• European bourses are firmer across the board, Euro Stoxx 50 +0.9%, and are set to post their best monthly performance since Nov'20.
• NQ continues to outperform, +1.2%, amid after-market earnings from AMZN and AAPL
• DXY attempts to recoup from JPY-induced pressure after USD/JPY dropped to 132.50; EUR fades despite hot-CPI and strong GDP data
• Crude is bid while TTF relinquishes EUR 200 mark; Saudi-Russia talks and Lavrov looking into a call with US' Blinken
• Marked pull-back in core debt but still notably bid for the week as a whole with a busy afternoon docket ahead
• US President Biden and China's President Xi discussed face-to-face meeting and directed teams to follow up; did not discuss any potential lifting of US tariffs on Chinese products.
• Looking ahead, highlights include US Jun PCE, US Chicago PMI, and Canadian GDP. Earnings from Exxon Mobil, Phillips 66, AbbVie, and more.

As of 11:20BST/06:20ET

LOOKING AHEAD

• US Jun PCE, US Chicago PMI, Canadian GDP.
• Earnings from Exxon Mobil, Phillips 66, AbbVie, and more.
• Click here for the Week Ahead preview

GEOPOLITICS

BIDEN-XI CALL

• Senior US admin official said US President Biden and China's President Xi discussed face-to-face meeting and directed teams to follow up; did not discuss any potential lifting of US tariffs on Chinese products.
• White House said presidents Biden and Xi discussed a range of issues important to bilateral relationship and other regional/global issues.
• Senior US admin official said Biden and Xi had a 'direct and honest' discussion on Taiwan. They discussed areas of cooperation including climate change, health security and counter-narcotics. Biden brought up the long-standing concerns on human rights. Macroeconomic coordination between China and US is of great importance. Biden explained to Xi his core concerns about China's economic practices.
• China President Xi told US President Biden that the US should abide by the One China principle, and act in line with its words, according to State Media. On the Taiwan issue, Xi told Biden that 'those who play with fire will get burned'. Xi told Biden that China fiercely opposes Taiwan independence and the interference of external forces
• US President Biden told China President Xi that the US stance on One China policy remains unchanged, according to China's Global Times.

RUSSIA-UKRAINE

• Russian Kremlin, when asked on the West pushing Ukraine to negotiate says it does not see the possibility for talks.
• Russian Foreign Minister Lavrov says will soon propose a date for a call with US Secretary of State Blinken; interested in Blinken's proposals regarding the export of Russian grain.
• US State Department said Russia has acknowledged the request for Blinken-Lavrov call but said there is no update on when they will speak, and added the US continues to expect that Blinken-Lavrov will have an opportunity to speak in the coming days.
• Russia is reportedly transferring USDs to Turkey for a USD 20bln nuclear facility, according to Bloomberg.

EUROPEAN TRADE

CENTRAL BANKS

• BoJ Summary of Opinions (Jul meeting): achieving the price stability target in a stable manner is difficult given developments in the output gap and inflation expectations. The recent resurgence of COVID-19 is extremely rapid, and it is necessary to examine how this will affect financial positions, mainly of small and medium-sized firms. The Bank needs to closely monitor the impact that the recent increase in its Japanese government bond (JGB) purchases to contain upward pressure on interest rates has on the functioning of the JGB market.
• ECB's de Guindos says EUR depreciation has been one of the factors behind high inflation, main factor that guides decisions is the evolution of inflation.
• HKMA buys around HKD 9.656bln from the market to defend the peg.

