• APAC stocks were negative in the aftermath of the rush of global central bank rate hikes; Nikkei 225 was closed due to a public holiday
• DXY marginally gained but with price action contained after the headwinds yesterday, EUR/USD remained firmly below the 0.9900 handle, USD/JPY retested 142.00 to the downside
• Chinese Senior Diplomat Wang Yi said US-China ties are at a low ebb; G7 Foreign Ministers' statement noted there is no change in G7 policy positions on Taiwan
• Referendums on Russian annexation begin in occupied Ukrainian territory, according to AFP News Agency
• Looking ahead, highlights include EZ, UK & US Flash PMIs, UK Mini-Budget & Speech from Fed Chair Powell
• Click here for the Week Ahead preview.

US TRADE

• US stocks were lower with cyclical weakness amid a slew of central bank rate hikes, while Treasuries sold off amid anticipation around Japanese dollar reserve sales in the aftermath of Japan's FX intervention.
• SPX -0.84% at 3,757, NDX -1.17% at 11,501, DJIA -0.35% at 30,076, RUT -2.26% at 1,722.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US House Speaker Pelosi said they are prepared to take the short-term government funding bill from the Senate, hopefully on Tuesday.

APAC TRADE

EQUITIES

• APAC stocks were negative in the aftermath of the rush of global central bank rate hikes during 'Super Thursday' and with risk appetite not helped by the absence of participants in Japan for the Autumnal Equinox Day.
• ASX 200 was heavily pressured on return from yesterday’s national day of mourning closure and took its first opportunity to react to the hawkish FOMC with the tech and consumer-related sectors the worst hit.
• KOSPI declined with the recent flurry of central bank rate hikes adding to the arguments for the BoK to continue on its hiking cycle as South Korean officials look to avert one-sided currency moves.
• Hang Seng and Shanghai Comp slightly deteriorated throughout the session as the early support from reports regarding Hong Kong and Macau potentially easing restrictions for arrivals gradually waned, while US audit watchdog officials recently arrived in Hong Kong for audit inspections as firms seek to avoid delisting from US exchanges.
• US equity futures were lacklustre overnight and prodded Thursday's lows.
• European equity futures are indicative of a relatively flat open with the Euro Stoxx 50 future +0.1% after the cash market closed down 1.9% yesterday.

FX

• DXY marginally gained but with price action contained after the headwinds yesterday from Japan’s FX intervention and with markets now looking towards Fed Chair Powell’s speech on Friday following the end of the blackout period.
• EUR/USD remained firmly below the 0.9900 handle amid a lack of drivers and ongoing geopolitical concerns.
• GBP/USD was subdued after the BoE's 50bps split-decision rate hike which included a 25bps dissent, and ahead of the UK mini-budget.
• USD/JPY retested 142.00 to the downside as APAC markets reacted to Japan’s FX intervention, but price action was relatively quiet overnight amid the holiday closure.
• Antipodeans marginally softened alongside the risk-averse mood and further yuan depreciation.
• PBoC set USD/CNY mid-point at 6.9920 vs exp. 7.0080 (prev. 6.9798).
• US Treasury said they understand Japan's action in yen intervention and acknowledged BoJ forex intervention, while it added that the US did not participate in yen intervention.

FIXED INCOME

• 10yr UST futures were subdued after yesterday’s selling pressure due to the wave of central bank rate hikes and with Japan’s FX intervention also a headwind for prices given Japan's status as the top holder of US debt.
• Bund futures remained lacklustre after the recent sell-off and comments from ECB's Schnabel’s suggesting a further rise in inflation which has been more persistent than initially thought.

