• APAC stocks traded mixed following on from the choppy performance stateside as participants digested data and corporate earnings.
• Apple (AAPL) is racing to develop its own generative AI tools to catch OpenAI, according to Bloomberg.
• European equity futures are indicative of a slightly softer open with the Euro Stoxx 50 -0.2% after the cash market closed down by 0.2% yesterday.
• DXY sits just above the 100 mark, AUD leads the majors post-jobs data, EUR/USD reclaimed 1.12, CNY supported  
• Looking ahead, highlights include US IJC, Philly Fed, Existing Home Sales, EZ Consumer Confidence, CBRT & SARB Policy Announcements, Supply from Spain, France & US, Earnings from SAP, ABB, JNJ, Abbott & Phillip Morris.

US TRADE

EQUITIES

• US stocks were mixed in choppy trade as participants digested soft economic data, various stock stories and the latest earnings releases, while the Nasdaq peaked at midday in New York as Apple surged to ATHs after a report that it was racing to develop its own generative AI tools to catch OpenAI, but the details were thin and the news ultimately had a negative effect on the tape with competitors.
• SPX +0.24% at 4,565, NDX -0.09% at 15,826, DJIA +0.31% at 35,061, RUT +0.45% at 1,984.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Apple (AAPL) created an internal ChatGPT-style bot for employees and is building a large language model AI framework dubbed ‘Ajax’ with the Co. racing to develop its own generative AI tools to catch OpenAI, according to Bloomberg.

AFTER-MARKET EARNINGS

• IBM (IBM) Q2 2023 (USD): Operating EPS 2.18 (exp. 2.01), Revenue 15.48bln (exp. 15.57bln). -1% after-hours.
• Tesla (TSLA) Q2 2023 (USD): Adj. EPS 0.91 (exp. 0.82), Revenue 24.93bln (exp. 24.48bln).-4.2% after-hours.
• United Airlines (UAL) Q2 2023 (USD): Adj. EPS 5.03 (exp. 4.04), Revenue 14.18bln (exp. 13.91bln). +3.3% after-hours.
• Netflix (NFLX) Q2 2023 (USD): EPS 3.29 (exp. 2.86), Revenue 8.19bln (exp. 8.29bln); Streaming paid net additions +5.89mln (exp. +2.07mln). -8.3% after-hours.

APAC TRADE

EQUITIES

• APAC stocks traded mixed following on from the choppy performance stateside as participants digested the latest data releases, corporate earnings results and performance updates.
• ASX 200 was positive with the mining industry underpinned after the world’s largest miner BHP reported higher quarterly iron ore output and with its full-year production at a record high, while the latest jobs data topped forecasts but could also be seen as a double-edged sword with further scope for the central bank to hike rates.
• Nikkei 225 was the worst performer after the latest trade data showed weaker-than-expected exports and a wider contraction of imports, although the trade balance returned to a surplus for the first time in almost 2 years.
• Hang Seng and Shanghai Comp diverged with Hong Kong lifted by early strength in the property sector after the PBoC eased cross-border funding for firms and financial institutions, while the mainland was lacklustre after the central bank unsurprisingly maintained benchmark lending rates and despite the latest guidelines for the promotion of the private economy.
• US equity futures were subdued amid pressure in Netflix and Tesla shares post-earnings.
• European equity futures are indicative of a slightly softer open with the Euro Stoxx 50 -0.2% after the cash market closed down by 0.2% yesterday.

FX

• DXY approached the 100.00 level to the downside amid pressure from several fronts including the declines against the yuan after a much firmer-than-expected reference rate by the PBoC which also maintained its benchmark LPRs and eased cross-border funding parameters, while China state banks were seen to be selling dollars to prop up CNH.
• EUR/USD mildly benefitted at the dollar’s expense and after it reclaimed the 1.1200 handle.
• GBP/USD continued to nurse post-CPI losses which had briefly dragged the pair beneath 1.2900.
• USD/JPY trickled lower from the prior day’s resistance after Japan posted its first trade surplus in 23 months.
• Antipodeans were firmer with AUD/USD further boosted by better-than-expected jobs data.
• PBoC set USD/CNY mid-point at 7.1466 vs exp. 7.2233 (prev. 7.1486)
• Chinese state banks were reportedly seen selling dollars to prop up CNH.

