• European bourses have been choppy throughout the session, moving between modest gains and losses despite a lack of fresh fundamental drivers
• DXY continues to climb printing 107.79 at best, to the detriment of peers & commodities; before backing off modestly
• USTs are steady pre-NFP while Bunds have been somewhat choppy, but generally relatively contained
• Fresh fundamentals have been limited for commodities, and focused on familiar themes, downside in wake of mentioned USD upside
• Former Japanese PM Abe has died following the earlier shooting during a speech in Nara, via NHK.
• Looking ahead, highlights include US & Canadian Labour Market Reports, Speeches from ECB's Lagarde & Fed's Williams

As of 11:20BST/06:20ET

LOOKING AHEAD

• US & Canadian Labour Market Reports, Speeches from ECB's Lagarde & Fed's Williams.
• Click here for the Week Ahead preview.

GEOPOLITICS

RUSSIA-UKRAINE

• Chinese Foreign Minister Wang met with Russian Foreign Minister Lavrov and Wang vowed to promote peace talks on Ukraine. Wang also stated that China and Russia have maintained normal cooperation in various fields and cast aside interferences, while he added that bilateral relations between their countries show strong resilience and strategic resolve, according to Reuters.
• Indonesian Foreign Minister hopes that G20 discussions will find ways to move on and noted that ripple effects from the Ukraine war are being felt globally, while she added it is their responsibility to end the war sooner rather than later, according to Reuters.
• Ukrainian Energy Minister said Ukraine opposes Canada handing over a gas turbine to Russia's Gazprom for the Nord Stream 1 pipeline and that it would flout sanctions imposed on Russia, according to Reuters citing a letter.
• Russian Kremlin says they will increase gas supply to Europe, if Canada returns the Nord Stream 1 turbine, via Reuters; subsequently, German Gov't spokesperson says they have received a positive signal from Canada re. delivery of the Siemens (SIE GY) Nordstream 1 turbine, but cannot say it has been delivered.
• Russian Foreign Minister Lavrov walked out on German Foreign Baerbock during a G20 plenary, according to Reuters citing an official; additionally, Lavrov did not partake in the second plenary session on food security.

OTHER

• Fitch downgraded Belarus to C from CCC after the Finance Ministry said payments due in dollars on Eurobonds will be transferred to Belarussian rubles, according to Reuters.
• US State Department spokesperson Kirby said the US is exploring the integration of air defences with Middle East nations amid "growing Iranian threat", according to AFP.

EUROPEAN TRADE

CENTRAL BANKS

• ECB says the top 41 banks would suffer credit and market losses of at least EUR 70bln from higher carbon prices, floods and droughts; just 20% consider climate risk as a variable when granting loans.
• ECB's Visco says a hike larger than 25bps could be appropriate in September if medium-term inflation expectations do not improve. IT/GE 10yr spread peak of 250bps in early June was not consistent with economic fundamentals. Comments were essentially in-fitting with existing ECB guidance and his recent remarks.

EQUITIES

• European bourses have been choppy throughout the session, moving between modest gains and losses despite a lack of fresh fundamental drivers; Euro Stoxx 50 -0.1%.
• US futures have been steadier, consistently posting modest losses, ES -0.3%, going into the BLS release.
• Sectoral performance is mixed, with Energy modestly outperforming while the likes of Basic Resources lag amid base metal pricing in wake of renewed USD strength.
• China's CPCA says 1.97mln passenger cars were sold in June (prev. 1.37mln in May); Tesla (TSLA) sold 78,906 China-made vehicles in June (prev. 32,165 in May), via Reuters.
• Acer (2553 TW) June sales +3.1% YY; H1 -0.4% YY. Q2 prelim. revenue TWD 72.35bln, -9.3% YY.
• Click here for more detail.

