• European bourses are supported in tandem with pressure in European gas prices, Euro Stoxx 50 +1.7%; US futures firmer across the board
• DXY under 108.50 to the benefit of peers (ex-CHF) and in particular antipodeans and the EUR, latter aided by gas prices
• EGBs bid as benchmarks recoup from Monday's pressure, USTs in-fitting and looking to Fed's Williams
• WTI and Brent futures have pared back around half of the prior day's gains; Iraq output reportedly unaffected by political unrest
• Looking ahead, highlights include German HICP (Prelim.), US Consumer Confidence & JOLTS, Speeches from Fed's Williams & Barkin, ECB's Vasle.

As of 11:15BST/06:15ET

LOOKING AHEAD

• German HICP (Prelim.), US Consumer Confidence & JOLTS, Speeches from Fed's Williams & Barkin, ECB's Vasle.
• Click here for the Week Ahead preview.

GEOPOLITICS

IRAQ

• Iraq's oil exports have been unaffected by political unrest, according to Reuters sources.
• Iraq's SOMO can redirect more crude oil exports to Europe if needed, according to Reuters sources; SOMO began exports to Europe in June and said Iraq has adjusted export flows as a result of increased competition in Asian markets.
• Iran decides to close its land border with Iraq, Kuwait calls on its citizens to leave due to security developments, according to Sky News Arabia.
• "Military reinforcements for the Iraqi army in the vicinity of the Green Zone", according to Al Jazeera.
• Iraq security forces decide to lift nation-wide curfew, according to Reuters citing a Telegram post.

RUSSIA-UKRAINE

• Ukrainian troops broke through Russian defences in several sectors of the front line near Kherson, according to a senior advisor to President Zelensky cited by Reuters.
• Gazprom has informed Engie (ENGI FP) of a reduction in gas deliveries from today, due to a disagreement on the application of some contracts; Engie has already secured the necessary volumes to meet commitments.
• Russian Kremlin, on Nord Stream 1 maintenance, says nothing hinders Russian gas exports aside from technical problems from sanctions.
• Exxon (XOM) is looking to sell its 30% stake in the Sakhalinn-1 project, has notified Russian officials that it will sue the gov't unless they allow an exit from the project, via WSJ.

OTHER

• Solomon Islands would like to see a partnership in place to build national capacity to police EEZ, asking all partner countries to put planned naval visits/patrols on hold, until a revised mechanism is in place. This comes after China signed a pact with the Solomon Islands. US and Western allies are concerned the pact will be used to establish a Chinese military base in the region.

EUROPEAN TRADE

EQUITIES

• European bourses are supported in tandem with pressure in European gas prices, Euro Stoxx 50 +1.7%, while the FTSE 100 lags somewhat after its Bank Holiday.
• Stateside, futures are firmer across the board, ES +0.9%, with the NQ +1.2% outperforming modestly as yields ease.
• Tesla (TSLA) CEO Musk has filed an SEC filing on Twitter (TWTR); on Aug 29th, sent a letter to Twitter notifying he is terminating merger agreement for additional bases separate from bases set forth in July 8th, according to a letter.
• Click here for more detail.

FX

• DXY dips under 108.50 after seeing a mild bid overnight to a high of 108.90.
• Antipodeans lead the gains whilst EUR feels a boost from receding European gas prices.
• Haven FX are mixed vs the USD with JPY firmer and the CHF in the red.
• Click herefor more detail.

Notable FX Expiries, NY Cut:

• Click here for more detail.

FIXED INCOME

• EGBs are bid as the benchmarks recoup from yesterday’s pressure, fresh fundamentals limited though European gas pricing easing has likely assisted.
• Gilts remain subdued by over a full point, though off worst, as it catches up to the weekend's hawkish rhetoric.
• USTs are in-fitting with EZ peers and awaiting commentary from Fed's Williams; yields slightly flatter.
• Click here for more detail.

COMMODITIES

• WTI and Brent futures have pared back around half of the prior day's gains; relatively pronounced pressure once more in European gas benchmarks.
• Spot gold is modestly softer intraday and remains under its 21, 50, and 10 DMAs.
• LME copper has fallen back under USD 8,000/t as the exchange plays catch-up following the UK bank holiday.
• China was reported to provide Europe with an energy lifeline through the resale of surplus LNG, according to FT.
• UK PM candidate Truss is set to approve a series of oil and gas drilling licences in the North Sea in one of her first acts as PM, should she be elected, according to The Times
• Canada said it is invoking the 1977 pipeline treaty with the US for the second time over Enbridge's (ENB) Line 5 (540k BPD) dispute.
• Sadrist protesters in Iraq reportedly closed the oil production distribution company in Basra and there were explosions in Baghdad's Green Zone from mortars targeting the former PM's residential area, according to Iraqi Day.
• Click here for more detail.

NOTABLE HEADLINES

• Spain is to propose the EU mimics its gas price system, via El Pais.
• Germany said to be open to discussing an EU gas price cap at the September 9th summit, via Reuters citing an official.

NOTABLE DATA

• German North Rhine-Westphalia State CPI YY (Aug) 8.1% (Prev. 7.8%); MM (Aug) 0.3% (Prev. 1.1%)
• Overall, the German State CPIs are in-fitting with expectations for the mainland reading at 13:00BST/08:00ET.
• Spanish HICP Flash YY (Aug) 10.3% vs. Exp. 10.3% (Prev. 10.7%)

NOTABLE US HEADLINES

• US FDA is expected to authorize COVID booster shots targeting the most contagious strains as early as Wednesday, according to sources cited by Politico.
• Click here for the US Early Morning Note.

CRYPTO

• Bitcoin is bid but only modestly above the USD 20k mark overall and towards the mid-point of circa. USD 400 parameters.

APAC TRADE

• APAC stocks were somewhat mixed as most of the regional bourses recouped some of the prior day’s losses but with gains capped amid a slew of earnings releases and as participants look towards month-end, as well as the upcoming risk events.
• ASX 200 was led higher by the energy sector after recent gains in oil prices which printed a fresh monthly high and with strong earnings from Woodside Energy.
• Nikkei 225 outperformed and reclaimed the psychologically key 28k level.
• Hang Seng and Shanghai Comp were negative with participants digesting earnings releases and amid further COVID-related disruptions as China's Dalian region limited movements for five days and Shenzhen ordered to close the Huaqiangbei subdistrict which is a global electronics sourcing centre.
• ICBC (1398 HK) - H2 2022 (CNY): net profit 171.51bln vs. Exp. 186.4bln, NII 351.4bln vs. Exp. 360.5bln.
• Baidu Inc (BIDU) Q2 2022 (CNY): EPS 15.79 (exp. 10.46), Revenue 29.6bln (exp. 29.31bln).
• Global funds invested into Evergrande's (3333 HK) bonds have determined their own debt restructuring plan, via FT sources; demands the chair repay liabilities with own funds.

NOTABLE APAC HEADLINES

• Chinese Finance Ministry said it will make good use of local government special bonds and strictly curb new local government hidden debt in H2, while it will strive to stabilise employment and prices.
• US President Biden's administration plans to ask Congress to approve an estimated USD 1.1bln arms sale to Taiwan, according to Politico.
• PBoC has issued draft rules to regulate related transactions of financial holding firms.
• All industrial and business power usage has resumed in Sichuan as of August 30th, according to CCTV.

DATA RECAP

• Australian Building Approvals (Jul) -17.2% vs. Exp. -2.0% (Prev. -0.6%, Rev. -0.6%)
• Australian Private House Approvals (Jun) 0.7% (Prev. -2.7%, Rev. -1.8%)