• APAC stocks traded mixed as most bourses in the region lacked firm direction after a lacklustre handover from the US
• Apple were lower by 2% after-hours as earnings once again showed declining sales, whilst Amazon was boosted by 8.7% following solid results
• European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.4% after the cash market closed down by 0.7% yesterday
• DXY is flat just below the 102.50 mark with price action in the FX space overall contained, antipodeans marginally outperform
• Looking ahead, highlights include EZ Retail Sales, US NFP, Canadian Unemployment, OPEC+ JMMC, Speech from BoE's Pill, Earnings from Credit Agricole, Commerzbank, Maersk & Berkshire Hathaway.

US TRADE

EQUITIES

• US stocks finished with mild losses after having recovered into the NY afternoon as the acute Treasury bear-steepening lost momentum, while participants also digested several data releases including a disappointing ISM Services report which missed on the headline reading and saw a rise in the prices paid sub-index.
• SPX -0.26% at 4,502, NDX -0.11% at 13,353, DJIA -0.19% at 35,216, RUT -0.28% at 1,961.
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NOTABLE HEADLINES

• Fitch downgraded from AAA to AA+ the ratings of certain categories of debt directly tied to the creditworthiness of the US or related entities, according to Reuters.
• Apple Inc (AAPL) Q3 2023 (USD): EPS 1.26 (exp. 1.19), Revenue 81.80bln (exp. 81.69bln), Products revenue USD 60.58bln (exp. 60.67bln), iPhone revenue USD 39.67bln (exp. 39.8bln), Mac revenue USD 6.84bln (exp. 6.37bln), iPad revenue USD 5.79bln (exp. 6.33bln). Shares lower by 2.0% in after-hours trade
• Amazon.com Inc (AMZN) Q2 2023 (USD): EPS 0.65 (exp. 0.35), Revenue 134.4bln (exp. 131.5bln) Shares higher by 8.7% in after-hours trade

APAC TRADE

EQUITIES

• APAC stocks traded mixed as most bourses in the region lacked firm direction after a lacklustre handover from the US, while participants reflected on tech giant earnings and the latest PBoC support pledges.
• ASX 200 was rangebound as gains in the commodity-related sectors and financials were counterbalanced by weakness in defensives, while the RBA’s quarterly Statement of Monetary Policy provided little to shift the dial and reiterated that some further tightening may be required.
• Nikkei 225 swung between gains and losses as an early retreat beneath the 32,000 level was met with dip buying which then petered out.
• Hang Seng and Shanghai Comp were positive with gains led by the property sector after the latest policy support pledges by the PBoC which announced it is to rollout guidelines to support private firms and will expand debt financing tools, as well as implement differentiated housing credit policies.
• US equity futures were ultimately kept afloat (ES +0.4%, NQ +0.5%) although saw a bout of choppiness following the big tech earnings whereby an early boost from Amazon's strong results was offset by disappointment after Apple reported lower iPhone and products revenue in what was its third consecutive quarterly decline in sales.
• European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.4% after the cash market closed down by 0.7% yesterday.

FX

• DXY was rangebound after yesterday’s mixed data and as participants await the latest NFP report.
• EUR/USD traded uneventfully with price action in the single currency contained around 1.0950.
• GBP/USD continued its rebound from beneath the 1.2700 level in the aftermath of the BoE conclave.
• USD/JPY was choppy amid the mixed risk appetite and after the prior day’s haven flows.
• Antipodeans were kept afloat with AUD briefly supported by improving Aussie-Sino ties in which China lifted tariffs on Australian barley, although gains were capped by a light calendar and lack of surprises from the RBA’s quarterly Statement on Monetary Policy.
• PBoC set USD/CNY mid-point at 7.1418 vs exp. 7.1808 (prev. 7.1495)

FIXED INCOME

• 10yr UST futures were contained after the prior day’s continued selling and as yields sat comfortably above 4.00% across the curve, with all focus now turning to the looming BLS jobs data.
• Bund futures remained subdued after the recent global bond rout dragged prices to a 3-week low.
• 10yr JGB futures were lacklustre after selling in major peers and the absence of additional BoJ purchases.