FX

• DXY breaches final 2002 hurdle on the way through 107.500 ahead of NFP with upward impetus from weakness in several index components and other Dollar counterparts, index to reaches 107.790 before waning.
• Yen bucks broad trend following fatal shooting of ex-Japanese PM Abe at pre-election campaign event, USD/JPY capped around 136.00.
• Sterling slides after short-lived reprieve from political upheaval, Cable holds in low 1.1900 area after 1.2050+ pop.
• Euro extends declines before finding some technical props; EUR/USD back on 1.0100 handle vs 1.0072 low in line with a key Fib retracement level.
• Loonie loses recovery momentum in the run up to Canadian LFS and US BLS showdown, USD/CAD around 1.3000 within 1.3025-1.2953 range.
• Aussie and Kiwi unable to resist latest Greenback advances, but underpinned by partial rebound in some commodities; AUD/USD tests support into 0.6800 from circa 0.6861 peak, NZD/USD hovers around 0.6150 from high just shy of 0.6200.
• Lira laments latest CBRT survey showing further rise in end 2020 Turkish CPI and USD/TRY forecasts, latter now up to 18.9881 vs current 17.3200 spot price.
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Notable FX Expiries, NY Cut:

• USD/JPY: 133.50 (355M), 134.00 (559M), 135.00 (1.2BN)
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FIXED INCOME

• Bonds relatively becalmed awaiting US and Canadian employment data double-header.
• Bunds, Gilts and T-note all rangy between 151.17-150.42, 115.63-12 and 118-20/08 parameters.
• UK debt lagging sub-par in the hiatus before a new Tory leader and PM is appointed and this also weighing on the underperforming Sonia strip.
• Italian Economy Minister Franco says he is confident that market conditions will stabilize and domestic bond yields will fall to reflect fundamentals.
• Click here for more detail.

COMMODITIES

• Fresh fundamentals have been somewhat limited and focused on familiar themes; however, commodities broadly are dented amid renewed and pronounced USD upside.
• Crude posts losses of less than USD 1/bbl in comparison to the sizeable USD 16/bbl ranges seen this week.
• Kuwait set August KEC crude OSP for Asia at Oman/Dubai + USD 7.15/bbl, according to Reuters.
• UK's CMA says there is cause for concerns in some parts of the road fuel market.
• Spot gold is in-fitting, modestly softer but essentially unchanged on the session given the sizeable recent moves and near USD 100/oz weekly parameters.
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NOTABLE US HEADLINES

• US Senate Majority Leader Schumer is seeking an all-senators classified briefing next week regarding semiconductor chips and the global tech race, according to a spokesman cited by Reuters.
• Click here for the US Early Morning note.

CRYPTO

• Coinbase says its currently investigating an issue with US bank account instant withdrawals, according to its status page.

APAC TRADE

EQUITIES

• APAC stocks were higher across the board as the region took impetus from Wall St's fourth consecutive win streak, but with gains capped heading into the NFP jobs data.
• ASX 200 was led higher by the energy sector and amid hopes of thawing Australia–China relations.
• Nikkei 225 traded positive but pared a majority of its gains following the shooting of former PM Abe.
• Hang Seng and Shanghai Comp. kept afloat amid stimulus hopes with China reportedly considering USD 220bln of stimulus although gains were capped in the mainland amid weakness in the property sector and after Chinese Premier Li noted China's economy is recovering but the foundation was not yet solid.

NOTABLE APAC HEADLINES

• China's military said it is conducting a military exercise around Taiwan and US support for Taiwan 'separatist forces' is futile which will only disturb the peace in the Taiwan Strait, according to state media.
• China Defence Ministry said China firmly opposes the visit by a US senator to Taiwan which severely damages the relationship of the two countries and two militaries, while it added that the drill near Taiwan is directed at US and Taiwan provocation, according to Reuters.
• Former Japanese PM Abe has died following the earlier shooting during a speech in Nara, via NHK.

DATA RECAP

• Japanese All Household Spending MM (May) -1.9% vs. Exp. 0.8% (Prev. 1.0%); YY (May) -0.5% vs. Exp. 2.1% (Prev. -1.7%)