- US stocks reversed some of the DeepSeek downside and equity futures were bid throughout the majority of the session with upside in tech as Nvidia (NVDA) regained some of Monday's historic losses although still has some ground to cover to completely retract the move. Elsewhere, T-notes settled in red but were very choppy in response to risk sentiment, tariff commentary and auctions, while the dollar caught a bid on Trump's recent tariff remarks.
- USD was firmer and pared some of Monday's losses with the dollar helped by tariff rhetoric with President Trump wanting universal tariffs much larger than 2.5% and has a tariff level in mind but not set it yet, while data releases were mixed and garnered little reaction with participants now looking ahead to the FOMC on Wednesday.
- Looking ahead, highlights include Australian CPI, Japanese Household Confidence, BoJ Minutes from the December Meeting, Supply from Japan, Holiday Closures in China, Hong Kong, South Korea, Taiwan, Singapore, Malaysia, Indonesia, Philippines & Vietnam.
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LOOKING AHEAD
- Highlights include Australian CPI, Japanese Household Confidence, BoJ Minutes from the December Meeting, Supply from Japan, Holiday Closures in China, Hong Kong, South Korea, Taiwan, Singapore, Malaysia, Indonesia, Philippines & Vietnam.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks reversed some of the DeepSeek downside and equity futures were bid throughout the majority of the session with upside in tech as Nvidia (NVDA) regained some of Monday's historic losses although still has some ground to cover to completely retract the move. Elsewhere, T-notes settled in red but were very choppy in response to risk sentiment, tariff commentary and auctions, while the dollar caught a bid on Trump's recent tariff remarks.
- SPX +0.92% at 6,067, NDX +1.59% at 21,463, DJIA +0.31% at 44,850, RUT +0.04% at 2,284.
- Click here for a detailed summary.
NOTABLE HEADLINES
- US House Minority Leader Jeffries will hold an emergency meeting on Wednesday to respond to the spending pause by President Trump.
- White House said the February 1st date for tariffs on Canada and Mexico still holds, while there is no specific date for tariffs on steel and copper.
- Mexico and Canada launched a flurry of border measures to appease US President Trump in which the tariff threat spurs Mexico to fill in the smuggling tunnel and Canada to deploy helicopters and drones, according to FT.
DATA RECAP
- US Consumer Confidence (Jan) 104.1 vs. Exp. 105.6 (Prev. 104.7)
- US Durable Goods (Dec) -2.2% vs. Exp. 0.6% (Prev. -1.2%, Rev. -2.0%)
- US Non-defence Cap Ex-Air (Dec) 0.5% vs. Exp. 0.3% (Prev. 0.4%, Rev. 0.9%)
- US Durables Ex-Transport (Dec) 0.3% vs. Exp. 0.4% (Prev. -0.2%)
- US Rich Fed Comp. Index (Jan) -4.0 (Prev. -10.0)
- US Rich Fed Manufacturing Shipment (Jan) -9.0 (Prev. -11.0)
- US Rich Fed Services Index (Jan) 4.0 (Prev. 23.0)
- US CaseShiller 20 MM SA (Nov) 0.4% vs. Exp. 0.3% (Prev. 0.3%, Rev. 0.4%)
- US CaseShiller 20 YY NSA (Nov) 4.3% vs. Exp. 4.3% (Prev. 4.2%)
FX
- USD was firmer and pared some of Monday's losses with the dollar helped by tariff rhetoric with President Trump wanting universal tariffs much larger than 2.5% and has a tariff level in mind but not set it yet, while data releases were mixed and garnered little reaction with participants now looking ahead to the FOMC on Wednesday.
- EUR softened on the the day and spent most of the session trading sideways at the 1.0400 handle with very little catalysts to spur the single currency.
- GBP remained subdued owing to the stronger greenback and with this week's UK data calendar fairly sparse.
- JPY gave back some of the prior day's haven-related spoils with USD/JPY firmly above the 155.00 level amid a recovery in the dollar and risk sentiment.
FIXED INCOME
- T-notes choppy in the aftermath of the DeepSeek tech sell-off, tariff commentary, auctions and data.
COMMODITIES
- Oil prices gained in what was a choppy session but recovered some of Monday's losses as risk sentiment improved.
- Private inventory data expectations (bbls): Crude +2.9mln (exp. +3.2mln), Distillate -3.8mln (exp. -2.3mln), Gasoline +1.9mln (exp. +1.3mln) Cushing -0.1mln.
- Protestors halted oil loading operations at Libya's Ras Lanuf port but later decided to temporarily allow oil ports to re-open and will be providing the NOC with a two-week deadline to implement their demands following on from a meeting between the protestors and the NOC Chairman.
- Libya's NOC said operations at all oil terminals are continuing normally and production and exports are going as planned.
- Russia's Kremlin said Russia is interested in the continuation of gas transit via Ukraine.
- Slovakia’s PM Fico is to meet European Commission officials on Thursday in Brussels to discuss gas transit.
GEOPOLITICAL
MIDDLE EAST
- US President Trump's Middle East envoy Steve Witkoff met with a senior adviser to Palestinian president Mahmoud Abbas in Riyadh, according to Axios.
- Iran’s Foreign Minister said if Iran's nuclear facilities are attacked, it will be answered immediately and decisively, according to Sky News Arabia.
- A Hong Kong-flagged container ship was reportedly on fire off north-west of Hodeidah, Yemen, during a voyage northbound towards the Suez Canal, according to Diaplous Maritime Services.
RUSSIA-UKRAINE
- Russian President Putin said they will allocate appropriate people if Ukraine wants to negotiate with Russia and there is a legal way to do it if Ukraine wants to negotiate, but he does not see any desire to negotiate.
- EU's Kallas spoke with US Secretary of State Rubio to discuss shared foreign policy priorities and they agreed on the necessity of maintaining maximum pressure on Moscow to move towards a just and sustainable peace in Ukraine. Kallas also emphasised Europe's increasing investment in defence and readiness to take on greater responsibility, alongside the importance of diversifying energy supplies.
ASIA-PAC
NOTABLE HEADLINES
- New Zealand Finance Minister Willis said a return to growth cannot be taken for granted and the 2025 budget will be modest and disciplined for New Zealand which will be delivered on May 22nd.
- India is set to invest nearly USD 2bln to develop the critical minerals sector, according to Reuters sources.
EU/UK
NOTABLE HEADLINES
- UK PM Starmer requested that the relinking of the UK and EU emissions trading scheme is on the agenda for spring talks, according to FT citing EU officials.
- Italian PM Meloni is under investigation for embezzlement in which she had been placed under judicial investigation over her country's surprise release of a Libyan police officer wanted by the International Criminal Court.
