• European bourses are mixed but with a modest positive underlying bias emerging as the session progresses ahead of key risk events, Euro Stoxx 50 +0.4%
• Stateside, futures are firmer across the board, ES +0.4%, moving directionally with their European peers and eyeing US/China/Taiwan, ISM Services and Fed speak
• For FX, the DXY remains in proximity to the trough of 106.00 with peers modestly bid across the board ex-CHF
• Benchmarks have been moving lower as we head into today's JMMC and OPEC+ events, sources thus far suggest production will be maintained or subject to a small increase
• Core debt reversal and pullback extends with the pace of the initial move increasing on the initial PMIs
• Pelosi has now departed Taiwan and is believed to be heading to S. Korea
• Looking ahead, highlights include US Composite/Services Final PMI, US Factory Orders & ISM Services PMI, OPEC+, Speeches from Fed's Barkin, Harker & Kashkari.

As of 11:20BST/06:20ET

LOOKING AHEAD

• US Composite/Services Final PMI, US Factory Orders & ISM Services PMI, OPEC+, Speeches from Fed's Barkin, Harker & Kashkari.
• Click here for the Week Ahead preview

TAIWAN/PELOSI

• US House Speaker Pelosi has concluded her Taiwan visit, has now departed on SPAR19
• US House Speaker Pelosi said there is bilateral support for Taiwan in the US and that her visit is a reminder of the bedrock promise America to always stand with Taiwan, while she added that the delegation came to Taiwan to make it unequivocally clear that they will not abandon Taiwan. Pelosi also said they explored deepening trade ties with Taiwan and a trade agreement may be imminent, according to Bloomberg and Reuters.
• Taiwan President Tsai told Pelosi she is one of Taiwan's most devoted friends and the visit shows firm US support for Taiwan, while she thanked Pelosi for her unwavering support of Taiwan on the international stage. President Tsai also said Taiwan will not back down in facing deliberately heightened military threats and Taiwan will do whatever it takes to strengthen its self-defence.
• White House National Security Council Coordinator for Strategic Communications Kirby said the US is monitoring Pelosi's travel and has taken measures to ensure her safety, while he added that China has positioned itself to take further steps and the White House expects China to react beyond Pelosi's trip including by scheduling live fire exercises, while other steps by China could include economic coercion, according to Reuters.
• Taiwan Defence Ministry said Chinese drills have invaded Taiwan's territorial space and they will counter any move that violates Taiwan's territorial sovereignty, while it added that Chinese drills violate UN rules and amount to a blockade of Taiwan's air and sea space, according to Reuters.
• China's Taiwan Affairs Office said it will take disciplinary actions against two Taiwan foundations which will be banned from financially cooperating with mainland firms and individuals. China also announced a stoppage of certain fruit and fish imports from Taiwan and halted exports of natural sands to Taiwan which is a key component used in chip-making, according to Bloomberg. Furthermore, China will adopt criminal penalties regarding Taiwan separatists and vowed criminal punishments for Taiwan-independence diehards, according to Xinhua.
• China's Vice Foreign Minister Xie lodged representations regarding Pelosi's Taiwan visit, according to Xinhua.
• Taiwan is negotiating alternative aviation routes with Japan and the Philippines, according to Taiwanese press.

GEOPOLITICS

• Yemen's warring parties extended their truce for two months, while US President Biden later commented that the Yemen truce is an important step but not enough in the long-run, according to Reuters.

EUROPEAN TRADE

EQUITIES

• European bourses are mixed but with a modest positive underlying bias emerging as the session progresses ahead of key risk events, Euro Stoxx 50 +0.4%.
• Note, the FTSE 100 -0.1% is the morning's clear laggard owing to its high energy exposure as the broader crude complex comes under pressure.
• Stateside, futures are firmer across the board, ES +0.4%, moving directionally with their European peers and eyeing US/China/Taiwan, ISM Services and Fed speak.
• Click here for more detail.

FX

• Buck wanes after decent bounce on hawkish Fed vibes and marked rebound in US Treasury yields, DXY nearer 106.000 than 106.550 recovery high.
• Aussie pares some post-RBA losses as Kiwi labours in wake of sub-forecast NZ jobs data, AUD/USD back on 0.6900 handle, AUD/NZD just under 1.1100 and NZD/USD hovering around 0.6250.
• Yen attempts to stabilise following sharp retreat, USD/JPY circa 133.00 between 132.28-133.90 band and sub-130.50 low on Tuesday.
• Euro derives some support from broadly better than expected Eurozone PMIs, but faces hefty option expiries vs Dollar between 1.0195-1.0200 (1.84bln).
• Franc lags after fractionally softer anticipated headline YY Swiss CPI, but Lira remains pressured as Turkish inflation metrics rise further, USD/CHF approaching 0.9600 and USD/TRY elevated around 17.9500.
• Sterling cautious ahead of BoE on Thursday with analysts and markets split on 25/50bp hike verdict, Cable pivots 1.2150 and EUR/GBP straddles 0.8350.
• Click here for more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.0100 (695M), 1.0150 (687M), 1.0195-1.0200 (1.86BN), 1.0250 (578M)
• Click here for more detail.

