• European bourses are firmer across the board, as initial jittery performance dissipated with participants looking to US data and Fed speak.
• US futures are in the green, but only modestly so, and have been relatively contained awaiting further guidance from upcoming Fed officials on the 75bp/100bp discussion.
• DXY continues to pullback with peers mixed as EUR consolidates and AUD underperforms
• Core debt pulls back from initial peaks though yields remain under pressure after less-hawkish Fed commentary, prompting re-steepening
• Crude benchmarks firmer, but awaiting details from the upcoming Saudi-Biden meeting
• Looking ahead, highlights include US NY Fed Manufacturing, Retail Sales, IP & Uni. of Michigan (Prelim.), Speech from Fed's Bostic, Bullard & Daly. Earnings from Citi & Wells Fargo.

As of 11:25BST/06:25ET

LOOKING AHEAD

• US NY Fed Manufacturing, Retail Sales, IP & Uni. of Michigan (Prelim.), Speech from Fed's Bostic, Bullard & Daly. Earnings from Citi & Wells Fargo.

GEOPOLITICS

RUSSIA-UKRAINE

• US Treasury Secretary Yellen condemned Russia's 'brutal and unjust war' at the G20 meeting and said Russia is solely responsible for the negative spillover of the Ukraine war to the global economy, according to Reuters.
• Uniper (UN01 GY) has begun using gas from storage following the recent cut from Russia, according to Bloomberg.
• Russian Deputy Foreign Minister say "Negotiations with Ukraine are now stalled and it is too early to predict the involvement of international players", according to Al Jazeera.
• European Commission to adopt on Friday its seventh Russian sanctions package, which will add the ban on imports of Russian gold whilst tweaking existing measures to avoid hitting food exports, according to Reuters sources. In-fitting with earlier/recent reports.

OTHER

• Saudi Arabia opened its airspace to all civilian planes that meet requirements which is seen as a gesture of openness toward Israel amid US President Biden's visit to the region, according to AFP.
• US President Biden is expected to arrive at 15:30BST/10:30ET following that he’ll have a bilateral meeting with King Salman and then meet MBS and a number of Saudi ministers, according to Energy Intel.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer across the board, as initial jittery performance dissipated with participants looking to US data and Fed speak.
• US futures are in the green, but only modestly so, and have been relatively contained awaiting further guidance from upcoming Fed officials on the 75bp/100bp discussion.
• UnitedHealth Group Inc (UNH) Q2 2022 (USD): Adj. EPS 5.57 (exp. 5.20/4.98 GAAP), Revenue 80.30bln (exp. 79.68bln).
• BlackRock Inc (BLK) Q2 2022 (USD): EPS 7.06 (exp. 7.90) Revenue 4.53bln (exp. 4.65bln). AUM 8.49tln (exp. 8.86tln). Net inflows 89.57bln (exp. 116.78bln).
• Click here for more detail.

FX

• Dollar in need of consumption or production boost after two Fed hawks lean against 100bp hike expectations that were becoming embedded for forthcoming FOMC meeting, DXY retreats through 108.500 after setting new 2022 peak at 109.290 yesterday.
• Franc outpaces fellow majors as yields retreat and curves re-steepen, while retaining bid against Euro, USD/CHF sub-0.9800 vs high near 0.9900 on Thursday, EUR/CHF depressed largely under 0.9850.
• Aussie underperforms as Chinese GDP data disappoints and iron ore dumps in response; AUD/USD top heavy above 0.6750, AUD/NZD reverses around 1.1000 handle.
• Loonie pares declines from new y-t-d low vs Greenback as crude prices stabilise, USD/CAD close to 1.15bln option expiries at the 1.3100 strike compared to 1.3200+ high yesterday.
• Euro attempts to consolidate back on a par with Buck after fleeting if not false break below.
• Yuan nurses losses after further depreciation on growth concerns and latest Covid lockdowns -Usd/Cnh and Usd/Cny slip from overnight peaks circa 6.7840 and 6.7690 respectively.
• Click here for more detail.

