• Asian equity markets traded mixed following a similar indecisive performance for stocks on Wall St
• Oracle (ORCL) has reportedly joined the pursuit to purchase TikTok's US operations
• In FX, the DXY further retreated below 93.00, broadly providing support to its major counterparts
• White House Chief of Staff Meadows said he has not spoken with House Speaker Pelosi in over a week regarding COVID relief
• Looking ahead highlights include US Building Permits & Housing Starts, ECB's de Guindos and supply from the UK & Germany. Earnings: Walmart, Home Depot & Persimmon 

CORONAVIRUS UPDATE

US COVID cases +41,893 (prev. +54,686) and deaths +654 (prev. +6,744), while a major newswire tally later stated that US cases increased by at least 39,105 to a total of 5.46mln on Monday and deaths rose by at least 530 to a total of 170.0k. NY COVID cases: +408 (prev. +607) and deaths +6 (prev. +6), Florida cases +2,760 (prev. 3,899) and deaths + 87 (prev. 107), while Texas cases: +7,368 (prev. +6,744) and deaths +51 (prev. +238). Elsewhere, a major newswire tally stated that California coronavirus cases increased by at least 9,197 and deaths rose by at least 96. (Newswires)

WHO said the Western Pacific region has entered a new stage of the pandemic where nations are able to minimize large-scale disruption, while it added that the pandemic is changing with 20yr, 30yr and 40yr age groups increasingly driving the spread. (Newswires)

More than 70 workers have tested positive for COVID-19 at a Nottinghamshire dessert factory in UK which supplies major grocery retailers, while all 1600 workers are to be tested. (The Guardian)

German COVID-19 cases rose by 1,693 - the largest increase since April 25th. (Newswires)

ASIA

Asian equity markets traded mixed following a similar indecisive performance for stocks on Wall St amid a lack of fresh developments on the macro front and with participants tentative ahead of the risk events later in the week. ASX 200 (+0.9%) and Nikkei 225 (-0.3%) were varied with Australia kept afloat by strength in healthcare, tech and metal miners as gold made its way back closer towards the USD 2000/oz level, although gains were capped for the index by disappointing earnings with financials pressured after Westpac scrapped its dividend citing a highly uncertain outlook and BHP shares were subdued by weaker results. Furthermore, consumer staples suffered after Coles reported a slump in pre-tax profits and with Treasury Wine Estates the worst performing stock due to China launching anti-dumping investigations on imports of Australian wine. Conversely, the Japanese benchmark was negative with exporters hampered by a stronger currency, while Hang Seng (+0.3%) and Shanghai Comp. (+0.4%) remained positive after the PBoC continued its liquidity efforts and with Hong Kong set to announce a 3rd round of COVID-19 relief, although tensions persisted as reports suggested the delay in trade review talks was likely due to a lack of atmosphere and the US also recently tightened restrictions on Huawei's access to US technology and semiconductors. Finally, 10yr JGBs were higher amid weakness in Japanese stocks and following the gains seen in T-notes, but with further gains restricted by mostly weaker results at the 30yr JGB auction in which the bid to cover and accepted prices declined from prior.

PBoC injected CNY 100bln via 7-day reverse repos at rate of 2.20% for a net daily injection of CNY 50bln

PBoC set USD/CNY mid-point at 6.9325 vs. Exp. 6.9309 (Prev. 6.9362)

Hong Kong is to launch a 3rd round of coronavirus relief, according to reports citing Hong Kong Chief Executive Lam. (Newswires)

China MOFCOM launched anti-dumping investigation on imports of Australian wine. (Newswires)

Oracle (ORCL) has reportedly joined the pursuit to purchase TikTok's US operations, while reports noted that the Co. was seriously contemplating acquiring TikTok's US, Canada, Australia and New Zealand operations and was working with a group of US investors which already own a stake in ByteDance. (FT) 

UK/EU

Diplomats from Austria, Sweden, Denmark and the Netherlands (Frugal Four) are pushing for a 2% deflator to be applied to the rebates won during the Recovery Fund negotiations. Southern and Eastern member states are resisting the demand - one EU diplomat said there is no consensus on the deflator. (FT)