COMMODITIES

• Crude was subdued by the lack of risk appetite and with recent rate hikes dampening the demand outlook.
• Russian President Putin spoke to Saudi Crown Prince MBS and discussed the question of coordination to ensure stability in the oil market, while they praised efforts within the OPEC+ framework and confirmed the intention to continue sticking to existing agreements, according to Reuters.
• US Treasury Secretary Yellen said Russia is giving enormous discounts on oil to China and India.
• Nigerian oil minister said OPEC may be forced to make further production cuts if prices continue to fall, according to Bloomberg.
• EU's ESMA proposed a temporary new emergency brake for halting trading in energy derivatives during price spikes, while the emergency brake should be calibrated at the EU level, while it added that EU carbon emission allowances are not suitable for use as collateral in energy derivatives trading.
• EU cast doubt on the ability to intervene in energy derivatives markets and concluded that big swings in power prices are not due to "market malfunction", according to FT citing the Commission presentation to diplomats on Wednesday. Furthermore, officials expressed doubt on the degree to which collateral rules could be broadened as the ESMA recommended.
• Eastward gas flows along Yamal-Europe pipeline resume, according to Gascade data.
• Spot gold traded sideways as price action calmed following this week's central bank flurry.
• Copper declined amid the risk aversion and after the dollar gradually firmed.

CRYPTO

• Bitcoin traded within a relatively tight range around the 19,400 level.

GEOPOLITICS

RUSSIA-UKRAINE

• A bipartisan group of 17 members of Congress are urging US Defense Secretary Austin to provide advanced drones to Ukraine and said the tech could be key to giving Kyiv a battlefield advantage, according to WSJ citing a letter dated Wednesday.
• Referendums on Russian annexation begin in occupied Ukrainian territory, according to AFP News Agency.

CHINA-TAIWAN

• G7 Foreign Ministers' statement noted there is no change in G7 policy positions on Taiwan and called for a peaceful resolution of China-Taiwan issues.

OTHER

• US State Department senior official said they have hit a wall on the Iran nuclear deal because of Iran's position and there has been nothing this week indicating Iranians are ready to change. The official said there will be more steps to come after Thursday's sanctions on Iran which will be to help those who are trying to express themselves, while the US is committed to concluding negotiations on the release of detained US citizens in Iran regardless of the fate of the nuclear deal and there is still debate going on with Iran's leadership on whether or not a deal is worth taking.
• US Defense Department spokesman said they are not likely to get to a deal any time soon, but still want to see a diplomatic solution on return to the JCPOA, according to Iran International.
• US Secretary of State Blinken tweeted that he had a productive conversation with Kyrgyz Foreign Minister Kulubaev at the UN General Assembly on shared goals for regional peace, cooperation and prosperity.

NOTABLE APAC HEADLINES

• Chinese Senior Diplomat Wang Yi said US-China ties are at a low ebb.
• White House Indo-Pacific coordinator said China clearly has ambitions in the Pacific which have caused concerns among Pacific Island leaders, according to Reuters.
• Hong Kong will announce today the end of mandatory hotel quarantine for overseas arrivals, according to SCMP.
• Japan PM Kishida said excessive yen movement repeatedly caused by speculation cannot be overlooked and they will take action should there be any excessive volatility in the yen, according to Reuters.

DATA RECAP

• Australian Manufacturing PMI Flash (Sep) 53.9 (Prev. 53.8)
• Australian Services PMI Flash (Sep) 50.4 (Prev. 50.2)
• Australian Composite PMI Flash (Sep) 50.8 (Prev. 50.2)

EU/UK

NOTABLE HEADLINES

• UK COVID-19 hospitalisations rose 17% in a week which is the first significant increase since July and is sparking fears of a new wave, according to The Telegraph.
• BoE warned UK Chancellor Kwarteng that the economy is in recession and it would most probably need to push interest rates higher after the tax-cutting mini budget from the Chancellor, while Bailey said "Should the outlook suggest more persistent inflationary pressures, including from stronger demand, the committee will respond forcefully, as necessary”, according to The Guardian.
• BoE's Haskel (hawkish dissenter) said it is difficult having fiscal expansion at a time when supply chains and labour market are still tight.
• ECB's Schnabel said there are reasons to believe that inflation will still rise and said the labour market is proving quite resilient, while she added that risks of a recession have risen and that inflation is more persistent than initially thought.

DATA RECAP

• UK GfK Consumer Confidence (Sep) -49 vs. Exp. -42.0 (Prev. -44.0); lowest since records began in 1974.