• European bourses are essentially unchanged, Euro Stoxx 50 -0.1%, as an initial pronounced foray higher around the cash open that occurred without driver has dissipated.
• Stateside, futures remain modestly firmer but are similarly off best levels, ES +0.5%, ahead of Jackson Hole beginning today (Powell on Friday).
• DXY remains on a softer fitting from the APAC session, peers broadly benefitting though magnitudes differ; Antipodeans outpace, EUR lags
• Another session of two-way action for core debt, which has ultimately resulted in a pronounced move higher
• Crude benchmarks consolidate, awaiting updates to the Iranian nuclear deal; gold bid on USD downside
• Looking ahead, highlights include US GDP (2nd), PCE Prices Prelim, Jackson Hole Symposium, ECB, CBRT & Banxico Minutes, supply from the US.

As of 11:20BST/06:20ET

LOOKING AHEAD

• Looking ahead, highlights include US GDP (2nd), PCE Prices Prelim, Jackson Hole Symposium, ECB, CBRT & Banxico Minutes, supply from the US.
• Click here for the Week Ahead preview.

GEOPOLITICS

RUSSIA-UKRAINE

• US State Department said planned tribunals in Russia-controlled Mariupol are illegitimate and a mockery of justice, according to Reuters.
• US Secretary of State Blinken tweeted that Russia’s missile strike on a train station full of civilians in Ukraine fits a pattern of atrocities, while he added the US will continue with partners to stand with Ukraine and seek accountability for Russian officials.
• US President Biden should take urgent action to make the deteriorating Zaporizhia, Ukraine nuclear situation an admin. priority, via WSJ citing a bipartisan letter.
• IAEA's Grossi says we are very, very close to reaching an agreement on access to the Zaporizhia nuclear power plant, via France 24TV.

OTHER

• WSJ's Norman regarding the US response to the Iranian proposal, says "hearing this morning that the US response to Iran was much firmer than the Iranians had hoped. But that doesn't mean Iran will say no."
• Ukrainian Presidential Office says negotiating with Russia to end the war now is inappropriate and any temporary truce will mean continued aggression, according to Al Jazeera.

EUROPEAN TRADE

CENTRAL BANKS

• ECB's Lagarde says "we can no longer rely exclusively on the projections provided by our models – they have repeatedly had to be revised upwards over these past two years.".
• BoJ Board Member Nakamura says JPY has weakened significantly so far this year, high volatility has had big impact on Japan's economy; premature to tweak the BoJ's dovish guidance now, there are pros and cons to soft JPY, therefore will watch carefully but there is not much the BoJ can do as moves are driven by changes in US economy.
• South Korean Presidential Office says closely monitoring forex markets, will take timely measures to stabilise the market.
• Fed's Bostic (2024 Voter) says he has not decided whether a 50bp or 75bp increase is appropriate in September, at this point it is a coin toss, via WSJ. Key employment and inflation reports are due prior to the meeting, if data remains strong and inflation clearly doesn't soften then it may make the case for another 75bp move. Too soon to say the inflation surge has peaked, some hopeful signs. Cautioned that expectations the Fed could reverse course in short-order and reduce rates fairly soon is misguided. Upbeat on the economic outlook.

EQUITIES

• European bourses are essentially unchanged, Euro Stoxx 50 -0.1%, as an initial pronounced foray higher around the cash open that occurred without driver has dissipated since.
• Fresh drivers have been slim with the German Ifo release sparking a brief extension on initial gains of circa. 50 points in Euro Stoxx 50, for instance.
• Stateside, futures remain modestly firmer but are similarly off best levels, ES +0.5%, ahead of Jackson Hole beginning today (Powell on Friday).
• Click here for more detail.

FX

• DXY has been on a softer footing since APAC hours and briefly dipped under 108.00.
• G10s are broadly firmer vs the USD but to varying degrees, with the EUR and GBP towards the bottom of the bunch.
• Antipodeans stand as the current outperformers amid the softer Dollar and rise in base metals.
• JPY is firmer against the USD, relatively flat vs GBP and EUR, and softer vs the AUD.
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Notable FX Expiries, NY Cut:

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FIXED INCOME

• Core benchmarks have derived a pronounced upward bias, despite pronounced pressure alongside initial equity strength and post-Ifo.
• Pressure which has dissipated and given way to modest across the board strength with Bunds eyeing 151.00, Gilts above 111.00 and USTs firmer by 4 ticks.
• Yield dynamics are mixed and are modestly off earlier WTD peaks given the above action, US 7yr due,
• Click here for more detail.

