• APAC stocks traded cautiously following the mixed performance of global counterparts and amid risk events.
• European equity futures are indicative of a softer open with Eurostoxx 50 -0.2% after the cash market closed with losses of 0.1% yesterday.
• Italian PM Draghi is set to announce his intention to resign at 08:00BST.
• DXY is on the backfoot, EUR/USD reclaimed 1.02 and JPY contained after BoJ stood pat on policy.
• Nord Stream said gas delivery has resumed on Thursday morning. Deliveries are at roughly 40% of capacity.
• Looking ahead, highlights include US IJC, Policy Announcement from ECB, CBRT & SARB, Speech from ECB's Lagarde, Supply from Spain, France & UK, Earnings from AT&T, Phillip Morris, Roche & Nokia.

US TRADE

• US stocks were firmer and managed to shake off the pessimism in Europe with the Nasdaq leading the upside after tech was underpinned post-Netflix earnings, although gains were capped for the other major indices amid geopolitical concerns and reports that Google was pausing new hires for two weeks.
• SPX +0.58% at 3,959, NDX +1.55% at 12,439, DJIA +0.15% at 31,874, RUT +1.43 % at 1,824.
• Click here for a detailed summary.

NOTABLE US HEADLINES

• US officials are reorganising the HHS to boost the pandemic response, according to Washington Post.
• Microsoft (MSFT) is to slow hiring in some groups and is eliminating open jobs, according to Bloomberg. It was separately reported that Ford (F) is planning to cut up to 8k salaried workers related to gas-powered vehicles in the coming weeks amid its push into EVs, while Google (GOOGL) will pause hiring for two weeks, according to an internal email cited by The Information.

GEOPOLITICS

RUSSIA-UKRAINE

• US State Department said Russian Foreign Minister Lavrov's recent comments demonstrate that Russia is moving toward annexation that the US warned about and said the US would not allow annexation to go unchallenged or unpunished, while it added that Russian annexation by force would be a gross violation of the UN charter.
• US is to send further weapons to Ukraine with an announcement coming this week, while chairman of the Joint Chiefs of Staff Milley said the Biden administration is looking at a wide range of options including training of Ukrainian pilots but there is no decision yet.
• US Deputy Treasury Secretary said the EU wants an insurance ban by December regarding Russian oil so the goal is to be in a position where a global price cap can be joined with the ban taking effect, according to Reuters.

APAC TRADE

EQUITIES

• APAC stocks traded cautiously following the mixed performance of global counterparts and amid risk events.
• ASX 200 lacked firm direction as outperformance in tech was offset by weakness in energy and the mining-related sectors despite an increase in quarterly production by several key oil and gold producers.
• Nikkei 225 eked marginal gains after the BoJ maintained its ultra-easy policy setting but with upside capped given the worsening COVID situation in Japan.
• Hang Seng and Shanghai Comp. were subdued amid increasing tensions related to a planned visit to Taiwan by US House Speaker Pelosi which spurred warnings from China’s mouthpiece that suggested the mainland's reaction to such a visit would be unprecedented and involve a shocking military response.
• US equity futures were flat overnight alongside the tentative mood in Asia. Tesla shares were seen higher by 1.5% after-hours. ES Unch.
• European equity futures are indicative of a softer open with Eurostoxx 50 -0.2% after the cash market closed with losses of 0.1% yesterday.

FX

• DXY retraced some of the prior day’s gains and reverted to a sub-107.00 level with yields slightly lower overnight and as major counterparts nursed recent losses.
• EUR/USD was firmer overnight and reclaimed the 1.0200 handle ahead of today's ECB meeting with the central bank expected to deliver its first rate hike in 11 years.
• GBP/USD traded rangebound amid a lack of fresh catalysts from the UK and after yesterday’s boost from a 40-year high inflation reading proved to be short-lived.
• USD/JPY was choppy and is ultimately flat on the session after the lack of surprises from the BoJ which maintained its easy policy settings, as expected.
• Antipodeans were initially contained by the cautious but later took advantage of the softer greenback.

FIXED INCOME

• 10yr USTs bounced off US session lows where treasuries bear-flattened amid resilience in US stocks.
• Bunds remained elevated amid the geopolitical uncertainty in Europe.
• 10yr JGBs were firmer amid the BoJ policy announcement where the central bank maintained its ultra-loose policy settings and offered a second fixed-rate buying operation for today.