Notable FX Expiries, NY Cut:

• USD/CAD: 1.3000-05 (1.3BN), 1.3075 (510M), 1.3100 (1.15BN), 1.3150 (751M), 1.3180 (470M)
• Click here for more detail.

FIXED INCOME

• Bonds back off following further retracement from lows on less hawkish Fed vibes that prompted bull re-steepening
• Bunds sub-153.00 vs new 153.80 WTD peak, Gilts under 116.00 from 116.39 and 10 year T-note midway between 118-29+/118-13 stalls
• BTPs stage impressive recovery to 124.30 from 121.96 trough on Thursday awaiting next chapter in Italian political drama
• Click here for more detail.

COMMODITIES

• Crude benchmarks are firmer, tracking sentiment, but cognizant of the Saudi-Biden meeting though an immediate production increase is not anticipated; WTI +USD 0.20/bbl.
• The US is not expecting Saudi Arabia to immediately boost oil production, US eyes the next OPEC+ meeting, according to a US official cited by Reuters.
• UAE says it wants more stable oil markets, will abide by OPEC+ decision; idea of a confrontational approach re. Iran is not something they buy into, via Reuters.
• Spot gold remains pressured near, but yet to breach, the USD 1700/oz handle; despite a pull-back in the USD as sentiment turns incrementally more constructive.
• Click here for more detail.

NOTABLE HEADLINES

• ECB's Rehn says ECB likely to go 25bps in July and 50bps in September. Note, the ECB is in its quiet period at the moment.

NOTABLE US HEADLINES

• US Commerce Secretary Raimondo said a pared-down China competition bill could be acceptable to the administration and said Congress needs to act next week, according to Reuters.
• US Treasury Secretary Yellen says developing countries may benefit from FX intervention in some cases
• Click here for the US Early Morning note.

CRYPTO

• Bitcoin is firmer and comfortably above the USD 20k mark, though shy of its above USD 21k best.

APAC TRADE

EQUITIES

• APAC stocks traded mixed after the 100bps Fed rate hike bets unwound and with headwinds from China's GDP miss.
• ASX 200 was dragged lower by the mining sector amid losses in Rio Tinto shares despite an increase in its quarterly output and shipments, as it also warned of headwinds to its business and higher costs.
• Nikkei 225 swung between gains and losses but was ultimately higher intraday amid recent currency weakness and with index heavyweight Fast Retailing boosted by strong 9-month results.
• Hang Seng and Shanghai Comp. were indecisive after disappointing Chinese growth data which showed weaker than expected GDP and Industrial Production, although Retail Sales surprisingly expanded and the Unemployment Rate declined.

NOTABLE APAC HEADLINES

• PBoC injected CNY 100bln via 1-year MLF vs CNY 100bln maturing with the rate kept at 2.85%.
• China's Foreign Minister Wang also commented that China-Australia relations currently face challenges and opportunities, while he added that China is willing to recalibrate relations in the spirit of mutual respect, according to Reuters.
• China NBS official said downward pressure on the domestic economy increased substantially during Q2 and that the foundation for a sustained economic recovery is not solid, while the economy is facing shrinking demand and supply shock, according to Reuters.
• China's Huaiyuan county has announced a lockdown amid COVID, according to local TV; 151 prelim cases were reported on July 14th, according to CCTV.

DATA RECAP

• Chinese GDP QQ(Q2) -2.6% vs. Exp. -1.5% (Prev. 1.3%, Rev. 1.4%); YY (Q2) 0.4% vs. Exp. 1.0%** (Prev. 4.8%)
• Chinese Industrial Output YY (Jun) 3.9% vs. Exp. 4.1% (Prev. 0.7%); Retail Sales YY (Jun) 3.1% vs. Exp. 0.0% (Prev. -6.7%)
• Chinese Unemployment Rate (Jun) 5.5% (Prev. 5.9%)
• Chinese China House Prices YY (Jun) -0.5% (Prev. -0.1%)