• APAC stocks began the week mostly negative following on from last Friday's late retreat on Wall Street.
• Fed’s Bowman (voter) said more US rate hikes will likely be needed.
• European equity futures are indicative of a lower open with the Euro Stoxx 50 -0.3% after the cash market closed up by 0.7% on Friday.
• FX markets are contained with DXY steady just above 102, JPY marginally lags, EUR/USD eyes 1.10 to the upside.
• Looking ahead, highlights include German Industrial Output, Speeches from BoE’s Pill, Fed’s Bostic & Bowman, Earnings from Siemens Energy & Airbnb.

US TRADE

EQUITIES

• US stocks were lower on Friday in what was a choppy session after the post-earnings sell-off in Apple extended and reversed the earlier gains across the major indices seen in the aftermath of the weaker-than-expected NFP jobs report which also showed another sizeable net downward revision and catalysed a massive Treasury rally, while the above-expected average hourly earnings raised some eyebrows from an inflation perspective.
• SPX -0.53% at 4,478, NDX -0.51% at 15,274, DJIA -0.43% at 35,065, RUT -0.20% at 1,957.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed’s Bowman (voter) said more US rate hikes will likely be needed and that they should remain willing to raise the federal funds rate at a future meeting if incoming data indicate progress on inflation has stalled, while she added that monetary policy is not on a preset course, according to Reuters.

APAC TRADE

EQUITIES

• APAC stocks began the week mostly negative following on from last Friday's late retreat on Wall St as Apple shares extended on their losses post-earnings and as the regional bourses reacted to the weaker NFP and firmer-than-expected US hourly earnings.
• ASX 200 was marginally lower amid weakness in healthcare, financials and tech heading into a busy week of earnings including Australia's largest lender CBA which is set to report on Wednesday.
• Nikkei 225 initially suffered from early selling after it gapped beneath the 32,000 level at the open but then staged a recovery and returned to above the aforementioned key psychological level.
• Hang Seng and Shanghai Comp conformed to the subdued mood with mixed fortunes in Chinese developers clouding over the gains in energy and with participants cautious heading into upcoming key releases including the trade data on Tuesday followed by inflation figures on Wednesday.
• US equity futures (ES +0.3%) attempted to nurse some of Friday's late drop but with the rebound contained amid the risk-averse mood in Asia and ahead of upcoming key data releases.
• European equity futures are indicative of a lower open with the Euro Stoxx 50 -0.3% after the cash market closed up by 0.7% on Friday.

FX

• DXY traded rangebound on both sides of the 102.00 level but ultimately showed some composure after Friday’s data-induced selling albeit with price action quiet ahead of this week’s main risk events including US CPI on Thursday, while weekend comments from Fed’s Bowman had little effect in which she noted that more US rate hikes will likely be needed.
• EUR/USD was lacklustre and breached its 200-hour MA and nearby 1.1000 level to the downside.
• GBP/USD was uneventful in the absence of any major catalysts.
• USD/JPY nursed some of its recent losses and reclaimed the 142.00 status, while there were comments from former Japanese MoF official 'Mr Yen' who does not expect currency intervention.
• Antipodeans just about remained afloat despite the risk aversion and lack of pertinent drivers.
• PBoC set USD/CNY mid-point at 7.1380 vs exp. 7.1656 (prev. 7.1418)

FIXED INCOME

• 10yr UST futures were rangebound and held on to most of the spoils in the aftermath of the softer-than-expected NFP data, while attention this week turns to the US inflation data due on Thursday.
• Bund futures traded sideways and remained near Friday’s peak north of the 132.00 level.
• 10yr JGB futures tracked the recent gains in global counterparts but with further upside capped in the absence of additional BoJ purchases and after the Summary of Opinions from the July meeting provided little fresh insight in which it underscored the desire to switch to a more flexible approach.

COMMODITIES

• Crude futures were rangebound despite Saudi hiking most of its oil prices to Asia for September with the crude complex contained amid headwinds from the cautious risk sentiment.
• Saudi Arabia set September Arab light crude OSP to Asia at + USD 3.50/bbl vs Oman/Dubai and to Northwest Europe at USD + 5.80/bbl vs ICE Brent, while it set light crude OSP to the US at + USD 7.25/bbl vs ASCI, according to Reuters.
• Spot gold marginally softened as the greenback gained some composure after Friday's losses.
• Copper futures were subdued owing to the risk aversion across the Asia-Pac region.

