Observations + Charts
Europe extending losses while US futures are in the red but off the lows.
Asia lower again across the region on course for their worst week since August.
SHCOMP dropped below key level of 3k, HSI fell for third day, hovering near YTD lows, MSCI Asia ex Japan reached new 52-week low.
Overnight losses in the US not helping w/Nasdaq's underperformance mirrored in the tech-linked regional indexes.
Greater China indexes lower again despite the last PBOC record cash injection.
Foreign fund outflow also persist – not helping the shift in sentiment.
NKY& TPX 2nd d of decline with all eyes focused on USDJPY.
Europe lower following the US & Asia, yet off worst levels. SXXP = 4th d of declines in a row.
Market narrative highlighted bond market reactions to Fed Chair Powell's comments with 10y yield just short of 5% at a 16-year high and 2y notably lower.
Macro focus on UK retail sales weakness and deterioration in GfK consumer confidence.
German PPI data playing into disinflationary theme, though increasing worries over upside inflation risk from higher oil prices.
Earnings- results in the auto, food and H/C highlight the prospect of an eco downturn, high expectations for defensives and slowing consumer.
EU Cyclicals -90bps so far, EU quality +55bps up for a 3rd d in contrast. Basket is up +550bps since Sept lows.
Luxury names in the red not helped by Asia/L’Oreal comments and SFER nos. BC +488bps an exception.
H/C(SXDP) snaps 5d of decline up a small 11bps. Basic Resources & Travel (IHG -330bps) lagging the region.
DXY unch. Bent +130bp amid Middle East concerns. US nat gas unch while +260bp in Europe. Copper -75bp while iron ore -120bp. Bitcoin +350bp to ~$29.7K while gold +50bp.
US futures lower w/ESZ3 -10.25, HIWZ3 -69.00, RTYZ3 -5.00 and NQZ3 -47.00.