• APAC stocks followed suit to the gains in the EU and the US where sentiment was underpinned by Nord Stream optimism and a weaker buck.
• European equity futures are indicative of a higher open with Eurostoxx 50 +0.2% after the cash market closed with gains of 2.2% yesterday. 
• DXY was subdued on a 106 handle, antipodeans lead G10 FX amid the constructive mood, GBP and EUR also supported. 
• Crude futures plateaued overnight following the prior day's gains with prices capped by bearish inventory data.
• Looking ahead, highlights include UK CPI, Canadian CPI, EZ Consumer Confidence (Flash), US Existing Home Sales, New Zealand Trade Balance, Supply from Germany & US, Earnings from Abbott & Tesla.

US TRADE

• US stocks traded steadily higher throughout the session and notched firm gains with a cyclical bias as risk appetite was spurred by Nord Stream 1 optimism and the dollar fading some of its recent strength.
• SPX +2.76% at 3,936, NDX +3.13% at 12,249, DJIA +2.43% at 31,827, RUT +3.60 % at 1,796.
• Click here for a detailed summary.

NOTABLE US HEADLINES

• US Senate Minority Leader McConnell said he will not vote to proceed on the CHIPS bill until he knows what they are proceeding to, according to NBC News.
• USTR is to announce the US is requesting dispute settlement consultations with Mexico under the USMCA trade agreement with the request related to measures taken by Mexico in the energy sector which undermine US companies and US-produced energy, according to Reuters.

GEOPOLITICS

RUSSIA-UKRAINE

• Ukraine and Russia are reportedly close to a deal to secure safe passage of grain through the Black Sea but remained at odds over port and export route security plans, according to the FT.
• Russian President Putin said Saudi Arabia and UAE are offering mediation in Ukraine talks and Russia doesn't see a desire from Ukraine to stick to the preliminary agreed deal in March, according to Reuters.
• US Defense Department spokesperson Kirby said they have information that Russia is laying the groundwork to annex Ukrainian territory and that Russia will hold sham referendums as a basis to claim annexation, while he added that Russia is installing illegitimate proxy officials in territories under its control.

OTHER

• Russian President Putin said Russia and Iran discussed usage of national currencies in bilateral settlement, while he added Russia and Turkey are "satisfied" by the meeting in Istanbul on July 13th regarding grain exports but told Turkish President Erdogan that not all grain issues have been resolved, according to Reuters and Interfax.
• Iranian Supreme Leader Khamenei said Tehran and Moscow need to stay vigilant against "Western deception" amid meeting with Russian President Putin, according to state TV.
• US Senate bill seeks to monitor Iran's nuclear and missile capabilities, according to Bloomberg.

APAC TRADE

EQUITIES

• APAC stocks followed suit to the gains in the EU and the US where sentiment was underpinned by Nord Stream optimism and a weaker buck.
• ASX 200 was led higher by tech outperformance and with miners firmer after further quarterly output updates.
• Nikkei 225 gained with the BoJ expected to stick with ultra-loose policy at its 2-day policy meeting.
• Hang Seng and Shanghai Comp. conformed to the heightened risk appetite with tech encouraged despite reports Chinese authorities will fine Didi more than USD 1bln over data security breaches, as this ends a year-long investigation and paves the way for a Hong Kong listing. However, gains were somewhat capped in the mainland after the PBoC maintained its Loan Prime Rates which was as expected but disappointed outside calls for a cut to the 5yr LPR to assist with the ongoing mortgage strike issue, while China’s daily COVID cases surpassed 1,000 for the first time since May.
• US equity futures extended on the prior day's strength as the broad risk-on mood rolled over to Asia. Netflix was seen higher by 7.9% after-hours post-earnings. ES +0.5%
• European equity futures are indicative of a higher open with Eurostoxx 50 +0.2% after the cash market closed with gains of 2.2% yesterday.

FX

• DXY was subdued beneath 107.00 amid the heightened risk appetite and gains in its major counterparts.
• EUR/USD held on to recent gains after hawkish source reports suggested the ECB may consider a 50bps hike.
• GBP/USD gained amid the lacklustre dollar whilst BoE Governor Bailey said a 50bps increase will be among the choices at the next meeting but was not locked in.
• USD/JPY was choppy amid a lack of haven demand and as the BoJ kick-started its 2-day policy meeting.
• Antipodeans were kept afloat as activity currencies benefitted from the constructive mood.

FIXED INCOME

• 10yr USTs languished near the prior day’s lows amid the risk on mood and with the 10yr yield back above 3%.
• Bunds remained subdued after sources suggested the door was open for a 50bps ECB hike this week.
• 10yr JGBs lacked demand amid gains in stocks and weaker results at the enhanced liquidity auction.

COMMODITIES

• Crude futures plateaued overnight after the prior day's gains with prices capped by bearish inventory data.
• US Private Inventory Data (bbls): Crude +1.9mln (exp. +1.4mln), Gasoline +1.3mln (exp. +0.1mln), Distillate -2.2mln (exp. +1.2mln), Cushing +0.5mln.
• Qatar sold September-loading Al-Shaheen crude at USD 9-10/bbl above Dubai quotes which is the highest premium in four months, according to sources.
• India cut the windfall tax on diesel and aviation fuel shipments by INR 2/litre and cut taxes on domestically produced crude to INR 17k/ton.
• Russian President Putin said Gazprom plans to fulfil its obligations and that there are no grounds for Ukraine to shut down one of the gas transit routes to Europe, while he added that one more Nord Stream 1 turbine is expected to be sent for maintenance later this month and that Gazprom is ready to pump gas as much as needed. Furthermore, Putin said attempts to cap Russian oil prices will lead to prices skyrocketing and said Nord Stream volume will drop if the turbine return is delayed, according to Reuters.
• Nord Stream said it's sticking to its maintenance schedule, while it was also reported that Nord Stream sent small gas volumes as works are coming to an end and said it is conducting pipe 'pressure equalisation', according to Bloomberg.
• Barclays said the risk of a protracted shut down of Nord Stream 1 deliveries looks remote due to the high mutual dependence between Russia and Europe.
• EU is mulling a 15% reduction in natgas use for August until March, according to Bloomberg.
• Spot gold was rangebound amid a lack of haven demand and a softer dollar.
• Copper gained amid the heightened global risk appetite.

CRYPTO

• Bitcoin prices took a breather and held on to recent gains above the 23,000 level.

NOTABLE APAC HEADLINES

• PBoC 1-Year Loan Prime Rate (Jul) 3.70% vs Exp. 3.70% (Prev. 3.70%)
• PBoC 5-Year Loan Prime Rate (Jul) 4.45% vs Exp. 4.45% (Prev. 4.45%)
• Chinese Premier Li said China is to keep macro policies consistent and targeted, while he added that as long as employment is relatively sufficient, household income grows and prices are stable, slightly higher or lower growth rates are both acceptable, according to Xinhua.
• Chinese military said it monitored US destroyer Benfold's crossing of the Taiwan Strait and said frequent provocations by the US demonstrate that the US is a destroyer of peace and stability in the Taiwan Strait, while it added that troops in the theatre remain on high alert at all times, according to Reuters.

EU/UK

NOTABLE HEADLINES

• France and Germany have reportedly backed taking a hard stance with the incoming UK PM in Brexit talks, according to The Telegraph citing sources.