• APAC stocks were mostly positive as the region followed suit to the gains on Wall Street, albeit growth concerns lingered.
• European equity futures are indicative of a marginally higher open with the Euro Stoxx 50 future +0.3% after the cash market closed higher by 0.3% yesterday.
• DXY remained steady around 106.50, EUR/USD held support at 1.0150, G10 FX was overall contained.
• Crude remained subdued following recent soft data releases from the US & China and progress on the Iranian nuclear deal.
• Looking ahead, highlights include UK Unemployment, German ZEW, US Building Permits/Housing Starts, Industrial Production, Supply from UK & Germany, Earnings from Walmart, Home Depot, Delivery Hero & Pandora.

US TRADE

• US Stocks were firmer with a bias to tech/growth due to the yield impulse in which the Treasury curve bull-steepened after the big tumble in US survey data, while the energy sector was pressured amid some progress on the Iran nuclear deal. However, the gains in stocks were limited and trading conditions were thin which made it hard to infer too much from the price action.
• SPX +0.35% at 4,295, NDX +0.75% at 13,667, DJIA +0.45% at 33,912, RUT +0.30% at 2,019
• Click here for a detailed summary.

NOTABLE US HEADLINES

• US President Biden's administration is making hundreds of thousands more vaccine doses available to support the Monkeypox response in which the HHS noted up to 442k doses will be available for states and jurisdictions to order under accelerated phase 3 of the National Vaccination Strategy, according to Reuters.

GEOPOLITICS

CHINA-TAIWAN

• China's Taiwan Affairs Office sanctioned seven Taiwanese officials for supporting Taiwan independence, according to state media. Taiwan's Foreign Ministry later stated regarding China's sanctions and stated that they cannot accept threats, while President Tsai separately commented that peace and stability of the Taiwan Strait are critical to the stability of the global supply chain of high-tech products, according to Reuters.

RUSSIA-UKRAINE

• Russian Minister of Defence Shoigu and UN's Guterres discussed conditions for the safe functioning of the Zaporizhzhia nuclear plant in a phone call, according to Ria.
• Russian diplomat said it is too dangerous for the IAEA mission to go through Kyiv to visit the Zaporizhzhia nuclear power station and that the IAEA mission cannot deal with the demilitarisation of the plant, according to Reuters.

OTHER

• Iran responded to the EU's draft nuclear deal and expects a response in the next two days, according to a source cited by ISNA. It was also reported that an adviser to the Iranian negotiating delegation told Al-Jazeera they are not far from an agreement and chances of reaching a nuclear deal are very high.
• US State Department said it will respond to the EU proposal to revive the nuclear deal privately to the EU coordinator and said the only way to achieve a mutual return to the deal is for Tehran to abandon extraneous demands. Furthermore, it added that if Iran cannot accept a mutual return to the JCPOA, the US is equally prepared to continue vigorous enforcement of its sanctions.

APAC TRADE

EQUITIES

• APAC stocks were mostly positive as the region followed suit to the gains on Wall Street but with upside limited as economic slowdown concerns lingered.
• ASX 200 traded higher amid a deluge of earnings and with the index led by the mining sector including BHP shares after the industry giant reported a record FY underlying net and dividend.
• Nikkei 225 lacked direction amid the absence of any major fresh macro drivers and alongside a choppy currency.
• Hang Seng and Shanghai Comp were initially kept afloat by support-related optimism with developers encouraged after reports that China is considering issuing government-guaranteed bonds to provide liquidity to certain developers, while PBoC-backed press noted that China needs additional policy stimulus to increase economic growth. However, the Hang Seng later pulled back ahead of the European open to slip below 20k.
• US equity futures were rangebound after tailwinds from the softer yield environment dissipated overnight. ES -0.1%.
• European equity futures are indicative of a marginally higher open with the Euro Stoxx 50 future +0.3% after the cash market closed higher by 0.3% yesterday.

FX

• DXY traded flat and held on to the prior day’s gains after having climbed above the 106.00 level on the back of recent losses in most of its major counterparts and despite the dismal NY Fed Manufacturing survey.
• EUR/USD remained lacklustre but off its lows after bouncing off support at 1.0150 although the recovery was minimal amid ongoing economic headwinds.
• GBP/USD lacked excitement owing to the quiet macro newsflow and with price action stuck near 1.2050.
• USD/JPY was choppy amid the indecisive mood in Tokyo and with the Japanese currency taking a breather from yesterday’s outperformance against the dollar which was helped by narrowing yield differentials.
• Antipodeans were indecisive with mild tailwinds seen in AUD/USD after the RBA meeting minutes reiterated the board expects to take further steps in the process of normalising monetary conditions in the months ahead but is not on a pre-set path.

FIXED INCOME

• 10yr UST futures kept afloat after the prior day’s bull-steepening which was triggered by the large decline in the US survey data, although price action was muted overnight ahead of Wednesday’s FOMC Minutes release.
• Bund futures held on to most of yesterday’s gains amid lingering economic concerns for the bloc which were exacerbated by the declining Rhine water levels.
• 10yr JGBs futures gained amid the indecisive mood in Tokyo with further upside seen as the dust settled from the mixed 5yr JGB auction.

COMMODITIES

• Crude remained subdued amid economic growth concerns after recent soft data releases from the US and China, with oil prices further pressured by the progress towards an Iranian nuclear deal in which Iran responded to the EU's draft nuclear deal and an adviser suggested that chances of reaching a deal were very high.
• US total shale regions oil production for September is seen up about 673k BPD at 93.835mln BPD (prev. 764k BPD rise in August), while EIA said US oil output from top shale regions in September is due to increase to the highest since March 2020, according to Reuters.
• Spot gold traded rangebound with the precious metal contained by a steady greenback.
• Copper lacked firm direction as lingering growth concerns were offset by China support hopes.

CRYPTO

• Bitcoin was indecisive and oscillated around the 24,000 level.

NOTABLE APAC HEADLINES

• China's NDRC said macro policies should be strong, reasonable and moderate in expanding demand actively, while it will roll out practical measures to support starting up businesses and job employment, according to Reuters.
• PBoC-backed Financial News front page report stated that China needs additional policy stimulus to increase economic growth, while Securities Times suggested the recent surprise PBoC rate cut could be the first in a series of measures to stabilise growth.
• China is to consider issuing government-guaranteed bonds to provide liquidity to certain developers.
• RBA Minutes from the August 2nd meeting stated the board expects to take further steps in the process of normalising monetary conditions in the months ahead, but is not on a pre-set path and seeks to do this in a way that keeps the economy on an even keel. The minutes also reiterated that members agreed it was appropriate to continue the process of normalising monetary conditions and that inflation was expected to peak later in 2022 and then decline back to the top of the 2%-3% range by the end of 2024.
• Australian Bureau of Statistics will begin publishing a monthly CPI indicator with the first publication on October 26th to coincide with the release of the quarterly CPI data, while it added that quarterly CPI will continue to be the key measure of inflation.

EU/UK

NOTABLE HEADLINES

• UK's Unite union said more than 500 port workers at Liverpool docks will strike over pay, according to Reuters.