• European bourses are firmer across the board as hawkish yield action in the EZ has eased from yesterday's recent peaks, Euro Stoxx 50 +0.8%.
• Stateside, futures are contained and flat with all focus on the NFP report.
• DXY continues to pullback from its approach of 110.00, now around 109.10 to the benefit of peers ex-JPY
• Comparably contained session overall thus far though Bunds are holding at the lower end of a 85 tick range in limited newsflow pre-NFP; USTs Unch.
• WTI Oct and Brent Nov futures are firmer on the day amid a softer Dollar and narrowing prospects of an imminent Iranian Nuclear deal.
• Looking ahead, highlights include US NFP & Factory Orders.

As of 11:10BST/06:10ET

LOOKING AHEAD

• US NFP & Factory Orders.
• Click here for the Week Ahead preview.

GEOPOLITICS

RUSSIA-UKRAINE

• Russian President Putin said Ukraine is an anti-Russian enclave that is threatening Russia and that Russia is unbowed by western sanctions, according to FT.
• "The Russian Embassy in Washington reacted to a message about the proposal of the US authorities to set a price ceiling for Russian oil, saying that Moscow would not supply fuel on non-market terms", according to Interfax.
• European G7 Official says, regarding a potential Russian oil price cap, that a deal is likely but it is unclear how much detail will be provided, via Reuters; however, other officials have said that China and India have expressed interest in purchasing Russian oil at an even lower price, in line with the cap.
• Russia's Kremlin will stop selling oil to countries which support price caps for Russian oil; will ship oil to countries which act in accordance with market rules.
• G7 finance ministers set to announce deal on Russian oil price cap this afternoon, officials tell FT; cap would be effective in line with the EU’s embargoes on Russian oil imports.
• Ukraine President Zelenskiy says the nation is ready to raise electricity exports to EU nations, even despite all difficulties, Ukraine can meet 8% of Italy's consumption.
• Two inspectors from the IAEA are to stay at the Zaporizhia nuclear plant on a permanent basis, according to a Russian official cited by Ria.
• Russia's Kremlin says only one turbine is operational at the Nord Stream 1 gas pipeline station, reliability of the system is under threat.

CHINA-TAIWAN

• Taiwan's Premier commented regarding the recent shooting down of a drone in which he said that they will do the most appropriate thing for the protection of Taiwan and that they repeatedly warned about encroaching on their doorstep. Furthermore, he said China should exercise restraint and not trigger incidents, as well as noted that Taiwan will not provoke, according to Reuters.

IRAN

• Iran sent a constructive response to US proposals aimed at reviving the nuclear deal in which Iran's response was aimed at finalising negotiations, according to state media cited by Reuters. However, it was later reported that the US said the latest Iran response regarding the nuclear deal is not constructive, according to AFP.
• European diplomat says the Iranian response to US comments on the draft JCPOA look "negative and not reasonable", another source adds the reply does "not look good at all", via Iran International English.
• EU official says Iran's response was "a disappointing response when we could have closed, and definitely an unreasonable one.", according to WSJ's Norman.
• Adviser to the Iranian negotiating delegation say "an agreement could be signed within days, as the matter is not complicated, and this depends on the American position", via Al Jazeera.

OTHER

• South Korean national security adviser said South Korea, Japan and the US agreed there will be no soft response in the event of a North Korean nuclear test and they agreed to jointly respond to acts disturbing global supply chains, according to Yonhap.
• North Korea accused the newly appointed U.N. special rapporteur on its human rights situation of being a "puppet" of the US, according to Yonhap.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer across the board as hawkish yield action in the EZ has eased from yesterday's recent peaks, Euro Stoxx 50 +0.8%.
• Stateside, futures are contained and flat with all focus on the NFP report.
• Alphabet's Google (GOOG) is planning to accept the use of third-party payment services on its smartphone app in national such as Japan and India but not the US, according to the Nikkei
• Click here for more detail.

FX

• DXY's overnight pullback has picked up pace in early European hours.
• The EUR stands as the best performer alongside reports that Nord Stream 1 flows are expected to resume on Saturday.
• Non-US dollars are all modestly firmer to varying degrees, whilst JPY fails to benefit from the dollar weakness.
• Yuan shrugged off another notably firmer-than-expected CNY fixing overnight.
• Click herefor more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 0.9850 (645M), 0.9875 (340M), 0.9900 (1.8BLN), 0.9925 (352M), 0.9950 (610M), 0.9975-80 (446M), 1.0000-05 (1.94BLN), 1.0020-25 (1.44BLN), 1.0050 (1.01BLN)
• USD/JPY: 138.00 (1.34BLN), 138.25-30 (380M), 138.65 (323M), 139.00 (250M), 139.25 (200M), 139.50 (300M), 140.00 (560M), 140.50 (260M)
• Click here for more detail.

