• European bourses are modestly softer, Euro Stoxx 50 -0.10%, but relatively contained now after fading initial gains from the FOMC-inspired upside
• US futures are relatively stable but continue to post modest losses with the NQ -0.7% lagging amid pre-market downside in Meta post-earnings, -6.0%.
• USD is firmer on the session but pulling back from recent ranges to the modest benefit of peers while JPY extends on potentially reduced policy divergence
• Core debt remains choppy but continues to feature noted curve steepening with 7yr supply ahead
• TTF comparably contained with no new Nord Stream 1 developments thus far while crude is supported on the USD, China & shell CEO
• Looking ahead, highlights include German State CPI, US Q2 GDP Advance, Q2 PCE, US IJC, Biden-Xi call (time TBC), supply from the US.
• Earnings from Amazon, Apple, Intel, and more

As of 11:20BST/06:20ET

LOOKING AHEAD

• German State CPI, US Q2 GDP Advance, Q2 PCE, US IJC, Biden-Xi call, supply from he US.
• Earnings from Amazon, Apple, Intel, and more
• Click here for the Week Ahead preview

GEOPOLITICS

RUSSIA-UKRAINE

• Russia said it received no formal request from the US regarding a meeting between Foreign Minister Lavrov and US Secretary of State Blinken, via Tass.

OTHER

• China will hold military exercises in designated areas in the South China Sea on Fri and Sat, according to the Maritime Safety Administration cited by Global Times.
• North Korean Leader says the South Korean admin and military will be totally destroyed if they try "dangerous attempts", via Yonhap; prepared for any military clash with the US.

EUROPEAN TRADE

CENTRAL BANKS

• BoJ Deputy Governor Amamiya said we must not loosen our grip in keeping monetary policy easy as there is no prospect yet of sustainably meeting the 2% inflation target. He added that consumer sentiment has been worsening due to rising energy and food prices. BoJ must be vigilant to financial and forex moves and their impact on economy and prices.
• ECB's Visco refrains from saying whether markets should expect a 25bps or 50bps hike in September; not prepared to say the ECB would go for 50bps in September in order to reach its target quicker. Adds, the ECB doesn't really know where its target is.
• BoK to strengthen monitoring of FX and capital flows following the FOMC hike, according to Bloomberg.
• HKMA raised its base rate by 75bps to 2.75%, as expected, following the earlier Fed rate hike.
• NBH hikes the one-week deposit rate to 10.75% (prev. 9.75%) at tender.
• CBRT Governor says the bank has enough FX reserves to meet high energy costs and reserves continue to increase.

EQUITIES

• European bourses are modestly softer, Euro Stoxx 50 -0.10%, but relatively contained now after fading initial gains from the FOMC-inspired upside. Amid numerous earnings updates from Europe & in the US aftermarket.
• US futures are relatively stable but continue to post modest losses with the NQ -0.8% lagging amid pre-market downside in Meta post-earnings, -6.0%.
• Meta Platforms Inc (META) Q2 2022 (USD): EPS 2.46 (exp. 2.59), Revenue 28.82bln (exp. 28.95bln), Advertising revenue 28.15bln (exp. 28.53bln). Outlook reflects continuation of weak advertising demand environment it experienced throughout Q2. Guidance assumes FX will be about a 6% headwind to Y/Y total revenue growth in Q3. Co. said the economic downturn will have a broad impact on digital advertising business, says the situation seems worse than it did a quarter ago. -6.0% in the pre-market
• Jack Ma intends to relinquish control of Ant Group, via WSJ sources; to transfer some voting power to executives, could push-back IPO timing by over a year.
• Note, there has been a substantial amount of notable European earnings please click here and here for more detail.
• Click here for more detail.

FX

• Fed leaves Dollar in limbo with no firm forward guidance and reliant on unfolding macro fundamentals, DXY depressed within 106.580-050 range vs pre-FOMC high of 107.430.
• Yen outperforms on prospect of less BoJ vs Fed policy divergence, USD/JPY sub-135.50 and key Fib level.
• Kiwi outpaces Aussie as NZ business outlook and activity turn less downbeat, while Australian retail sales miss consensus and slow to softest pace in 2022 so far; AUD/NZD retreats through 1.1150 as AUD/USD and NZD/USD hover just under 0.7000 and 0.6300 respectively.
• Pound extends gains against Euro through 0.8400 and chart trend line, but both fade from post-FOMC peaks vs Buck, Cable unable to reach 1.2200 and EUR/USD fails to hold above 1.0200.
• Lira and Forint flounder irrespective of supportive CBRT rhetoric and NBH raising 1-week deposit rate by 100bp, USD/TRY touches 17.9300 in wake of jump in year end Turkish CPI forecast and EUR/HUF approaches 408.00.
• Click here for more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.0050-55 (547M), 1.0200 (844M), 1.0250 (620M), 1.0300-05 (1.30BN)
• USD/JPY: 136.20 (1.40BN)
• Click here for more detail.

FIXED INCOME

• Bonds remain volatile post-Fed, but curve steepening the clear trend as markets reset rate expectations to data rather than forward guidance.
• Bunds choppy within wide 154.75-155.87 extremes, Gilts between 116.70-117.19 parameters and T-note from 119-23+ to 120-08+.
• US Treasuries also conscious of looming 7 year supply after potentially pivotal Q2 GDP and jobless claims.
• Click here for more detail.

