• European bourses are generally subdued with the Euro Stoxx 50 weighed on by LVMH -4.4%
• Stateside, futures are more contained pre-FOMC and as participants digest after-hours MSFT & GOOGL updates
• DXY continues to slip amid ongoing JPY strength with EUR benefitting as the three regions near policy announcements; AUD lags post-CPI
• Crude benchmarks a touch softer intraday after Tuesday’s multi-month peaks with base metals in-fitting, XAU benefits from the USD
• EGBs are cagey with drivers limited while USTs tick higher and more so at the short-end pre-Fed
• Looking ahead, highlights include US New Home Sales, FOMC Policy Announcement and Fed Chair Powell's Press Conference. Earnings from Boeing, Meta, Thermo Fisher, & Coca-Cola.

EUROPEAN TRADE

EQUITIES

• European bourses are primarily in the red but with some more mixed performance, Euro Stoxx 50 -1.0%; action which comes after numerous key earnings incl. LVMH, -4.4% which is weighing on the Euro Stoxx 50 & CAC 40 -1.4%.
• Sectors are largely reflective of the corporate updates, Consumer Products & Services lags given LVMH while Basic Resources slip after earnings/production updates from Rio Tinto and Fresnillo. While the Banking sector is torn between two-way corporate updates and an ongoing NatWest story.
• Stateside, futures are slightly mixed but yet to differ markedly from near-unchanged levels, ES -0.1%, ahead of the FOMC and further corporate heavyweights after digesting the likes of MSFT and GOOGL after-hours on Tuesday.
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• Click here and here for a recap of the main European equity updates.

FX

• DXY slips ahead of the Fed, but also amidst Yen strength pre-BoJ and a Euro bounce on the eve of ECB.
• Index fades within 101.430-080 range, as USD/JPY retreats towards 140.00 from 141.00+ peak and EUR/USD eyes the top of an expiry range spanning 1.1100-1.1000.
• Aussie undermined by sub-forecast CPI data and higher probability of RBA pause next week, AUD/USD softer between 0.6793-29 parameters, but supported by 21 and 200 DMAs.
• Loonie lags awaiting BoC minutes as crude recoils, USD/CAD closer to the top of 1.3202-1.3169 bounds.
• PBoC set USD/CNY mid-point at 7.1295 vs exp. 7.1341 (prev. 7.1406)
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• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Bonds meander either side of par pre-FOMC and with eyes on the ECB and BoJ thereafter.
• Bunds marginally underperform within a 133.67-26 range and absorbing 7 year German supply.
• Gilts also mostly adrift between 96.62-29 parameters and T-note afloat having peaked peaked at 111-29 and troughed just above Tuesday's 111-19+ low.
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COMMODITIES

• WTI and Brent futures are subdued intraday after rising to fresh multi-month highs on Tuesday amid further stimulative pledges by China alongside potential supply concerns, ahead of the FOMC.
• Spot gold is modestly firmer amid the softer Dollar with the yellow metal back above its 100 DMA (USD 1,964.25/oz today) as all eyes turn to the Federal Reserve’s decision and Chair Powell’s press conference.
• Base metals are mostly softer and take a breather from the recent China-induced gains, with 3M LME copper just dipping under USD 8,600/t from a recent peak near USD 8,700/t.
• US Energy Inventory Data (bbls): Crude +1.3mln (exp. -2.0mln), Gasoline -1.0mln (exp. -2.0mln), Distillate +1.6mln (exp. -0.1mln), Cushing -2.3mln.
• China's state planner NDRC is to increase prices of retail gasoline and retail diesel by CNY 275/t and CNY 260t respectively from July 27th.
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NOTABLE US HEADLINES