COMMODITIES

• Crude futures plateaued after rallying yesterday on the Saudi and Russian output cut extensions.
• White House's Kirby said the US is to continue working with producers and consumers to ensure the energy market promotes growth after the Saudi decision on oil production.
• Spot gold traded sideways as participants await the incoming US jobs data.
• Copper futures held on to most of the prior day's spoils amid China support pledges.

CRYPTO

• Bitcoin kept to within a tight range amid the lack of conviction across asset classes.

NOTABLE ASIA-PAC HEADLINES

• PBoC official said RRR cuts, open market operations, MLF and all structural policy tools need to be flexibly used to maintain reasonably ample liquidity in the banking system and they will guide banks to effectively adjust mortgage interest rates and support banks to reasonably control the cost of liabilities. Furthermore, the official said monetary policy room is ample and they will step up counter-cyclical adjustment, as well as reasonably handle the interest rate level to prevent capital arbitrage, according to Reuters.
• China NDRC official said China's economy is to keep stable, improving momentum in H2 and they will strengthen policy reserves to release huge market potential, while they will study a batch of policy reserves with greater intensity, according to Reuters.
• China's Global Times tweeted that Shanghai's securities regulator will conduct on-site inspections of securities companies such as Morgan Stanley Securities and Changjiang Financing Services as it targets employee management and anti-money laundering.
• US President Biden is being urged to limit further US investment in Chinese stocks and bonds ahead of an expected new order next week, according to FT citing US House China Committee Chair Mike Gallagher. It was also reported that the House China Committee Chair held out the possibility of a subpoena in the Blackrock (BLK) and MSCI (MSCI) probe if they do not provide "fulsome" answers about investments in blacklisted Chinese companies.
• China's MOFCOM lifted anti-dumping and anti-subsidy tariffs on Australian barley from August 5th.
• RBA Statement on Monetary Policy said some further tightening may be required and the board considered hiking rates at the August meeting but decided the stronger case was to hold steady. RBA also stated that risks around inflation are broadly balanced but much depends on inflation expectations and inflation is moving in the right direction which is consistent with reaching the target by late 2025, while it added that tightening could provide some further insurance against upside inflation risks.

GEOPOLITICS

• Russian social media users reported explosions and gunfire near the Russian Black Sea port of Novorossiysk, while the Russian Defence Ministry later stated that Ukrainian forces attacked the Novorossiysk navy base with two sea drones and that the drones were destroyed, according to TASS.
• US Secretary of State Blinken said in the event of a return to the grain deal, the US will continue to make sure everyone can export food products safely including Russia. Blinken also stated they have not yet received a response from China's Foreign Minister Wang Yi on the invite to the US but expect to have an opportunity and fully expect Chinese counterparts to come to the US.
• Russian and Turkish Deputy Foreign Ministers discussed the grain deal, according to Bloomberg.
• White House's Kirby said the US remains concerned that North Korea will send munitions to Russia.
• US may put troops on commercial ships to stop Iran seizures, according to AP.

UK/EU

NOTABLE HEADLINES

• BoE Governor Bailey said rates will have to remain restrictive and it is "too early" to see victory on inflation, while he noted the last mile of the inflation fight is to take some time, according to a Bloomberg TV interview.
• UK PM Sunak is considering skipping the annual gathering of world leaders at the UN, according to the Telegraph.
• UK Chancellor Hunt asked the FCA to carry out an urgent review on concerns around "debanking" and the government will determine whether further action is necessary based on the findings. FCA is to ask the biggest banks and building societies for data on account terminations and the reasons for them, while it will provide an initial assessment of account terminations by mid-September.