• APAC stocks traded mostly positive but with gains capped ahead of upcoming key risk events.
• European equity futures are indicative of a softer open with the Euro Stoxx 50 -0.3% after the cash market closed up by 0.4% on Friday.
• DXY tested 101 to the downside, EUR/USD and Cable sit on 1.11 and 1.28 handles respectively, JPY marginally outperforms.
• None of the individual parties, nor the left or right blocs were able to secure a majority in the Spanish parliamentary election.
• Looking ahead, highlights include EZ, UK & US Flash PMIs, Supply from the US, Earnings from NXP Semiconductor, Ryanair, Philips, Vodafone & Julius Baer.

US TRADE

EQUITIES

• US stocks gave up moderate gains on Friday and traded in a choppy fashion with Tech sector the laggard, while further choppiness was seen towards the end of the session which traders attributed to the Nasdaq 100's special rebalancing and ahead of this week's key risk events.
• SPX +0.03% at 4,536, NDX -0.26% at 15,425, DJIA +0.01% at 35,228, RUT -0.35% at 1,960.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Chevron (CVX) Q2 (USD) Adj. EPS 3.08 (exp. 2.98), adj. net income 5.8bln (exp. 5.6bln), rev. 6.0bln (exp. 5.5bln).

APAC TRADE

EQUITIES

• APAC stocks traded mostly positive but with gains capped ahead of upcoming key risk events including the FOMC, ECB and BoJ monetary policy meetings, as well as several big tech earnings results.
• ASX 200 was rangebound as outperformance in the energy sector was offset by losses in mining names and with sentiment also clouded after Australian flash PMIs all printed in contraction territory.
• Nikkei 225 was underpinned after reports on Friday that the BoJ is leaning towards keeping its yield curve control policy unchanged at the upcoming meeting and sees little need to act on YCC for now.
• Hang Seng and Shanghai Comp were mixed with Hong Kong pressured by weakness in the property sector and tech, while the mainland was indecisive as the NDRC’s notice to promote high-quality development of private investment counterbalanced the reduced hopes for aggressive stimulus from China’s politburo meeting where the top officials will review the economic performance for H1.
• US equity futures began the week with a non-committal tone with markets bracing for the major events.
• European equity futures are indicative of a softer open with the Euro Stoxx 50 -0.3% after the cash market closed up by 0.4% on Friday.

FX

• DXY marginally softened to test the 101.00 level to the downside albeit with price action kept to within a narrow range as the lack of pertinent weekend catalysts provided some calm before the potential central bank storm.
• EUR/USD languished on a 1.11 handle with the single currency not helped by the stalemate in the Spanish election after none of the individual parties, nor their respective left and right blocs, were able to achieve a majority.
• GBP/USD was uneventful and proceeded sideways ahead of the flash PMI data due later today.
• USD/JPY slightly pulled back after last Friday’s surge which was driven by source reports that the BoJ is likely to refrain from tweaking YCC this week, while not all are convinced with Goldman Sachs maintaining its call for an adjustment although noted that uncertainty is high.
• Antipodeans were choppy in the aftermath of the firmer PBoC reference rate setting, contractions in Australian PMI data and marginally weaker New Zealand trade figures.
• PBoC set USD/CNY mid-point at 7.1451 vs exp. 7.1795 (prev. 7.1456)

FIXED INCOME

• 10yr UST futures traded rangebound ahead of the upcoming central bank rate decisions including what markets are pricing as the final hike from the Fed in the current cycle.
• Bund futures were subdued after Friday’s choppy performance and as markets also await the ECB meeting.
• 10yr JGB futures partially held on to last week’s late gains but were well off their highs amid second-guessing regarding the BoJ’s policy decision and inflation projections.

COMMODITIES

• Crude futures were indecisive with early pressure amid lingering Chinese economic concerns and following comments from IEA's Birol that they will revise oil demand forecasts based on growth prospects.
• IEA’s Executive Director Birol said they will revise global oil demand growth projections based on the economic growth prospects of China and some other countries, while he reiterated the view that oil markets are expected to tighten in H2.
• UAE Energy Minister said the role of OPEC+ is crucial in the energy market for producers and consumers, while OPEC+ actions are crucial for the stability of markets and what it is doing is adequate.
• UK Energy Minister Shapps vowed to max out the UK’s North Sea oil and gas reserves and said Britain has no option but to extract remaining fossil fuel reserves to ensure energy security, according to FT.
• Spot Gold struggled for direction with participants awaiting the key central bank announcements.
• Copper futures were lacklustre amid the indecisive mood in China where property concerns lingered.

