• European bourses are modestly firmer at present as we move towards the week's key risk events and as participants had already reacted to the Nord Stream developments.
• US futures similarly contained before further earnings releases, including Tesla after-hours.
• The USD is pressured though the DXY has marginally reclaimed 106.50 with peers eking marginal upside.
• Core debt continues to climb and BTPs lead the way after Draghi's initial Senate speech; US 20yr due
• Commodities continue to consolidate, with newsflow not changing the narrative and focused on familiar themes thus far
• Looking ahead, highlights include Canadian CPI, US Existing Home Sales, New Zealand Trade Balance, Supply from the US and Earnings from Abbott & Tesla.

As of 11:05BST/06:05ET

LOOKING AHEAD

• Canadian CPI, US Existing Home Sales, New Zealand Trade Balance, Supply from the US, Earnings from Abbott & Tesla.

GEOPOLITICS

RUSSIA-UKRAINE

• 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.
• German government spokesperson says working on the assumption gas will flow again following the Nord Stream 1 maintenance. Subsequently,
• Russia's Gazprom says it still has not received documentation from Siemens (SIE GY) regarding the Nord Stream 1 pipeline*
• EU is reportedly planning a temporary suspension of tariffs on fertilizer imports, via Bloomberg.

CENTRAL BANKS

• RBI is prepared to spend another USD 100bln to prevent runaway Rupee depreciation, according to Reuters sources; not trying to protect a particular level, buy will not allow jerky movements.

EUROPEAN TRADE

EQUITIES

• European bourses are modestly firmer at present as we move towards the week's key risk events and as participants had already reacted to the Nord Stream developments.
• Stateside, futures are posting similar price action with key earnings including Tesla on the docket; aside from corporate developments, the US-specific docket is slim.
• German government will pass on some energy costs to consumers, as a component of the Uniper (UN01 GY) rescue package, according to Reuters sources. Subsequently, Handelsblatt reports Germany could take a 30% stake in Uniper.
• Air India is said to be moving toward USD 50bln jet order, to be shared between Airbus (AIR FP) and Boeing (BA), but no deal seen at the Farnborough show, according to Reuters sources.
• Click here for more detail.

FX

• Kiwi extends gains vs Greenback ahead of NZ trade data amidst favourable AUD/NZD cross flows and as Aussie loses momentum against Buck, NZD/USD hovers around 0.6250, AUD/NZD circa 1.1050 and AUD/USD just over 0.6900.
• DXY attempts to draw line in sand and hold around 106.500 before US existing home sales and 20 year note auction.
• Sterling regains 1.2000+ status vs Dollar after post-UK CPI setback.
• Euro elevated on eve of 50-50 half or quarter point ECB hike policy meeting, EUR/USD straddles 1.0250.
• Loonie stalls into Canadian inflation update and Yen pauses as BoJ starts two-day policy confab, USD/CAD holds above 1.2850 and USD/JPY off sub-138.00 low.
• Click here for more detail.

Notable FX Expiries, NY Cut:

• USD/JPY: 137.00 (625M), 137.75 (835M), 139.00 (1.05BN), 140.00 (705M)
• Click here for more detail.

FIXED INCOME

• Bonds lay down firm foundations for midweek revival.
• Bunds up to 151.89 from 150.83 low, Gilts recover from 114.67 to reach 115.59 and 10 year T-note touches 118-10 vs 117-27 overnight low ahead of data and 20 year supply.
• BTPs even more resurgent between 124.79-122.84 parameters after Italian PM Draghi's pre-Senate debate speech.
• Click here for more detail.

COMMODITIES

• Crude benchmarks are modestly softer after Tuesday's firmer settlement, newsflow has been relatively sparse and focused on, but not adding much, to recent Nord Stream updates ahead of the maintenance period concluding on Thursday.
• 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.
• Spot gold has been slightly choppy, extending to incremental new highs and lows during European hours, though fairly steady above USD 1700/oz overall.
• Click here for more detail.

NOTABLE EUROPEAN HEADLINES

• Italian PM Draghi asks parties if they are prepared to rebuild their pact. Says unfortunately political parties have growing desire for division, last week's confidence vote marked the end of the trust in the coalition. The only way to stay together is to rebuild our pact, Italian public is asking for. Need to move towards the introduction of a minimum wage.
• Click here for newsquawk analysis on the overall situation and here for a brief summary on the next focus points.

NOTABLE EUROPEAN DATA:

• UK CPI YY (Jun) 9.4% vs. Exp. 9.3% (Prev. 9.1%); MM (Jun) 0.8% vs. Exp. 0.7% (Prev. 0.7%)
• Core CPI YY (Jun) 5.8% vs. Exp. 5.8% (Prev. 5.9%); MM (Jun) 0.4% vs. Exp. 0.5% (Prev. 0.5%)

NOTABLE US HEADLINES

• 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.

CRYPTO

• Bitcoin continues to extend on recent levels, lifting incrementally to a USD 23.8k high.

APAC TRADE

• 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.
• China Evergrande (3333 HK) is yet to reach a deal with foreign bondholders over restructuring, according to WSJ sources.

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.
• COVID cases in Japan are set to reach a record high in excess of 150k, according to the Nikkei.
• Shanghai is to require residents to take a minimum of one COVID test per week until August 31st, according to an official; while Macau is to reopen some casinos on Saturday, July 23rd, according to Reuters sources.