FX

The DXY remained pressured and retreated further beneath 93.00, to the benefit of its major counterparts with EUR/USD making its way back towards 1.1900 and its 2-year highs, while GBP/USD broke out of Monday’s range to gain a firmer footing at the 1.3100 handle and USD/CHF printed a 5½-year low. Elsewhere, USD/JPY relinquished 106.00 status due to the USD-woes coupled with the haven flows into JPY, while antipodeans are varied with AUD/USD flat in the wake of an unsurprising RBA Minutes release in which the RBA reiterated the accommodative approach will be maintained for as long as necessary and NZD/USD marginally weakened after ANZ Bank added to the increasing forecasts for the RBNZ to lower rates to -0.25% in April next year.

RBA Minutes from the August 4th meeting stated that accommodative approach will be kept for as long as necessary and 3yr yield target will be maintained until there is progress towards full employment and inflation. Members also noted the downturn was not as severe as earlier anticipated and a recovery was underway for most of Australia but added that the recovery is likely to be slower than expected. Furthermore, it stated it is likely that fiscal and monetary support will be required for some time and that there is no need to adjust package of measures in current environment, although board agreed to continue to assess the evolving situation and did not rule out adjustments if circumstances warranted. (Newswires)

Canadian Finance Minister Morneau has announced his decision to resign. (Radio Canada).

COMMODITIES

WTI crude futures consolidated after yesterday’s gains where it briefly eyed USD 43.00/bbl to the upside. Nonetheless, further advances were restricted by the somewhat indecisive risk tone and with participants awaiting the latest stockpile reports beginning with the private sector inventories later today, as well as the OPEC+ JMMC on Wednesday, while it is also worth noting that WTI September options expired yesterday, ahead of the futures contract expiring this Friday. Elsewhere, gold eked mild gains amid USD weakness with the precious metal eyeing a retest of the USD 2000/oz level and copper traded sideways overnight due to the slightly mixed risk sentiment.

OPEC+ JTC draft report noted oil pact July compliance at 95% (97% including Mexico), while JTC considered a scenario of substantial downside risk on demand if COVID-19 worsened. (Newswires)

EIA rig productivity report stated that total shale regions oil production in September is seen down 20k BPD at 7.557mln BPD (vs +238k in August). (Newswires)

US

The belly led Treasury yields lower to start the week in what appeared to be a healthy pullback after last week’s sell-off. By settlement, 2s unch. at 15bps, 10s -3bps at 48bps, and 30s -2bps at 142bps. The macro backdrop was little changed on Monday compared to where it left on Friday. After the heavy supply slate that sent yields higher last week (10s and 30s made highs of 73bps and 145bps, respectively), Monday’s action appeared to be price discovery in efforts to establish near-term ranges. While the belly has led the paring of the losses, the long-bond remains relatively nearer to its recent lows, likely owing to the approaching 20-year Bond auction on Wednesday, following the sour taste left in mouths from the 30-year Bond auction last Thursday. Yesterday’s tape action saw the complex richen overnight and into the US session, bolstered by the disappointing NY Empire Manufacturing survey; reports noted that algo buy programmes emerged as the 10-year descended through 67bps, however, there were plenty of CTAs and dealers reported on the other side preventing a richening as pronounced as the cheapening seen last week. The corporate pipeline was fairly congested today, including a USD 6.5bln 5-parter from ICE, as well as a handful of other chunky deals, which coincided with USTs paring their gains into settlement.

US President Trump said he will create tax credits for companies that bring jobs back from China and will strip Federal contracts from companies that outsource critical industries. (Newswires)

White House Chief of Staff Meadows said he has not spoken with House speaker Pelosi in over a week regarding COVID relief and he is not expecting another call with Pelosi, while there were separate comments from House Speaker Pelosi that she expects bipartisan support for the Democratic house bill for the post service. (Newswires/)

US Senate Republicans are planning to propose a slimmed down relief bill which is expected to include USD 10bln for the USPS and USD 300 in boosted unemployment benefits till December 27th. (Politico)