• APAC stocks mostly benefitted amid tailwinds from the tech-led surge in the US on the NVIDIA wave.
• Fed's Waller (voter) said there is no rush to begin cutting rates and it is appropriate to be patient.
• European equity futures indicate a slightly higher open with Euro Stoxx 50 future +0.1% after the cash market closed up 1.7% on Thursday.
• DXY sits just below the 104 mark, antipodeans lead, EUR/USD trades near its 200DMA @ 1.0826.
• Looking ahead, highlights include German GDP & Ifo, ECB Consumer Expectations Survey Results, Speech from ECB’s Schnabel, Supply from Italy, Earnings from Deutsche Telekom, Allianz, BASF & Standard Chartered.

US TRADE

EQUITIES

• US stocks surged with firm gains seen across the major after Nvidia's (NVDA) solid earnings and guidance propelled tech and the broader stock market, while NVDA itself saw a record performance with gains of over 16% to add USD 277bln to its value.
• SPX +2.11% at 5,087, NDX +3.01% at 18,005, DJI +1.18% at 39,069, RUT +0.96% at 2,014.
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NOTABLE HEADLINES

• Fed's Cook (voter) said she would like to have greater confidence that inflation is converging to 2% before beginning to cut the policy rate and believes risks towards achieving employment and inflation goals are moving into a better balance, while she now sees two-sided risks in considering monetary policy. Cook also stated she is weighing the risks of easing policy too soon which could keep inflation high, versus easing too late and harming the economy. Furthermore, she believes the current monetary policy stance is restrictive and sees an eventual rate cut as adjusting policy to reflect a shifting balance of risks.
• Fed's Harker (non-voter) said the Fed may be near the point of cutting rates but is unsure of when it will happen, and the greatest risk is that the Fed cuts rates too early. Harker also said he still wants more confidence that inflation is moving back to 2% and expects bumpy progress on inflation. Furthermore, Harker said the Fed can hold on rates for now and is in no rush to cut, while he added that a May rate cut is possible and will not take it off the table but it is not his current forecast, while he added a rate cut timing is possible for the second half of the year and said they are close to cutting just give them a 'couple meetings'.
• Fed's Waller (voter) said data since his last speech on January 16th reinforced his view that they need to verify inflation progress from H2 2023 will continue which means there is no rush to begin cutting rates, while it is appropriate to be patient, careful and methodical given the economy's strength and recent inflation data. Waller added the recent CPI report serves as a reminder that inflation progress is not assured and it is unclear if the CPI increase is due to seasonal factors and housing costs, or indicates more persistent inflation. Waller also said that more data is needed to determine if the January CPI increase was significant or just noise which means waiting longer before he has enough confidence that starting rate cuts will keep them on the 2% inflation path. Furthermore, he said the start of policy easing and the number of rate cuts will depend on incoming data and believes the committee can wait a little longer before easing monetary policy, as well as warned that cutting too soon could undermine inflation progress and risks considerable harm to the economy.
• Goldman Sachs pushed back its first Fed rate cut forecast to June from May and now only sees 4 cuts this year instead of 5 cuts.

APAC TRADE

EQUITIES

• APAC stocks mostly benefitted amid tailwinds from the tech-led surge in the US on the NVIDIA wave as its shares surged over 16% and its market cap increased by a record USD 277bln.
• ASX 200 finished higher with gains led by outperformance in tech, consumer stocks and financials.
• KOSPI kept afloat with South Korea to execute a record KRW 398tln budget in H1 to prop up domestic demand.
• Hang Seng and Shanghai Comp. were mixed with the tech sector facing headwinds from ongoing trade-related frictions, while the mainland was indecisive as participants digested the PBoC's liquidity injection, CSRC's denial of regulatory measures, and the latest Home Price data which showed a steeper Y/Y fall in property prices.
• US equity futures (ES +0.1%) remained afloat near their record levels after the NVIDIA-driven stock surge.
• European equity futures indicate a slightly higher open with Euro Stoxx 50 future +0.1% after the cash market closed up 1.7% on Thursday.

FX

• DXY took a breather just below the 104.00 level after the prior day's data-inspired recovery, while the recent slew of Fed commentary continued to push back against cutting rates too soon and noted more confidence of inflation returning to the target was needed.
• EUR/USD traded rangebound following the recent fluctuations and a return to around its 200DMA of 1.0826.
• GBP/USD was contained after the prior day's whipsawing and brief incursion above the 1.2700 level.
• USD/JPY lacked direction amid the absence of Japanese participants due to the Emperor's Birthday holiday.
• Antipodeans marginally strengthened amid the mostly constructive risk tone but with gains capped by a contraction in New Zealand Retail Sales and as the momentum in China waned.
• PBoC set USD/CNY mid-point at 7.1064 vs exp. 7.2008 (prev. 7.1018).