EQUITIES

• European bourses are firmer across the board, Euro Stoxx 50 +0.9%, and are set to post their best monthly performance since Nov'20.
• Stateside, the NQ continues to outperform, +1.2%, amid after-market earnings from AMZN and AAPL; US PCE Price Index ahead.
• Amazon.com Inc (AMZN) Q2 2022 (USD): GAAP EPS -0.20 (exp. 0.13), Revenue 121.2bln (exp. 119.09bln). CFO said they saw a demand increase during the quarter and the Co. had a very strong June; When asked about Walmart (WMT) profit warnings, said the Co. does not notice a step down in June Pre-market +12.0% (Click here for the full release)
• Apple Inc (AAPL) Q3 2022 (USD): EPS 1.20 (exp. 1.16), Revenue 82.96bln (exp. 82.81bln). iPad: 7.22bln (exp. 6.94bln). iPhone: 40.67bln (exp. 38.33bln). Mac: 7.38bln (exp. 8.7bln). Expect 6% hit from FX in current Q.CFO not providing revenue guidance in conference call; expects services revenue to grow but decelerate from June quarter and sees a tax rate of 16% in the quarter. Pre-market +2.5% (Click here for the full release)
• Chevron Corp (CVX) Q2 2022 (USD): adj. EPS 5.82 (exp. 5.10), Revenue 65.372bln (exp. 59.29bln)
• Intel Corp (INTC) Q2 2022 (USD): Adj. EPS 0.29 (exp. 0.70/0.52 GAAP), Revenue 15.3bln (exp. 17.92bln); Sees FY 2022 Revenue View: 65-68bln (exp. 74.34bln; prev. 76bln). Shares fell 8.3%
• Tesla (TSLA) CEO Musk said inflation may be trending lower, says more Tesla commodity prices are trending down than up, via Twitter.
• Click here for more detail.

FX

• Yen recovery momentum gathers pace and extends beyond Dollar pairing to JPY crosses, USD/JPY slides over 2 big figures to test 132.50, EUR/JPY down to 137.56 from 137.32.
• DXY loses grip of 106.000 post-negative US GDP print and looking for support from PCE, ECI and/or Chicago PMI.
• Euro fades again irrespective of some encouraging Eurozone data and option expiry interest may be capping, EUR/USD tops out just over 1.0250 yet again and circa 3bln rolling off between 1.2045-50.
• Rand underpinned by Gold gains and Lira holds above 18.0000 as Turkish trade deficit narrows and Russia transfers funds for a nuclear facility.
• Sterling fades amidst mixed BoE consumer credit and housing metrics, Cable sub-1.2150 vs 1.2245 at best and EUR/GBP probing 0.8400 vs low around 0.8346 yesterday.
• Click here for more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.0050 (1.11BN), 1.0125 (658M), 1.0200 (824M), 1.0205 (838M), 1.0245 (1.28BN), 1.0250 (1.80BN), 1.0300-05 (1.30BN)
• GBP/USD: 1.1700 (486M), 1.2100 (1.0BN)
• Click here for more detail.

FIXED INCOME

• Marked debt retracement following run of even more pronounced recovery gains.
• Bunds fade just shy of 158.00 again and retreat to 156.21, Gilts reverse around 100 ticks from 118.36 and T-note to 120-21+ from 121-08 at best.
• Stronger than expected Eurozone data also in the mix along with buoyant risk sentiment and firm oil.
• Bonds braced for busy pm agenda comprising US PCE, ECI and Chicago PMI.
• Click here for more detail.

COMMODITIES

• WTI Sep’22 and Brent Oct’22 are posting gains in excess of 2.0% on the session but remain capped by USD 100/bbl and 105/bbl respectively.
• Dutch TTF Sep’22 has pulled back to modestly below the EUR 200/mWh mark, but remains bid after several sessions of pronounced price action.
• Spot gold is relatively contained and resides just above the unchanged mark but continues to be dictated by the USD with the JPY-induced pressure lifting the yellow metal briefly overnight.
• Saudi Energy Minister and Russian Deputy PM Novak met in Riyadh and discussion cooperation between the two nations, according to Twitter, via Reuters.
• Click here for more detail.

DATA RECAP:

• EU HICP Flash YY (Jul) 8.9% vs. Exp. 8.6% (Prev. 8.6%); X F&E Flash YY (Jul) 5.0% vs. Exp. 4.7% (Prev. 4.6%); X Food, Energy, Alcohol & Tobacco Flash YY (Jul) 4.0% vs. Exp. 3.8% (Prev. 3.7%)
• EU GDP Flash Prelim QQ (Q2) 0.7% vs. Exp. 0.2% (Prev. 0.6%); YY (Q2) 4.0% vs. Exp. 3.4% (Prev. 5.4%)
• German Unemployment Change SA (Jul) 48k vs. Exp. 15.0k (Prev. 133.0k, Rev. 132k); Unemployment Rate SA (Jul) 5.4% vs. Exp. 5.4% (Prev. 5.3%)

