• APAC stocks traded mostly lower; China’s property stocks and bonds rallied on reports of a potential real estate fund.
• DXY initially firmed before pulling back, EUR/USD traded on either side of 1.0200, and the AUD and NZD were the marginal G10 laggards.
• 10yr UST futures and Bund futures consolidated overnight and held onto last Friday's gains whilst APAC bonds played catch-up.
• Crude futures gave up earlier gains, base metals rallied whilst wheat and corn futures were also supported.
• The Ukrainian port of Odesa was hit by a series of Russian missile strikes; EU countries are reportedly attempting to water down the Commission's gas demand plans.
• Looking ahead, highlights include German Ifo Survey, UK CBI Trends, US National Activity Index, US Dallas Fed, supply from the US, earnings from Ryanair, Philips, Vodafone, Julius Baer, and NXP Semiconductor.

US TRADE

• US stocks closed lower on Friday amid a Snap-led tech selloff which saw the Co. slump almost 40%, whilst the Nasdaq shed almost 2%.
• SPX -0.90% at 3,963, NDX -1.77% at 12,396, DJIA -0.43% at 31,899, RUT -1.37 % at 1,805.
• Click here for a detailed summary.

NOTABLE US HEADLINES

• US President Biden's physician said the president's COVID symptoms continue to improve significantly, according to Reuters.
• Google (GOOG) co-founder Brin reportedly told his advisers to sell his personal investments in Tesla (TSLA) CEO Musk’s companies in recent months after learning that he had a brief affair with his wife, according to WSJ. Elon Musk denied the report, via Twitter.

GEOPOLITICS

RUSSIA-UKRAINE

• The Ukrainian port of Odesa was hit by a series of Russian missile strikes, according to Sky News. Russian Defence Minister said a Ukrainian warship and US-supplied anti-ship missiles were destroyed in the Odesa port attack, according to Reuters.
• US Secretary of State Blinken said Russia breached the grain deal commitments with the attack on Odesa port, via Reuters.
• EU countries are reportedly attempting to water down the Commission's plans to cut gas demand by 15% from next month, according to the FT citing sources and a draft proposal. One proposal suggests compulsory targets should take into account each state’s dependency on Russian gas and storage. Plans will be discussed on Monday before an emergency Energy Ministers' meeting on Tuesday, according to the FT.
• White House Defense Department spokesman said the US DoD is making preliminary explorations into the feasibility of potentially providing fighter jets for Ukraine, and said providing jets to Ukraine is not something that would be executed in the near term, according to Reuters.
• Ukraine President Zelensky said roughly 10mln tonnes of last year's grain harvest will be exported after the deal is signed with Russia, according to Reuters.
• Ukrainian Presidential Advisor said if its ports are open, then Ukraine could transfer 60mln tonnes of grain over 8-9 months, but it will take 20-24 months to export the same amount if ports do not work, via Reuters.
• Siemens (SIE GY) on Sunday transferred a Canadian export license to Gazprom that allows turbines for the Nord Stream gas pipeline to be repaired and transported. The pipeline part may be en route to Russia by midweek but there is no guarantee that the arrival of the turbine will boost gas flows, according to Bloomberg.

OTHER

• French President Macron expressed disappointment to his Iranian counterpart about the lack of progress in nuclear talks, according to the Elysee Palace cited by Reuters.
• Turkish Foreign Ministry has summoned Sweden to convey a "strong reaction" over "terrorist propaganda" in Sweden, according to Reuters. This comes in the context of Sweden's NATO ascension
• China has strengthened its warning to the US about House Speaker Pelosi's visit to Taiwan, according to the FT. Sources suggest private rhetoric in China suggested a possible military response. Note, this is in-fitting with rhetoric seen via Global Times last week.
• US Deputy Secretary of State Sherman and US Ambassador to Australia Kennedy plan to visit the Solomon Islands next month, according to Reuters sources. Note, China has recently signed a new security agreement with the Solomon Islands, which caused concern among officials in the US, Australia and New Zealand.
• South Korean and US defence chiefs will be holding talks this week to discuss security on the Korean Peninsula and deterrence against evolving North Korean threats, according to Yonhap.

CENTRAL BANKS

• ECB's Lagarde said the ECB will raise rates for as long as it takes to bring inflation back to target, according to an interview via Funke Mediengruppe.
• ECB's Nagel said it is better to start with a bigger hike and is confident that ECB's TPI would survive legal challenges, according to Handelsblatt. He added that future rate hikes are to depend on data, and we still see positive growth in 2022 and 2023. He said TPI is to be used in exceptional circumstances.
• ECB's Holzmann said the ECB may accept a "light recession" if the outlook for CPI rises, according to an interview via ORF. Holzmann said the ECB is to consider the economic situation before another big hike and said economic growth is slowing and that has brought in caution.

