• European bourses are little changed overall after a modestly firmer open failed to gain much traction with newsflow limited, Euro Stoxx 50 +0.1%.
• Stateside, performance is very similar though futures are faring incrementally better, ES +0.2% and the NQ +0.4% remains the relative outperformer.
• DXY is back on a softer footing, below 105.00, with peers firmer though magnitudes vary
• Core benchmarks are under modest pressure but remain above the post-CPI trough with action quiet amid a limited schedule and Japanese holiday.
• Crude is extending on Wednesday's performance while spot gold is little change though base metals outperform.
• Fed's Daly: too early to declare victory on inflation, 50bp is her September baseline
• Looking ahead, highlights include US IJC & PPI, OPEC MOMR, Banxico Policy Announcement, Speech from Fed's Daly, Supply from the US.

As of 11:05BST/06:05ET

LOOKING AHEAD

• US IJC & PPI, OPEC MOMR, Banxico Policy Announcement, Speech from Fed's Daly, Supply from the US.
• Click here for the Week Ahead preview.

GEOPOLITICS

• North Korean leader Kim's sister said leader Kim recovered from suspected COVID-19 and had experienced a high fever, while she added that the COVID outbreak resulted from enemies in South Korea who sent anti-North leaflets. Furthermore, she said South Korea continues to commit crimes against humanity by sending anti-North leaflets and that strong retaliation must be taken to respond to South Korea's crimes with its puppet regime an unchangeable main enemy, according to KCNA.
• South Korea expressed regret over North Korea's groundless claim over the COVID outbreak and threats, according to Yonhap.
• US President Biden's administration is rethinking potential tariff moves after China's response to Pelosi's Taiwan trip and set aside the option of scrapping some tariffs on China or investigating adding more, for now, while President Biden has not yet made a decision on tariffs, according to sources cited by Reuters.
• Taiwan's Foreign Ministry responded to China's recent white paper on Taiwan and stated that Taiwan firmly rejects 'one country, two systems' and said that only Taiwan's people can decide its future, according to Reuters.
• US House Speaker Pelosi said they will not allow China to isolate Taiwan.
• As of Thursday afternoon, "no more than 10" Chinese and Taiwanese navy ships continued to stay close to the Taiwanese Strait median line, according to Reuters sources.
• Taiwan's President says at this moment the threat of Chinese military action has not decreased, via Reuters.

EUROPEAN TRADE

EQUITIES

• European bourses are little changed overall after a modestly firmer open failed to gain much traction with newsflow limited, Euro Stoxx 50 +0.1%.
• Stateside, performance is very similar though futures are faring incrementally better, ES +0.2% and the NQ +0.4% remains the relative outperformer.
• China vehicle sales (Jan-Jul): -2% YY (prev. +19.3%), via Industry Association. New energy vehicles sales (Jan-Jul): +120% YY.
• Click here for more detail.

FX

• DXY is back on a softer footing following an overnight session of consolidation from yesterday’s CPI-induced losses.
• G10s are firmer vs the USD to varying degrees, with the EUR, AUD, and NZD leading the gains.
• GBP and CAD are the relative laggards while haven FX reside towards the middle of the G10 table.
• Click herefor more detail.

Notable FX Expiries, NY Cut:

• Click here for more detail.

FIXED INCOME

• Core benchmarks under modest pressure but remain above the post-CPI trough with action quiet amid a limited schedule and Japanese holiday.
• USTs essentially unchanged, initial incremental upward bias dissipated and we now look to PPI, Fed's Daly & 30yr supply.
• Yield curve continues to re-steepen, though lies in yesterday's pronounced ranged while BTP-Bund remains steady at 210bp.
• Click here for more detail.

COMMODITIES

• WTI and Brent front-month futures are extending yesterday’s climb Brent Oct' extending gains above USD 98/bbl.
• Spot gold trades flat around USD 1,789/oz after briefly topping USD 1,800/oz yesterday post-CPI.
• LME copper has gained a firmer footing above USD 8,000/t amid the softer Dollar, with LME nickel the current outperformer.
• IEA OMR: Raises 2022 estimate for oil demand growth by 380k BPD to 2.21mln BPD due to more gas-to-oil switching; demand growth is expected to slow to 40k BPD in Q4 2022; declines in Russian supply is more limited than previously forecast.
• Czech pipeline operator Mero exports oil flows to the nation to resume "soon"; expects flows via Druzhba to restart "tomorrow or the day after", via Reuters.
• Click here for more detail.

NOTABLE HEADLINES

• NBH keeps its one-week deposit rate at 10.75%; as expected.

NOTABLE DATA

• UK RICS Housing Survey (Jul) 63 vs. Exp. 60.0 (Prev. 65.0)

NOTABLE US HEADLINES

• Fed's Daly said (2024 voter) it is too early to declare victory on inflation fight and pointed to price increases remaining far too high but signalled initial support for smaller rate hikes, while she noted that a 50bps hike in September is her baseline and maintained that rates should increase to just under 3.5% by year-end, according to FT.
• US House Speaker Pelosi said the House will pass the inflation reduction act on Friday, according to Reuters.
• US Treasury Secretary Yellen told the IRS Commissioner that additional IRS resources from Inflation Reduction Act should not be used to increase audits on taxpayers making below USD 400k and said that contrary to misinformation by critics, households earning 400k and below will not see an increase in the chances that they are audited, according to Reuters.

APAC TRADE

• APAC stocks took impetus from their global counterparts after softer-than-expected US CPI data spurred a dovish reaction across asset classes and unwound some of the hawkish Fed market pricing.
• ASX 200 reclaimed the 7,000 level with the tech and mining-related sectors leading the gains in the index, while financials are also positive as participants digest earnings results and updates from AMP and QBE Insurance.
• KOSPI strengthened despite the increase in COVID cases to a 4-month high and the recent devastating floods in Seoul, with strength in index heavyweight Samsung Electronics after it introduced its latest line-up of foldable smartphones and other key products.
• Hang Seng and Shanghai Comp were higher with Hong Kong lifted by tech and property stocks, although advances in the mainland were initially contained following a jump in COVID infections and with the Biden administration said to have currently set aside the option of scrapping some China tariffs or investigating adding more.

NOTABLE APAC HEADLINES

• China reported 700 (prev. 444) new coronavirus cases in the mainland for August 10th and 1,466 (prev. 650) new asymptomatic cases, while China's Sanya city reported 1,254 (prev. 410) new COVID cases on August 10th and China’s city of Yiwu imposed a city-wide lockdown for three days due to COVID, according to Reuters.

DATA RECAP

• Singapore GDP QQ (Q2 F) -0.2% vs. Exp. 0.0% (Prev. 0.7%); YY (Q2 F) 4.4% vs. Exp. 4.8% (Prev. 3.7%)