CRYPTO

• Bitcoin eked marginal gains after several attempts over the weekend to test the USD 29,000 level to the downside was met with support.

NOTABLE ASIA-PAC HEADLINES

• China’s biggest mutual funds are nearing government limits on offshore investment as they seek higher returns abroad amid slower domestic growth, according to FT.
• EU trade chief Dombrovskis is to push China on barriers to exports and hopes to address very unbalanced ties after a surge in Chinese imports, according to FT.
• The Philippines condemned China’s Coast Guard for firing a water cannon at its vessels in the disputed South China Seas which it said was illegal and dangerous, while China said it took necessary controls against Philippines boats which ‘illegally’ entered its waters according to AFP. Furthermore, the US Embassy in the Philippines said that they stand with Philippine allies in the face of dangerous actions by China’s Coast Guard and maritime militia to obstruct a Philippine resupply mission, while Global Times’s Hu Xijin tweeted that the more US supports it, the more determined the Chinese Coast Guard will be to drive away Philippine vessels that illegally intrude.
• BoJ Summary of Opinions from the July meeting stated the Bank needs to patiently continue with monetary easing toward achieving the price stability target and in order to achieve the price stability target of 2% in a sustainable and stable manner, it is necessary for the Bank to keep supporting the momentum for wage hikes through the continuation of monetary easing. Furthermore, it was stated that given that there are increasingly significant upside and downside risks to the outlook for prices, it is appropriate for the Bank to conduct yield curve control with greater flexibility in order to respond to these risks.

GEOPOLITICS

• Ukrainian intelligence source said a sea drone struck a Russian tanker in a joint operation between Ukraine’s security service and navy, according to Reuters.
• Russian Defence Ministry said it struck Ukrainian air bases in Rivne, according to Broadcaster Geo Media. Russia’s Defence Ministry also said Russia scrambled a Su-30 jet due to a US reconnaissance drone over the Black Sea, according to Ifax.
• Russian Deputy Foreign Minister said Russia has the military and technical capabilities to eliminate threats to security in the Black Sea, according to TASS.
• Russian Foreign Ministry spokeswoman said Russia strongly condemns a Ukrainian ‘terrorist attack’ on a Russian civilian vessel in the Kerch Strait and that Russia will respond to Ukraine’s ‘terrorist attacks’, according to TASS.
• Moscow’s Mayor said a Ukrainian drone was destroyed by air defences on approach to Moscow, according to Ifax. It was separately reported that Moscow’s Vnukova Airport suspended flights although no reason was given, according to TASS.
• Participants in the Jeddah meeting regarding the Ukrainian conflict underlined the importance of continuing consultations to build common ground that will pave the way for peace, according to the statement by Saudi Arabia cited by Reuters. Furthermore, Ukraine’s allies were buoyed by the ‘constructive’ China signals with Beijing positive on engaging in future negotiations on finding a resolution to the war, according to FT.
• Turkey’s Foreign Minister discussed the Black Sea Grain initiative during a phone call with US Secretary of State Blinken, according to a Turkish Foreign Ministry source.
• Explosions were heard over the vicinity of Syria's Damascus as Syrian air defences confronted Israeli aggression which resulted in the deaths of four Syrian soldiers according to state TV.
• UK’s government is split regarding listing Iran’s Revolutionary Guard as terrorists, according to FT.
• North Korean leader Kim gave field guidance at a major munitions factory, while he inspected factory manufacturing engines for strategic cruise missiles and unmanned aerial vehicles, according to KCNA.

UK/EU

NOTABLE HEADLINES

• City of London is urging the BoE to delay bank capital rules until mid-2025 with bankers arguing that regulatory divergence would affect the UK’s ability to compete with the US, according to FT.
• UK businesses urge PM Sunak to reverse the increase in visa fees for skilled workers and warned that the additional costs of hiring from overseas would hamper efforts to plug staff shortages, according to FT.
• European companies reportedly suffered a EUR 100bln hit from Russian operations in which energy and utility groups reported over half of the combined losses, according to an analysis by FT on the direct impact of the Ukrainian war.