• Alphabet Inc (GOOGL) Q2 2023 (USD): EPS 1.44 (exp. 1.34), Revenue 74.60bln (exp. 72.82bln). +6.9% in pre-market trade
• Microsoft Corp (MSFT) Q4 2023 (USD): EPS 2.69 (exp. 2.55), Revenue 56.2bln (exp. 55.47bln); soft Q1 guidance. -4.1% in pre-market trade
• Snap Inc (SNAP) Q2 2023 (USD): Adj. EPS -0.02 (exp. -0.04), Revenue 1.07bln (exp. 1.05bln) -18% in pre-market trade
• Texas Instruments Inc (TXN) Q2 2023 (USD): EPS 1.87 (exp. 1.76), Revenue 4.53bln (exp. 4.36bln) -3.8% in pre-market trade
• Visa Inc (V) Q3 2023 (USD): EPS 2.16 (exp. 2.12), Revenue 8.1bln (exp. 8.06bln) -0.3% in pre-market trade
• X Corp (formerly Twitter) is offering incentives on certain ad formats within the US and UK, via WSJ citing emails; additionally, has warned brands that verified status could be lost if certain spending thresholds are not met.
• Click here for the US Early Morning note.

NOTABLE EUROPEAN HEADLINES

• London Mayor Khan urged the UK government to provide more funding to finance a more generous scrapping scheme for older cars affected by his plan to widen the Ultra Low Emission Zone to the entire capital, according to FT.

DATA RECAP

• EU Money-M3 Annual Growth (Jun) 0.6% vs. Exp. 1.0% (Prev. 1.4%)

GEOPOLITICS

• Chinese Defense Ministry said China and Russia will soon hold their third joint naval patrol in the western and northern parts of the Pacific Ocean which is not aimed at any third party or related to global or regional situations, according to Global Times.
• India "open" to Chinese investment despite border clashes, official says, according to FT.

CRYPTO

• Once again, Bitcoin is relatively contained and resides well within but at the lower-end of Monday's more pronounced USD 28.842k to 30.342k parameters. Thus far, specific drivers have been a touch limited with markets generally focused on the upcoming FOMC meeting and Powell's presser.

APAC TRADE

• APAC stocks traded mixed with most bourses lacking firm direction heading into the looming major central bank policy decisions beginning with the FOMC later today.
• ASX 200 outperformed with gains led by the mining industry and the top-weighted financials sector, while participants also reflected on the mostly softer-than-expected inflation data which showed headline CPI Q/Q was at its slowest pace of increase since 2021.
• Nikkei 225 swung between gains and losses with the mood indecisive as softer Services PPI data from Japan added to the second-guessing surrounding this week’s BoJ meeting.
• Hang Seng and Shanghai Comp were weaker after the prior day’s stimulus boost lost steam but with downside limited owing to wide expectations for further support measures and after the PBoC upped its liquidity efforts, while China also replaced the head of its central bank amid the increasing challenges facing its economy.

NOTABLE ASIA-PAC HEADLINES

• US Secretary of State Blinken said he expects to work well with new Chinese Foreign Minister Wang Yi, while it was separately reported that Japanese Chief Cabinet Secretary Matsuno said he wants to closely communicate on various levels with China including with Foreign Minister Wang Yi.
• Japan maintains its overall view on the economy and says it is "recovering moderately"; Japan raises its view on business sentiment in July for the first time in 7 months.
• Japanese Gov't official, citing BoJ's Ueda, says market sentiment continues to improve. Adds, long-term yield rate remains stable under YCC. USD/JPY is slightly volatile partly due to rate differentials. To maintain an accommodative monetary environment for firms.
• China is said to be mulling easing proposed rules that require foreign office equipment makers operating in the country to transfer key product technology to China, according to Nikkei sources.

DATA RECAP

• Australian CPI QQ (Q2) 0.8% vs. Exp. 1.0% (Prev. 1.4%); YY (Q2) 6.0% vs. Exp. 6.2% (Prev. 7.0%)
• Australian RBA Trimmed Mean CPI QQ (Q2) 0.9% vs. Exp. 1.1% (Prev. 1.2%); YY (Q2) 5.9% vs. Exp. 6.0% (Prev.
• Australian RBA Weighted Median CPI QQ (Q2) 1.0% vs. Exp. 1.1% (Prev. 1.2%); YY (Q2) 5.5% vs. Exp. 5.4% (Prev. 5.8%)
• Australian Weighted CPI YY (Jun) 5.40% vs. Exp. 5.40% (Prev. 5.60%)

Source: Newsquawk