CRYPTO

• Bitcoin retreated and gave back the USD 30,000 status after briefly reclaiming it over the weekend.

NOTABLE ASIA-PAC HEADLINES

• China called for better financial support for private investment and is seeking private investment in thousands of projects worth CNY 3.2tln, while the state planner issued a notice to promote high-quality development of private investment. NDRC said it is to spur the activity of private investment and encourage private investment in some projects of transport, water and clean energy, while it will encourage private investment in new infrastructure and modern agriculture. NDRC said it will give 20 cities funding support each year with high private investment growth, as well as guide and strengthen financing support for private-invested projects and will encourage private investment projects to issue real estate investment trusts in the infrastructure sector, according to Bloomberg and Reuters.
• China CSRC Vice Chair Fang Xinghai led a meeting with global funds which included representatives from HongShan, Temasek, GIC and Warburg Pincus, according to Bloomberg.
• China's top diplomat Wang Yi proposed high-level official talks among China, Japan and South Korea in a meeting with the Japanese Foreign Minister this month, according to Kyodo.
• UK Foreign Secretary Cleverly postponed a planned trip to Beijing this month, according to Bloomberg.
• Hong Kong strengthened radiation inspections on seafood imports from Japan, according to Kyodo.

DATA RECAP

• Japanese Manufacturing PMI Flash SA (Jul) 49.4 (Prev. 49.8)
• Japanese Services PMI Flash SA (Jul) 53.9 (Prev. 54.0)
• Japanese Composite Op Flash SA (Jul) 52.1 (Prev. 52.1)
• Australian Manufacturing PMI Flash (Jul) 49.6 (Prev. 48.2)
• Australian Services PMI Flash (Jul) 48.0 (Prev. 50.3)
• Australian Composite PMI Flash (Jul) 48.3 (Prev. 50.1)

GEOPOLITICS

• Belarusian President Lukashenko met with Russian President Putin and claimed that Wagner fighters want to invade Poland, according to euronews.
• Russian Defence Ministry said Ukraine launched an artillery strike on a group of journalists, according to Reuters.
• Moscow's Komsomolsky Avenue near the Defence Ministry building was closed after drone fragments were found and two explosions were heard before the fragments were found, according to witnesses cited by Reuters. It was also reported that a drone hit a high-rise office building on Moscow's Likhachev Street, according to TASS.
• US Secretary of State Blinken said Ukraine has taken back 50% of land Russia seized and noted that Ukraine’s counteroffensive against Russia is tough and will play out over several months, according to a CNN interview.
• North Korea fired "several" cruise missiles into the Yellow Sea early Saturday morning, according to the South Korean military cited by Japan Times.
• G7, EU, Australia, New Zealand and South Korea urged China to help stop North Korea from evading UN sanctions by using Chinese territorial waters, according to a letter.

UK/EU

NOTABLE HEADLINES

• UK MPs urge for changes to tax relief to boost the country's regional start-ups, according to FT.
• UK Treasury will summon the heads of Britain’s largest banks for a meeting on new free-speech rules and to explain how they intend to ensure customers are not “de-banked” for their political views after former UKIP leader Farage’s account was closed by Coutts, according to FT.
• None of the individual parties, nor the left or right blocs were able to secure a majority in the Spanish parliamentary election in which the conservative People’s Party won 136 seats of the 350-seat parliament and PM Sanchez’s socialists PSOE was in second place with 122 seats, while far-right Vox was third with 33 seats and left-wing Sumar won 31 seats, according to Reuters.
• Bank of Italy is reportedly to propose Cipollone as the candidate to replace Panetta as an ECB executive board member, via FT citing sources.
• Greece’s Emergency Communications Service issued evacuation orders for part of Corfu due to wildfires, according to Sky News.