141.00 level amid pre-BoJ tentativeness.
Antipodeans were pressured alongside a weaker yuan and after softer-than-expected inflation data from Australia supported the argument for the RBA to continue its pause on rates at next week’s meeting.
PBoC set USD/CNY mid-point at 7.1295 vs exp. 7.1341 (prev. 7.1406)

10yr UST futures mildly rebounded from the recent bear flattening which was spurred by strong consumer confidence data and a lacklustre 5yr auction, while the focus turns to the approaching FOMC policy decision.
Bund futures were uneventful but kept afloat after the recent tailwinds from the weak German Ifo data.
10yr JGB futures ultimately benefitted after softer Services PPI data and the BoJ’s presence in the market for nearly JPY 1.5tln of JGBs on top of its daily fixed-rate operations.

Crude futures pulled back following yesterday's stimulus-driven advances with slight pressure from the bearish private sector inventory data which showed a surprise build in crude and narrower gasoline drawdown.
US Energy Inventory Data (bbls): Crude +1.3mln (exp. -2.0mln), Gasoline -1.0mln (exp. -2.0mln), Distillate +1.6mln (exp. -0.1mln), Cushing -2.3mln.
TC Energy's (TRP) Columbia Gas Transmission declared a force majeure on ‘Line VB’ due to an unplanned event near Strasburg, Virginia and physical deliveries to the Loudoun LNG interconnect were impacted.
Spot Gold traded flat alongside an uneventful greenback in the pre-FOMC twilight.
Copper futures were lacklustre after the recent stimulus-related momentum in China wore thin.

Bitcoin traded rangebound amid the mostly cautious mood across conventional risk assets.

NOTABLE ASIA-PAC HEADLINES

China’s Foreign Minister urged to uphold multilateralism and preserve the multilateral system with the UN at its core and resist unilateralism and hegemonic practice. He also said efforts should be made to resolve differences through dialogue, while acts of decoupling and double standards are opposed.
US Secretary of State Blinken said he expects to work well with new Chinese Foreign Minister Wang Yi, while it was separately reported that Japanese Chief Cabinet Secretary Matsuno said he wants to closely communicate on various levels with China including with Foreign Minister Wang Yi.

DATA RECAP

Australian CPI QQ (Q2) 0.8% vs. Exp. 1.0% (Prev. 1.4%)
Australian CPI YY (Q2) 6.0% vs. Exp. 6.2% (Prev. 7.0%)
Australian RBA Trimmed Mean CPI QQ (Q2) 0.9% vs. Exp. 1.1% (Prev. 1.2%)
Australian RBA Trimmed Mean CPI YY (Q2) 5.9% vs. Exp. 6.0% (Prev.
Australian RBA Weighted Median CPI QQ (Q2) 1.0% vs. Exp. 1.1% (Prev. 1.2%)
Australian RBA Weighted Median CPI YY (Q2) 5.5% vs. Exp. 5.4% (Prev. 5.8%)
Australian Weighted CPI YY (Jun) 5.40% vs. Exp. 5.40% (Prev. 5.60%)

Russian President Putin is to visit China in October and a visit to Turkey is also in both countries' plans, although no firm date has been agreed yet, according to TASS.
Chinese Defense Ministry said China and Russia will soon hold their third joint naval patrol in the western and northern parts of the Pacific Ocean which is not aimed at any third party or related to global or regional situations, according to Global Times.

NOTABLE HEADLINES

London Mayor Khan urged the UK government to provide more funding to finance a more generous scrapping scheme for older cars affected by his plan to widen the Ultra Low Emission Zone to the entire capital, according to FT.