COMMODITIES

• WTI and Brent October contracts consolidated in the early hours following a session of gains yesterday.
• Spot gold is edging higher in tandem with the decline in the Dollar, with the yellow metal approaching its 50 and 21 DMAs.
• Base metal futures are mostly firmer amid the softer Dollar, with 3M LME copper making its way further above USD 8,000/t.
• Caspian Pipeline Consortium says the SPM-3 inspection has completed, mooring point is fine to work, via Reuters.
• Italian government to update emergency plan for gas next week; will not announce gas rationing plan for now, according to Reuters citing government sources; to include tougher measures in case of further cut or stop of Russian gas flows.
• German Network Regulator VP says is on right track with gas storage but more must be done; will reach 85% storage by October 1st
• Click here for more detail.

NOTABLE HEADLINES

• UK car production rose for a 3rd consecutive month with output up 8.6% Y/Y to 58k units in July, according to SMMT.

NOTABLE DATA

• German Ifo Business Climate New (Aug) 88.5 vs. Exp. 86.8 (Prev. 88.6, Rev. 88.7); Expectations New (Aug) 80.3 vs. Exp. 79.0 (Prev. 80.3, Rev. 80.4); Current Conditions New (Aug) 97.5 vs. Exp. 96.0 (Prev. 97.7)
• Ifo: A recession remains on the cards; expect Q3 GDP to shrink by around half a percentage point, almost half of companies intend to increase prices in the coming three months, good news is that supply chain bottlenecks have eased significantly; not yet an all clear on bottlenecks.
• UK CBI Distributive Trades (Aug) 37 vs. Exp. -7.0 (Prev. -4.0).

NOTABLE US HEADLINES

• Click here for the US Early Morning Note.

CRYPTO

• Bitcoin is essentially unchanged but closer to the top-end of circa. USD 500 parameters that reside well within the USD 21k area.

APAC TRADE

• APAC stocks took impetus from the positive handover from Wall St but with gains capped as attention remained on the looming Jackson Hole Symposium.
• ASX 200 was led higher by commodity stocks after the recent upside in energy and precious metals.
• Nikkei 225 was underpinned as the government mulled a further loosening of COVID rules and is expected to extend local travel incentives through next month.
• Shanghai Comp was initially choppy amid the absence of Stock Connect flows after morning trade in Hong Kong was cancelled, although the mood gradually improved with Hong Kong opening for the afternoon session after the storm signal 8 was dropped and following the recent support pledges by China.

NOTABLE APAC HEADLINES

• New Zealand Retail Sales YY (Q2) -3.7% (Prev. 2.3%)
• New Zealand Retail Sales QQ (Q2) -2.3% (Prev. -0.5%, Rev. -0.9%)
• Japanese Services PPI YY (Jul) 2.1% vs Exp. 2.2% (Prev. 2.0%)

NOTABLE HEADLINES

• Chinese Industry Ministry says will accelerate research and development of new types of batteries including sodium-ion batters and hydrogen energy storage batteries; will improve supply capabilities of key resources including lithium, nickel, cobalt and platinum.
• Some of China's sate-backed financial firms are said to be pushing back on calls to support the Chinese property sector amid the exposure risk on their balance sheets, according to sources cited by Reuters.
• BoK hiked its base rate by 25bps to 2.50%, as expected, with the decision unanimous. BoK said inflation will remain high for the time being and export growth is to slow, while Governor Rhee said strong inflation could last longer than previously seen. Furthermore, Rhee noted that policies will continue to be inflation-focused for a while and said there will be no change in the 25bps rate increase stance for the foreseeable future.
• China Human Resources Ministry official said they will focus on expanding jobs and will promote fiscal, monetary and industrial policies to support job market stabilisation, according to Reuters.