FIXED INCOME

• Comparably contained session overall thus far though Bunds are holding at the lower end of a 85 tick range in limited newsflow pre-NFP.
• Currently, the Bund low is circa. 10 ticks above 147.00, with yesterday’s 146.78 trough in focus and then 145.97/87 thereafter.
• Gilts and USTs are very similar thus far in that both benchmarks are essentially unchanged.
• Click here for more detail.

COMMODITIES

• WTI Oct and Brent Nov futures are firmer on the day amid a softer Dollar and narrowing prospects of an imminent Iranian Nuclear deal.
• Spot gold edges higher as the Dollar remains weak, with the yellow metal back on a 1,700/oz+.
• Base metals are mixed LME copper softer around the USD 7,500/t.
• Click here for more detail.

NOTABLE HEADLINES

• British Chambers of Commerce said the UK is already in the midst of a recession and it expects the UK economy to decline for two more periods following the contraction in Q2, while it also sees inflation to reach 14% later this year, according to Bloomberg.
• EU warned UK Foreign Secretary Truss against triggering Article 16 and said they will refuse to engage in serious talks on reforms to the post-Brexit deal unless she takes the “loaded gun” of unilateral legislation off the table, according to FT.

NOTABLE DATA

• EU Producer Prices YY (Jul) 37.9% vs. Exp. 35.8% (Prev. 35.8%, Rev. 36.0%); MM (Jul) 4.0% vs. Exp. 2.5% (Prev. 1.1%, Rev. 1.3%)

NOTABLE US HEADLINES

• Fed's Bostic (2024 voter) said the Fed has work to do regarding inflation and is a long way from 2%, while he added that the Fed has got to get the economy to slow down. Bostic also commented that the balance sheet is to be increasingly MBS concentrated and the Fed may have to sell MBS from its balance sheet, according to Bloomberg.
• Click here for the US Early Morning Note.

CRYPTO

• Bitcoin has reclaimed the USD 20k mark but the upward move is yet to gain any real traction amid the broader contained price action.

APAC TRADE

• APAC stocks were indecisive with price action relatively rangebound after the mixed lead from the US and with the region lacking firm commitment as participants await the upcoming US NFP jobs data.
• ASX 200 was lacklustre as earnings releases quietened and with strength in financials offset by losses across the commodity-related sectors.
• Nikkei 225 traded subdued amid underperformance in large industrials although losses in the index were stemmed by retailers after several reported strong August sales.
• Hang Seng and Shanghai Comp were mixed as Hong Kong underperformed amid notable losses in developers and with the mainland choppy but ultimately kept afloat after the PBoC recently cut rates on its Standing Lending Facility by 10bps from August 15th and after several officials pledged measures.

NOTABLE APAC HEADLINES

• PBoC set USD/CNY mid-point at 6.8917 vs exp. 6.9202 (prev. 6.8821).
• PBoC official Ruan said monetary policy is to further improve cross-cyclical adjustments and maintain stable and moderate credit development, while they will keep liquidity reasonably ample. PBoC will also better coordinate structural and aggregate policy tools but will avoid flood-like stimulus and keep prices stable. Furthermore, the PBoC said China has not taken excessive monetary policy stimulus since the pandemic, leaving room for subsequent policy adjustments and that balanced consumer prices also create favourable conditions for monetary policy adjustments, according to Reuters.
• PBoC adviser Wang said banks need to increase financial support for infrastructure and that infrastructure is restricted by local government debt levels, while Wang added that they need to ensure property companies' financing needs are met, according to Reuters.
• China's securities regulator official said they will promote new legislation for overseas listings and will implement the China-US audit agreement, as well as continue strengthening communication with foreign institutional investors, according to Reuters.
• China's banking regulator official said they will steadily resolve the risks faced by small and medium-sized financial institutions, while they will improve monitoring and disposal of debt risks of large companies, according to Reuters.
• Japanese Finance Minister Suzuki said it is important for currencies to move stably reflecting economic fundamentals, while he noted that recent FX moves are big and they will take appropriate action on FX if necessary. Suzuki also stated that they are watching FX with a sense of urgency and will brief the media after the G7 finance ministers meeting tonight.

DATA RECAP

• Korea (Republic of) CPI Growth MM (Aug) -0.1% vs. Exp. 0.3% (Prev. 0.5%); YY (Aug) 5.7% vs. Exp. 6.1% (Prev. 6.3%)