• APAC stocks mostly traded with mild gains after the slight reprieve on Wall Street (SPX +0.34%, NDX +0.84%).
• European equity futures are indicative of a marginally higher open with the Euro Stoxx 50 future +0.1% after the cash market closed down by 0.5% yesterday.
• DXY remains on a 109 handle, EUR/USD is unable to reclaim parity and USD/JPY retraced some of its weakness.
• In commodities, crude was little changed, copper was marginally firmer and gold lacklustre.
• Looking ahead, highlights include US Philly Fed, US Retail Sales, Speech from ECB's de Guindos, SCO Summit, Supply from Spain & France.

US TRADE

• US stocks notched marginal gains with price action choppy amid the overhang of the recent hot US CPI data and with all eyes on the Fed next week to see if they deliver a more aggressive 100bp rate hike. Nonetheless, stocks ultimately closed in the green thanks to late support ahead of quad-witching expiries on Friday and with some encouragement after PPI data printed relatively in line with expectations to provide some sort of solace from the inflationary woes.
• SPX +0.34% at 3,946, NDX +0.84% at 12,134, DJIA +0.10% at 31,135, RUT +0.42% at 1,839.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US Senator Sanders was reported to block the Republican bid to avert a rail strike, according to a spokesman. It was also reported that US passenger railroad operator Amtrak said it will cancel all long-distance trains on Thursday ahead of a potential freight rail shutdown, while a White House official said they are working with other modes of transportation to see how they can step in and keep goods moving in the event of a rail shutdown.
• USTR Tai met with EU Trade Commissioner Dombrovskis and agreed to continue discussions on US EV tax credits, according to Reuters.

GEOPOLITICS

RUSSIA-UKRAINE

• Russia launched eight cruise missiles against the southern Ukrainian city of Kryvyi Rih and is aiming to disrupt water supplies, according to a senior Ukrainian official.
• US and EU reportedly increased the pressure on Turkey regarding Russian sanctions, according to FT.
• US State Department said the administration is discussing with congress measures to impose on Russia in place of state-sponsorship of terrorism designation.
• Ukrainian President Zelensky's car was involved in a traffic accident in Kyiv but he was not seriously hurt, according to a spokesman.

CHINA-TAIWAN

• US Senate Committee advances sweeping bill to boost security assistance for Taiwan, according to Reuters.

OTHER

• Russian and Chinese navies conducted joint patrols in the Pacific, according to the Russian Defence Ministry.
• Armenia said an agreement on a ceasefire was reached and hopes Azerbaijan will keep the ceasefire, according to the National Security Council Secretary cited by OC Media via Twitter.

APAC TRADE

EQUITIES

• APAC stocks mostly traded with mild gains after the slight reprieve on Wall Street where inline PPI data provided some solace from inflationary woes, although mixed data and hawkish central bank expectations scuppered a broad recovery.
• ASX 200 was led higher by outperformance in energy and financials but with upside capped after the miss on jobs data.
• Nikkei 225 eked mild gains as expectations of looming stimulus and looser border controls offset the mixed trade data.
• Hang Seng and Shanghai Comp were mixed despite the latest policy support pledges by China including an extension of tax reliefs for small firms and a CNY 200bln relending facility by the PBoC, while the easing of lockdown restrictions in some cities also failed to spur risk appetite as participants digest the PBoC MLF announcement in which it partially rolled over maturing loans and maintained the rate at 2.75%, as expected.
• US equity futures were little changed (ES Unch) with participants lacking conviction heading closer into quad witching.
• European equity futures are indicative of a marginally higher open with the Euro Stoxx 50 future +0.1% after the cash market closed down by 0.5% yesterday.

FX

• DXY was steady overnight and composed itself after pulling back from post-CPI highs and with yesterday’s inline PPI figures providing some solace from the hot inflationary print.
• EUR/USD was uneventful after its recent failed attempts to reclaim parity and with the latest comments from ECB officials providing very little in the way of fresh insight.
• GBP/USD held on to the 1.1500 handle but was restricted by near-term resistance around 1.1550.
• USD/JPY retraced some of the recent weakness and rose back above 143.00 but with advances limited amid mixed trade data and lingering speculation of potential FX intervention.
• Antipodeans traded sideways with only brief impacts seen following the modest miss on Australian jobs data and stronger-than-expected New Zealand GDP.
• PBoC set USD/CNY mid-point at 6.9101 vs exp. 6.9153 (prev. 6.9116).
• South Korea FX authorities were reportedly seen selling USD to curb the KRW's fall, according to multiple dealers cited by Reuters.

FIXED INCOME

• 10yr UST futures remained lacklustre beneath the 115.00 level after the continued curve flattening but with the recent contained PPI data helping prices off their 3-month lows.
• Bund futures traded rangebound after the latest ECB rhetoric didn't provide much to shift the dial.
• 10yr JGBs futures were briefly pressured after all metrics from the 20yr JGB auction pointed to weaker results.

COMMODITIES

• Crude was little changed as the easing of lockdown measures in China was counterbalanced by growth concerns.
• Spot gold was lacklustre amid a steady dollar and after prices recently slipped beneath the USD 1700/oz level.
• Copper traded marginally higher amid the mostly positive risk appetite and disruption due to protests in Peru.
• A group of Peruvian indigenous communities reportedly blocked a key copper transport road on Wednesday, according to Reuters citing a mining source, while the blockade is a protest over a planned expansion of a Glencore (GLEN LN) mine.

CRYPTO

• Bitcoin was slightly pressured and briefly tested the 20,000 level to the downside.

NOTABLE APAC HEADLINES

• PBoC injected CNY 400bln vs CNY 600bln maturing via 1-year MLF with the rate kept at 2.75%.
• China Securities Journal said the domestic economy is poised for a rebound in Q3.
• Japan will drop a ban on individual tourist visits and remove a cap on daily arrivals with PM Kishida expected to announce changes in the coming days, according to Nikkei.

DATA RECAP

• Japanese Trade Balance (JPY)(Aug) -2.8T vs. Exp. -2.4T (Prev. -1.4T, Rev. -1.4T)
• Japanese Exports YY (Aug) 22.1% vs. Exp. 23.6% (Prev. 19.0%)
• Japanese Imports YY (Aug) 49.9% vs. Exp. 46.7% (Prev. 47.2%)
• Australian Employment (Aug) 33.5k vs. Exp. 35.0k (Prev. -40.9k)
• Australian Unemployment Rate (Aug) 3.5% vs. Exp. 3.4% (Prev. 3.4%)
• New Zealand GDP Prod Based QQ, SA (Q2) 1.7% vs. Exp. 1.0% (Prev. -0.2%)
• New Zealand GDP Prod Based YY, SA (Q2) 0.4% vs. Exp. 0.2% (Prev. 1.2%)

EU/UK

NOTABLE HEADLINES

• UK PM Truss is to meet with US President Biden in private before the Queen's funeral, according to The Times.
• UK PM Truss is preparing to scrap the sugar tax to ease the cost of living crisis, according to The Times.
• UK Chancellor Kwarteng reportedly wants to scrap bankers' bonus cap, according to FT.
• ECB's Holzmann said interest rates will be higher in a year and the rate of inflation development was definitely underestimated, while data will be used to determine ECB moves. Holzmann also commented that ECB's actions were limited by forward guidance and that they could have started tightening earlier, but also noted that ECB's moves demonstrated a willingness to go beyond expectations.
• Sweden PM Andersson announced she will resign after losing the close election, while Moderate Party leader Kristersson said has started working on forming a new government.