• European bourses modestly extended on the gains seen at the open despite a lack of fresh fundamental; US equity futures trade sideways 
• DXY has been waning off its 109.92 best towards 109.50, but the Buck extended gains against some EM currencies
• Choppy price action seen in the fixed income and crude complexes; spot gold eyes multi-year lows
• White House said the tentative railway labour agreement reached is an important win for the economy; union needs to ratify deal
• Looking ahead, highlights include US Philly Fed, US Retail Sales, SCO Summit

15th September 2022

LOOKING AHEAD

• US Philly Fed, US Retail Sales, SCO Summit
• Click here for the Week Ahead preview.
• Click here for the Shanghai Cooperation Organization (SCO) Summit primer.

GEOPOLITICS

RUSSIA-UKRAINE

• Russian Foreign Ministry spokesperson says ammonia pipeline exports were blocked by the Ukrainian side.

CHINA-TAIWAN

• China has lodged solemn representation with the US side on the US Senate panel to boost ties with Taiwan, according to Reuters.

ARMENIA-AZERBAIJAN

• 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.

OTHER

• South Korean President Yoon is to hold one-on-one meetings with US President Biden and Japanese PM Kishida next week, according to Yonhap.
• Russian President Putin and Turkish President Erdogan are to discuss deliveries of Russian gas and partial payments in TRY and RUB, according to Sputnik sources
• Russian President Putin said work on a "strategic" Russia-Iran cooperation agreement are at a "final stage", Sputnik reports.

EUROPEAN TRADE

EQUITIES

• European bourses modestly extended on the gains seen at the open despite a lack of fresh fundamental catalysts, but ahead of Q3 quad-witching tomorrow.
• European sectors are mostly firmer but with no defensive/cyclical bias.
• Stateside, US equity futures trade sideways with a mild upside bias and a relatively broad-based performance seen across the major contracts.
• Click here for more detail.

FX

• DXY has been waning off its 109.92 best towards 109.50, but the Buck extended gains against some EM currencies.
• Divergence is seen between the traditional havens, with CHF gaining and JPY among the laggards.
• The rest of the G10s are trading relatively flat against the USD.
• Click here for more detail.

FIXED INCOME

• Choppy and erratic price action is seen in the complex.
• The short end of the UK rate curve stages a more emphatic and impressive recovery to the extent that the ripples are reaching Gilts
• Bunds sit midway between 143.63-142.83 parameters, OATs and Bonos have recouped some pre-French and Spanish auction downside
• T-note is lagging within a 114-20+/115-01 range ahead of a very busy US agenda.
• Click here for more detail.

COMMODITIES

• WTI and Brent are choppy after settling higher yesterday,
• Spot gold meanders just above its YTD low (USD 1,680.25/oz) and the 2021 trough at 1,676.10.
• Base metals are flat/mixed in directionless trade, with 3M LME Copper in a tight range under USD 8,000/t.
• Russia's Gazprom says demand rises for long-term Russian gas export contracts including from Europe, via Al Jazeera
• Click here for more detail.

CRYPTO

• Bitcoin meanders around USD 20k and Ethereum fell under USD 1.6k after completing the Ethereum Merge.

NOTABLE EUROPEAN DATA

• ECB's Makhlouf said persistent inflation is damaging to economic stability, via Bloomberg.
• ECB Vice President de Guindos noted that spreads are a little wider, but are under control. He said deteriorating inflation outlook with record-high inflation rates expected to stay elevated, well above our target, with risks primarily on the upside.

NOTABLE US HEADLINES

• White House said the tentative railway labour agreement reached is an important win for the economy; rail workers will get better pay, improved working conditions, peace of mind on health care costs, via Reuters.

APAC TRADE

• 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.

NOTABLE APAC HEADLINES

• PBoC injected CNY 400bln vs CNY 600bln maturing via 1-year MLF with the rate kept at 2.75%.
• 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.
• 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%)