COMMODITIES

• Crude futures were subdued with WTI pulling back from the USD 100/bbl level as the Nord Stream 1 pipeline resumed flows.
• Nord Stream said gas delivery has resumed on Thursday morning, according to DPA. It was also reported that Nord Stream 1 gas pipeline nominations were at 29.3mln kWh/h from 06:00CET, according to the operator. Deliveries are reportedly around pre-maintenance levels of circa 40%
• Head of German network regulator said gas nominations for Nord Stream 1 for today are still at 30% capacity and this is binding for the next 2 hours, while more changes over the day would be unusual, according to Reuters.
• Russian Deputy PM Novak said Russia would not produce oil if the price cap is below output costs, according to TASS.
• Spot gold marginally extended on the prior day's losses despite the dollar fading its gains.
• Copper was pressured overnight amid the cautious mood and COVID concerns in Asia.
• Chile's Codelco said it is temporarily suspending projects following the death of two workers, according to Reuters.

CRYPTO

• Bitcoin prices were subdued and fell to beneath the 23,000 level amid the cautious mood in Asia and with prices also not helped by reports that Tesla sold 75% of its Bitcoin holdings.
• US House lawmakers Waters (D) and McHenry (R) are close to an agreement to impose tougher oversight of stablecoins, according to WSJ sources.

NOTABLE APAC HEADLINES

• US President Biden said the military does not think it is a good idea to travel to Taiwan now when questioned about a potential trip by House Speaker Pelosi, while he expects to speak with Chinese President Xi in the next 10 days, according to Reuters.
• US Commerce Secretary Raimondo warned of a deep recession if the US were to be cut off from Taiwan chip manufacturing, according to CNBC.
• China's ambassador to the US Qin said the China-Russia relationship is not an alliance and that the US is blurring the One China policy, while he added the US is bolstering links to Taiwan by sending officials.
• China Global Times' Hu Xijin tweeted earlier that it is certain the mainland's response to US House Speaker Pelosi's visit to Taiwan will be unprecedented and will involve a shocking military response.
• BoJ kept its policy settings unchanged, as expected, with rates at -0.10% and QQE with yield curve control maintained to target 10yr JGB yields at around 0%. BoJ reiterated it will offer to buy 10yr JGBs at 0.25% every business day unless it is highly likely that no bids will be submitted and repeated its guidance on policy bias that it will take additional easing steps without hesitation as needed with an eye on the pandemic's impact on the economy, as well as kept forward guidance for short- and long-term rates to remain at present or lower levels. Furthermore, it stated that it must be vigilant to financial and currency market moves and their impact on Japan's economy and prices, while it lowered Real GDP growth forecast for the current fiscal year to 2.4% from 2.9%, but raised the Real GDP view for the two years after and increased CPI projections through to FY24.
• Asian Development Bank lowered Developing Asia growth forecast for 2022 to 4.6% from 5.2% and lowered 2023 growth forecast to 5.2% from 5.3%, while it cut its China 2022 growth forecast to 4.0% from 5.0%, according to Reuters.

DATA RECAP

• Australian NAB Business Confidence (Q2) 5 (Prev. 14, Rev. 15)
• Australian NAB Business Conditions (Q2) 20 (Prev. 9, Rev. 11)
• New Zealand Trade Balance (Jun) -701M (Prev. 263.0M, Rev. 195M)
• New Zealand Exports (Jun) 6.42B (Prev. 6.95B, Rev. 6.87B)
• New Zealand Imports (Jun) 7.12B (Prev. 6.69B, Rev. 6.68B)
• Japanese Trade Balance Total Yen (Jun) -1383.8B vs. Exp. -1509.7B (Prev. -2385.8B)
• Japanese Exports YY (Jun) 19.4% vs. Exp. 17.5% (Prev. 15.8%)
• Japanese Imports YY (Jun) 46.1% vs. Exp. 45.7% (Prev. 48.9%)

EU/UK

NOTABLE HEADLINES

• UK's Unite union said AFS Heathrow refuelling strike scheduled for July 21st was suspended amid a new offer on the table.
• Italian PM Draghi won a Senate confidence motion although three major coalition parties boycotted the vote, while Draghi will meet President Mattarella on Thursday and is to announce at 08:00BST/03:00EDT in the Chamber of Deputies his intention to resign, according to ANSA.