FIXED INCOME

• 10-year UST futures remained lacklustre after recent data releases including a fall in jobless claims and mixed PMI data, with prices also restricted ahead of the front-loaded auctions next week and with cash treasuries trade closed due to the holiday in Tokyo.
• Bund futures traded subdued following yesterday's fluctuations and mixed European PMIs, while participants look ahead to German Ifo data and comments from Bundesbank officials.

COMMODITIES

• Crude futures marginally pulled back after the prior day's whipsawing and mixed geopolitical headlines.
• Austria, Czech Republic, Hungary and Slovakia warned they could be forced into increasing Russian gas imports due to German levy on supplies from German storage tanks, according to FT.
• Spot gold was little changed with the recent performance a reflection of an indecisive dollar.
• Copper futures were contained as Chinese House Prices pointing to a deterioration in the troubled property sector.

CRYPTO

• Bitcoin traded rangebound and briefly tested the USD 51,000 level to the downside where support held.

NOTABLE ASIA-PAC HEADLINES

• US and China are in talks over innovative emerging market debt plans to prevent a surge in defaults.
• China has reportedly turned to private firms to hack an array of foreign governments and organisations, while files indicate China infiltrated the cyberinfrastructure and collected data of government departments in Malaysia, Thailand and Mongolia, according to FT citing a large data leak from Shanghai Anxun Information Technology.
• China's Embassy in the UK commented regarding UK sanctions on Chinese companies in which it stated that sanctions against relevant companies are 'unilateral actions that have no basis in international law' and it is firmly opposed to them, while it would like to inform the British side that any act that undermines China's interests will be resolutely countered by the Chinese side, according to Reuters.
• US export curbs on China won't extend to legacy chips which generally refers to 28-nanometer and older-generation semiconductors, according to US official cited by Nikkei.
• US lawmakers urged Volkswagen (VOW3 GY) to halt operations in Xinjiang after vehicles with Chinese components were held at US customs.

DATA RECAP

• Chinese New Home Prices MM (Jan) 0.4% (Prev. -0.5%)
• Chinese New House Prices YY (Jan) -0.7% (Prev. -0.4%)
• New Zealand Retail Sales QQ (Q4) -1.9% (Prev. 0.0%)
• New Zealand Retail Sales YY (Q4) -4.1% (Prev. -3.4%)

GEOPOLITICS

MIDDLE EAST

• Israel's army radio said the Israeli Cabinet approved sending negotiators to Gaza truce talks in Paris.
• Chinese envoy said an immediate ceasefire in Gaza is imperative and that the military offensive in Rafah must cease immediately, according to Xinhua.
• Yemen's Houthis said they targeted an islander ship in the Gulf of Aden and launched ballistic missiles and drones towards Israeli's Eilat, while it also targeted an American destroyer in the Red Sea with numerous drones.
• US charged four mariners from an Arabian sea vessel transporting suspected Iranian-made advanced conventional weapons.
• White House's Kirby said they have not seen confirmation that missiles have moved from Iran to Russia, while he warned there will be a severe response including sanctions if Iran moves ahead on missiles to Russia and there will be additional sanctions in the coming days.

OTHER

• US DoJ announced enforcement actions in five separate federal cases against sanctioned oligarchs and networks supporting Russia, while the actions include charges against Russian state-owned VTB Bank's CEO Kostin and two of his US-based facilitators.
• US diplomat Nuland said "hundreds and hundreds and hundreds" of sanctions are to be imposed on Russia in response to Navalny's death, while sanctions will target those responsible for Navalny's death, but most will target Putin's "war machine" and close the gap in the existing sanctions regime.
• China's envoy for Korean Peninsula affairs told US's North Korea affairs official that China will continue to play a constructive role in promoting the political settlement of issues concerning the Korean Peninsula and said all parties concerned should acknowledge the core of the Korean Peninsula issue, as well as address their concerns through balanced and meaningful dialogue, according to Reuters.

EU/UK

NOTABLE HEADLINES

• German government coalition may agree to suspend the debt brake for defence spending in efforts to address the Constitutional Court ruling, according to Eurasia Group's Mujtaba Rahman.

DATA RECAP

• UK GfK Consumer Confidence (Feb) -21.0 vs. Exp. -18.0 (Prev. -19.0)

Source: Newsquawk