FIXED INCOME

• Bond reversal extends with Bunds sub-157.00 vs 159.70 at best yesterday, Gilts under 118.00 from almost 120.00 on Tuesday and 10 year T-note just shy of 120-00 compared to 122-02.
• 2038 German supply lacklustre as demand dips and retention rises.
• Debt still feeling the after-effects of hawkish Fed commentary and eyeing further speeches in pm session.
• Click here for more detail.

COMMODITIES

• Benchmarks have been moving lower as we head into today's JMMC and OPEC+ events, sources thus far suggest production will be maintained or subject to a small increase - newsquawk preview available here.
• US Private Inventory Data (bbls): Crude +2.2mln (exp. -0.6mln), Cushing +0.7, Distillates -0.2mn (exp. +1.0mln) and Gasoline -0.4mln (exp. -1.6mln).
• Kazakhstan's Energy Minister says OPEC+ nations are to discuss the fate of the deal after 2022 at Wednesday's meeting. Current prices of USD 100/bbl are above the preferred USD 60-80/bbl corridor; OPEC+ needs to look at prices so they become more realistic.
• Three OPEC+ sources state that they see "very little chance" for an oil output increase at today's meeting, according to Reuters.
• OPEC Sec Gen says OPEC expects demand to continue to recover albeit at a slower pace than earlier this year and 2021, according to Algerian TV; Challenges to the supply of US shale is impacting global supply and demand.
• Three ships may leave Ukrainian ports daily vs one per day following the first ships successful departure, via a Senior Turkish Official.
• Spot gold is firmer as the USD pulls-back further, but the yellow metal remains well within yesterdays and recent parameters; base metals are mixed owing to broader uncertainty.
• Click here for more detail.

NOTABLE HEADLINES

• UK Tory party leadership ballots have reportedly been delayed due to risk of cyber fraud, according to The Telegraph.
• Germany's energy security law will be amended further in September, according to Reuters sources.

DATA RECAP

• German Trade Balance, EUR, SA (Jun) 6.4B vs. Exp. 0.2B (Prev. -1.0B, Rev. 0.8B); Imports MM SA (Jun) 0.2% vs. Exp. 1.3% (Prev. 2.7%, Rev. 3.2%); Exports MM SA (Jun) 4.5% vs. Exp. 1.0% (Prev. -0.5%, Rev. 1.3%).
• Swiss CPI YY (Jul) 3.4% vs. Exp. 3.5% (Prev. 3.4%); MM (Jul) 0.00% vs. Exp. -0.1% (Prev. 0.5%)
• EU S&P Global Composite Final PMI (Jul) 49.9 vs. Exp. 49.4 (Prev. 49.4); Services Final PMI (Jul) 51.2 vs. Exp. 50.6 (Prev. 50.6)
• UK S&P Global/CIPS Services PMI Final (Jul) 52.6 vs. Exp. 53.3 (Prev. 53.3); Composite PMI Final (Jul) 52.1 vs. Exp. 52.8 (Prev. 52.8)

NOTABLE US HEADLINES

• Fed's Bullard (2022 voter) said the Fed is committed to the inflation target and needs to get into more restrictive territory on rates, while he also noted that if inflation 'hangs up' higher, then they will have to be higher for longer but doesn't think a US recession will happen and believes growth in H2 will be better than H1, according to Reuters.
• White House Competition Adviser Wu is expected to leave the White House to return to academia in the coming months.
• Click here for the US Early Morning note.

CRYPTO

• Bitcoin continues to firm after eclipsing the USD 23k handle from an initial USD 22.6k trough.

APAC TRADE

• APAC stocks were mostly kept afloat with markets somewhat relieved following US House Speaker Pelosi’s safe arrival in Taiwan but with upside capped given China’s response including the announcement of military drills and bans on trading certain items with Taiwan.
• ASX 200 was dragged lower by weakness in consumer-related sectors despite better-than-expected Retail Sales.
• Nikkei 225 gained amid earnings updates and with exporters underpinned after yesterday’s resumption of the currency depreciation.
• Hang Seng and Shanghai Comp rebounded from recent losses but with the recovery contained by the geopolitical concerns and mixed Chinese Caixin Services and Composite PMI data in which both remained in expansion territory albeit with a slowdown in the latter.

NOTABLE APAC HEADLINES

• Chinese city of Yiwu imposed COVID restrictions and locked down some areas, according to Reuters.

DATA RECAP

• Chinese Caixin Services PMI (Jul) 55.5 (Prev. 54.5); Composite PMI (Jul) 54.0 (Prev. 55.3)
• Australian Retail Trade (Q2) 1.4% vs. Exp. 1.2% (Prev. 1.2%, Rev. 1.0%)
• New Zealand HLFS Job Growth QQ (Q2) 0.0% vs. Exp. 0.4% (Prev. 0.1%); Unemployment Rate (Q2) 3.3% vs. Exp. 3.1% (Prev. 3.2%)