NOTABLE US HEADLINES

• US President Biden said, after the GDP data, Fed Chair Powell and many significant banking personnel say we are not in a recession.
• US Treasury Secretary Yellen said US economy remains resilient in the face of headwinds; US economy is now at full employment. She added that there are some signs that inflation is likely to come down in the days ahead.
• Billionaire investor Bill Ackman said he thinks inflation will begin to come down soon, via Twitter.
• Biden admin is reportedly planning to offer updated COVID booster shots in September, according to NYT
• Click here for the US Early Morning note.

APAC TRADE

• APAC stocks traded mixed despite the positive lead from Wall Street, with Chinese markets lagging.
• ASX 200 was lifted by gold names amid the recent rise in the precious metal.
• Nikkei 225 saw mild gains throughout the session but eventually fell into the red amid notable JPY strength, whilst Nissan shares fell over 4% at one point after earnings.
• KOSPI was propelled by its Telecom sector, with Financials and Industrials also aiding.
• Hang Seng slipped over 2% with Alibaba shedding 6% after WSJ reported that Jack Ma intends to relinquish control of Ant Group. Headlines pointed out the Hang Seng index has fallen 10% from its June peak.
• Shanghai Comp held a negative bias as traders reacted to the Biden-Xi call, which included no rollback of Trump-era tariffs. Selling thereafter resumed following downbeat commentary from China's MOFCOM, suggesting the outlook for H2 trade growth is not optimistic.

NOTABLE APAC HEADLINES

• China's Commerce Ministry said China's foreign trade faces higher risks; the outlook for China's H2 trade growth is not optimistic, via Bloomberg. MOFCOM said they will study targeted measures for foreign trade, and will step up support for export credit insurance in H2 and expand imports actively and ensure domestic commodity supply, via Reuters.
• China's Commerce Ministry official said foundation for consumption recovery is not solid yet, more efforts needed to boost consumption, via Reuters.
• Japanese government decided to tap JPY 257bln in budget reserves to help with rising oil and broader inflation, according to the MoF.
• PBoC injected CNY 2bln via 7-day reverse repos with the maintained rate of 2.10% for a net drain of CNY 1bln and for a weekly drain of CNY 12bln
• PBoC set USD/CNY mid-point at 6.7437 vs exp. 6.7414 (prev. 6.7411)
• Japan's Finance Minister Suzuki provides no comment on day-to-day FX moves, closely watching moves with a sense of urgency while working with the BoJ; Japan's MOF said it did not intervene in FX in the June 29th to July 27th period.

DATA RECAP

• Japanese CPI, Overall Tokyo (Jul) 2.5% (Prev. 2.3%); Ex fresh food YY (Jul) 2.3% vs. Exp. 2.2% (Prev. 2.1%)
• Japanese Retail Sales YY (Jun) 1.5% vs. Exp. 2.8% (Prev. 3.6%, Rev. 3.7%)
• Japanese Industrial O/P Prelim MM SA (Jun) 8.9% vs. Exp. 3.7% (Prev. -7.5%)
• Japanese IP Forecast 1 Mth Ahead (Jul) 3.8% (Prev. 12.0%); 2 Mth Ahead (Aug) 6.0% (Prev. 2.5%)
• Japanese Unemployment Rate (Jun) 2.6% vs. Exp. 2.5% (Prev. 2.6%); Jobs/Applicants Ratio (Jun) 1.27 vs. Exp. 1.25 (Prev. 1.24)
• Korea (Republic of) Industrial Output Growth (Jun) 1.9% vs. Exp. -0.4% (Prev. 0.1%, Rev. 0.2%); YY (Jun) 1.4% vs. Exp. 2.0% (Prev. 7.3%, Rev. 7.4%)
• Korea (Republic of) Service Sector Output Gr (Jun) -0.3% (Prev. 1.1%, Rev. 1.0%)
• Australian PPI YY (Q2) 5.6% (Prev. 4.9%); QQ (Q2) 1.4% (Prev. 1.6%)