FIXED INCOME

• 10yr UST futures softened after the prior day’s choppy performance as yields marginally edged higher overnight, while the attention turns to upcoming data releases including Jobless Claims, Philly Fed and Existing Home Sales.
• Bund futures languished near the prior day’s lows with price action lacklustre despite the dovish rhetoric from ECB's Stournaras who stated that more tightening could hurt the economy and another 25bps hike would be enough.
• 10yr JGB futures traded rangebound but were kept afloat after mixed trade data and with the BoJ in the market for JPY 1.75tln of JGBs on top of its fixed-rate operations.

COMMODITIES

• Crude futures struggled for direction after yesterday's fluctuations and bearish inventories.
• China's June imports of Russian oil reached 2.65mln bpd which was a record for the month.
• Spot Gold edged higher with the precious metal underpinned by a weakening dollar.
• Copper futures were positive amid the latest Chinese support-related headlines.

CRYPTO

• Bitcoin was indecisive in which prices oscillated back and forth of the key USD 30,000 level.

NOTABLE ASIA-PAC HEADLINES

• PBoC 1-Year Loan Prime Rate (Jul) 3.55% vs Exp. 3.55% (Prev. 3.55%)
• PBoC 5-Year Loan Prime Rate (Jul) 4.20% vs Exp. 4.20% (Prev. 4.20%)
• PBoC eased cross-border funding through the macro-prudential adjustment parameter for firms and financial institutions which was raised to 1.50 from 1.25, according to Reuters.
• China is reportedly considering mortgage easing to spur buying in the large cities, according to Bloomberg.

DATA RECAP

• Japanese Trade Balance Total Yen (Jun) 43.0B vs. Exp. -46.7B (Prev. -1372.5B)
• Japanese Exports YY (Jun) 1.5% vs. Exp. 2.2% (Prev. 0.6%)
• Japanese Imports YY (Jun) -12.9% vs. Exp. -11.3% (Prev. -9.9%)
• Australian Employment (Jun) 32.6k vs. Exp. 15.0k (Prev. 75.9k)
• Australian Unemployment Rate (Jun) 3.5% vs. Exp. 3.6% (Prev. 3.6%)
• Australian Participation Rate (Jun) 66.8% vs. Exp. 66.9% (Prev. 66.9%)
• Australian NAB Business Confidence (Q2) -3 (Prev. -4)

GEOPOLITICS

• Russian President Putin said Russia showed miracles of tolerance when it renewed the grain deal and that Western grain deal partners did not intend to implement the deal, while he added if all conditions are met, Russia will immediately return to the grain deal and stated that a continuation of the grain deal in the form which it existed had lost all meaning.
• White House warned that Russia may expand their targeting of Ukrainian grain facilities to include attacks against civilian shipping in the Black Sea, according to Reuters.
• US sanctioned 14 Iraqi banks in a crackdown on Iran’s dollar trade after uncovering that they engaged in money laundering and fraudulent transactions in which some may have involved sanctioned individuals, according to WSJ.
• China's ambassador to Washington said China's top priority is to stop Taiwan's Vice President from visiting the US next month, according to Reuters.

UK/EU

NOTABLE HEADLINES

• BoE's Ramsden said the MPC will continue to monitor closely indications of persistent inflationary pressures in the economy and if there is evidence of further persistent pressures then more tightening would be required, while he noted CPI inflation has begun to fall significantly but remains too high. Ramsden also commented that they cannot rule out that the next interest rate cycle will get back to the zero lower bound and need headroom for new QE.
• ECB's Stournaras said inflation is falling and more tightening could hurt the economy, while another 25bps hike would be enough, according to an interview with CGTN Europe.
• EU trade chief Dombrovskis said he is hopeful of a breakthrough in talks with the US regarding the steel dispute but will not support any US proposal that flouts global standards and said the US will not be able to resolve the dispute through a deal that discriminates against other countries, according to FT.