APAC TRADE

EQUITIES

• APAC stocks traded mostly lower with the tech sector in the region hit following the Stateside sectoral performance.
• ASX 200 saw the gains in its Metals & Mining sector offset by a selloff in Tech.
• Nikkei 225 underperformed following the JPY strength seen on Friday, whilst the KOSPI outpaced peers.
• Hang Seng was lower following reports China is said to be mulling categorising US-listed Chinese firms into three groups based on the sensitivity of data held by the firms, but the property sector outperformed amid reports that China is planning to set up a real estate fund.
• Shanghai Comp was also softer but monkeypox-related stocks soared after the WHO declared monkeypox a global health emergency.
• US equity futures traded flat with a broad-based downside bias throughout the APAC session. ES -0.1%.
• European equity futures are indicative of a softer open with the Euro Stoxx 50 future -0.7% after the cash market closed flat on Friday.

FX

• FX markets were somewhat quiet overnight with traders looking ahead to this week's risk events headlined by the FOMC.
• DXY firmed in the early hours to a high of 106.89 (vs Friday's 106.56 close) before pulling back to 106.60.
• EUR/USD traded on either side of 1.0200 as the EU gears up for several geopolitical meetings this week.
• GBP/USD surrendered its 1.2000 handle when the Dollar marched higher and thereafter found resistance near the psychological figure.
• AUD and NZD were the marginal G10 laggards throughout the session, but losses were cushioned by a rise in base metal prices.
• USD/JPY edged higher towards 136.50 in early trade but found some resistance just above the level at 136.61 – with its 21 DMA seen at 136.75.

FIXED INCOME

• 10yr UST futures and Bund futures consolidated overnight and held onto last Friday's gains, with the latter holding onto a 154.00 handle.
• 10yr JGB yields fell as the complex caught up to Friday's US and EU bond action, with the 10yr JGB yield falling to its lowest since March 14th. Ahead, the newly appointed BoJ board members Takata and Tamura (set to replace Suzuki and dovish-dissenter Kataoka) are due to deliver a speech at 17:00JST/09:00BST/04:00EDT.

COMMODITIES

• Crude futures rose as futures trading resumed but thereafter gave up their gains amid the cautious risk mood.
• US President Biden said gasoline prices are still too high and is working to make sure gasoline prices move with oil prices and said companies should use profits to boost output, according to Reuters.
• Baker Hughes US Rig Count (w/e July 22nd): Oil unchanged at 599, Nat Gas +2 at 155, Total +2 at 758.
• Spot gold traded on either side of USD 1,725/oz, with price action mirroring that of the Dollar.
• Copper and iron futures rose in China, with coking coal and coke futures higher in sympathy, with the complex also supported by reports that China plans to set up a real estate fund worth USD 44bln.
• LME will not ban Nornickel's metal as the Russian firm is not under UK sanctions, according to Reuters sources.
• Chicago wheat, corn and soybean futures rose at the open, possibly on the back of reports that the Ukrainian port of Odessa was hit by Russian missiles less than 24 hours after the signing of the grains agreement in Turkey.
• Malaysia's Commodities Minister said crude palm oil prices are likely to remain weak for most of Q3 2022 as Jakarta lifts the exports levy; but prices are expected to be higher in Q4 amid the resumption of Indonesia's palm oil export levy, via Reuters.

CRYPTO

• Crypto markets declined over the weekend with Bitcoin prices pulling back to sub-22k, whilst Ethereum prices declined to near USD 1,500.

NOTABLE APAC HEADLINES

• China is said to be mulling categorising US-listed Chinese firms into three groups based on the sensitivity of data held by the firms, according to FT sources.
• Neither the EU nor China believes that conditions are ripe for the implementation of the China-EU Comprehensive Investment Agreement, according to Chinese sources cited by SGH Macro.
• China reportedly plans to set up a real estate fund worth up to USD 44bln, according to REDD cited by Reuters.
• Hong Kong is reportedly planning to cut hotel quarantine times, according to Sing Tao Daily.
• The Sakurajima volcano on Japan's western major island of Kyushu has erupted with the alert level raised to 5 - the highest, according to Sky News. No damage has been reported but volcanic stones could be seen raining down up to 1.5 miles away from the site, according to NHK.
• China’s securities regulator said in a statement it has not researched a plan for a three-tiered system to help Chinese companies avoid US delisting, according to CNBC

EUROPE-SPECIFIC HEADLINES

• Italy's far-right Brothers of Italy party is reportedly struggling to find ministerial candidates, according to The Times.
• A survey by DIHK of 3,500 firms in Germany found that 16% are scaling back production or partially pausing business operations amid high energy prices, via Reuters.
• Fitch affirmed Hungary at "BBB"; outlook Stable; affirmed Ireland at "AA"; outlook stable.

GLOBAL

• The WHO declared monkeypox a global health emergency. Monkeypox is unlikely to disrupt international trade or travel right now, the WHO chief said. The US CDC confirmed its first cases of monkeypox in a toddler and an infant.
• The US is to host a virtual meeting of Indo-Pacific trade and economic ministers on Tuesday, according to Reuters.