COMMODITIES

• WTI and Brent are firmer by over 1.5% on the session after spending much of the European morning relatively contained.
• European gas prices are significantly more contained when compared to price action earlier in the week but remain at elevated levels comfortably above EUR 200/MWh for TTF.
• Gazprom continues shipping gas to Europe via Ukraine, Thursday's volume is 42.1MCM (vs Monday's 42.2MCM).
• Shell (SHEL LN) has cut gas use at the Rotterdam Pernis (404k BPD) facility by 40% and at German sites by ~70%, due to the ongoing gas situation.
• India's gold demand in H2 is seen falling Y/Y due to lower disposable income; H1 gold demand rose 42% Y/Y, according to World Gold Council.
• Magnitude 6.3 earthquake hits Tocopilla in Chile, according to the EMS; 5.5 magnitude earthquake occurs near Nicaragua coast, via EMSC.
• Nornickel Q2 production: Nickel 48k tonnes, Palladium 709/koz, via Reuters.
• Spot gold is bid by just over USD 10/oz but, again, remains subject to USD action as while the index is bid it has dipped markedly.
• Amidst the USD’s relative weakness, base metals are similarly supported.
• Click here for more detail.

NOTABLE EUROPEAN HEADLINES

• German consumer energy bill to increase by EUR 1k/year, following a cost shift, via Bloomberg; Effective from October 1st, via Reuters sources; levy will cover 90% of costs. Subsequently, German Economy Minister says the gas level would cost several hundred EURs per household.

DATA RECAP:

• EU Consumer Confidence Final (Jul) -27.0 vs. Exp. -27.0 (Prev. -27.0, Rev. -23.8)
• German North Rhine-Westphalia State CPI MM (Jul) 1.1% (Prev. -0.1%)
• German North Rhine-Westphalia State CPI YY (Jul) 7.8% (Prev. 7.5%) Subsequent state release have been more mixed vs prev. for the YY; reminder, headline is expected at 7.4% (prev. 7.6%) YY., HICP at 8.1% (prev. 8.2%) YY.

NOTABLE US HEADLINES

• US Senate Democrat Manchin and Senate Democratic leader Schumer's reconciliation bill will invest around USD 300bln in deficit reduction, USD 369.7bln in energy security and climate change. It will close tax loopholes on wealthy individuals and corporations. The bill will be submitted for parliamentary review on Wednesday; Senate will consider it next week, according to Reuters. US President Biden said he spoke today with Senate Majority Leader Schumer and Senator Manchin to offer support for the Inflation Reduction Act; urged for this to pass as soon as possible.
• US House Republican leadership will now whip against the CHIPS+ bill, urging lawmakers to vote against it after the reconciliation deal was announced, according to Punchbowl's Sherman.
• "Bankers close to Musk say he knows it will be an uphill battle to win outright against Twitter (TWTR) and his game plan is to force TWTR to agree to terms below his initial USD 54.20 bid...", according FBN's Gasparino.
• The Biden admin is expected to declare monkeypox a public health emergency, according to sources cited by Politico.
• Former US Republicans and Democrats will on Wednesday announce a third party, called "Forward", to appeal to voters who they say are dismayed with the two-party system, according to Reuters sources.
• House Democrats plan to announce a proposal next month to ban lawmakers, their spouses and senior staff from trading stocks, according to Punchbowl sources.

APAC TRADE

• APAC stocks eventually traded higher across the board following the firm lead from Wall Street.
• ASX 200 saw firm gains across its Tech, Gold, and Mining sectors.
• Nikkei 225 gained in early trade and briefly topped the 28k mark before recoiling as the JPY saw a sudden bout of strength.
• KOSPI benefited from Samsung Electronics' rise post-earnings, although the firm echoed recent remarks from SK Hynix regarding weaker H2 memory demand.
• Hang Seng moved on either side of breakeven but later saw an upside bias as Hong Kong Finance Secretary said Hong Kong's H2 economic performance will be better than H1.
• Shanghai Comp eventually gained despite the recent cautious commentary from Chinese President Xi.

NOTABLE APAC HEADLINES

• Chinese Politburo says it will keep economic operations in a reasonable range. Click here for more detail.
• Australian Treasurer Chalmers said the final budget outcome for 2021/22 likely to show a dramatically better-than-expected outcome.
• Samsung Electronics (005930 KS) - Q2 2022 (KRW): Revenue 772tln (Co. exp. 77tln); operating profit 14.1tln (exp. 14tln). Net profit 11.1tln (exp. 10.3tln); Chip operating profit 9.98tln (exp. 11.08tln); expects weaker H2 phone/PC memory chip demand.
• South Korean President Yoon has ordered to take steps against illegal activities regarding stock short selling, via Yonhap.
• Hong Kong Finance Secretary said Hong Kong's H2 economic performance will be better than H1; property market fundamentals remain sound. Hong Kong Monetary Chief expects overnight and one-month interbank rate to continue to rise at a much faster pace; says HKD has been stable and has been operating in an orderly manner; public should be prepared for interbank rate to climb further, via Reuters.
• PBoC injected CNY 2bln via 7-day reverse repos with the maintained rate of 2.10% for a net drain of CNY 1bln.
• PBoC set USD/CNY mid-point at 6.7411 vs exp. 6.7425 (prev. 6.7731).
• Japanese government spokesperson says there is currently no plan to impose restrictions on people's movements following increasing COVID cases; Tokyo COVID cases reach 40,406 vs. previous record of 34,995.

DATA RECAP

• Australian Retail Sales MM Final (Jun) 0.2% vs. Exp. 0.5% (Prev. 0.9%)
• Australian Import Prices (Q2) 4.3% (Prev. 5.1%); Export Prices (Q2) 10.1% (Prev. 18.0%)
• New Zealand ANZ Business Outlook (Jul) -56.7% (Prev. -62.6%); Own Activity (Jul) -8.7% (Prev. -9.1%)