• APAC stocks traded mixed as the disappointment from China’s decision on its Loan Prime Rates overshadowed its recent support efforts; Hong Kong underperformed.
• PBoC opted for a narrower-than-expected cut to the 1-year LPR alongside a surprise hold on the 5-year LPR, which is the reference rate for mortgages.
• PBoC and regulators met with bank executives and told lenders to boost loans to support the economic recovery, according to Bloomberg.
• US equity futures traded sideways and were only briefly fazed by China's benchmark rate disappointment; European equity futures are indicative of a flat open.
• Unions at Woodside Energy's North West Shelf offshore gas platforms on Sunday announced plans to strike as early as September 2nd, according to Reuters.
• Looking ahead, highlights include German PPI, Bundesbank Monthly Report, and Earnings from Zoom Video Communications.

• Click here for the Newsquawk Week Ahead summary.

US TRADE

EQUITIES

• US stocks finished mixed on Friday with the major indices relatively flat on what was a quiet trading session amid a lack of major catalysts and with little on the calendar, while attention turns to the upcoming Jackson Hole Symposium.
• SPX -0.01% at 4,369, NDX -0.14% at 14,694, DJIA +0.07% at 34,500, RUT +0.51% at 1,859.
• Click here for a detailed summary.

NOTABLE HEADLINES

• WSJ's Timiraos wrote in an article over the weekend that higher productivity and increased deficits could raise the neutral rate of interest rates, limiting Fed cuts, and suggested the era of historically low interest rates could be over.
• Tropical storm Hilary moved towards the Baja California peninsula and the southwestern US, while a tornado warning was issued for southern California.
• The system in the Gulf of Mexico has a high chance of formation. Tropical storm watches or warnings may be necessary on Monday, according to the NHC.

APAC TRADE

EQUITIES

• APAC stocks traded mixed as the disappointment with China’s decision on its Loan Prime Rates overshadowed China’s recent support efforts.
• ASX 200 was lacklustre with price action contained amid a busy week of earnings and as weakness in financials and defensives offset the gains in energy and tech.
• Nikkei 225 was underpinned after Japan announced to raise the minimum hourly wage by the most on record, although the index briefly wobbled in reaction to China’s benchmark rates before returning to session highs.
• Hang Seng and Shanghai Comp were pressured as China’s recent support efforts, including the PBoC and financial regulators’ meeting with bank executives where they told lenders to boost loans to support the economic recovery, were nullified by a narrower-than-expected cut to the PBoC’s 1-year Loan Prime Rate and the surprise decision to keep the 5-year LPR unchanged which is the reference rate for mortgages.
• US equity futures traded sideways and were only briefly fazed by China's benchmark rate disappointment.
• European equity futures are indicative of a flat open after the cash market closed down by 0.3% on Friday.

FX

• DXY traded rangebound with upside limited by resistance near the 103.50 level and after a quiet weekend of newsflow stateside where participants are focused on the Jackson Hole Symposium scheduled for later in the week.
• EUR/USD eked slight gains in quiet trade and with the single currency stuck at a sub-1.0900 level.
• GBP/USD lacked firm direction with the latest Rightmove House price data showing asking prices for UK homes suffered a 1.9% Y/Y drop in August.
• USD/JPY was choppy amid the mixed risk appetite and absence of pertinent data releases.
• Antipodeans were somewhat indecisive following the mixed signals from China’s central bank.
• PBoC set USD/CNY mid-point at 7.1987 vs exp. 7.2893 (prev. 7.2006)
• Turkish Central Bank ended implementation that stipulates a target for conversion from foreign currency deposits to FX-protected deposits and ended securities maintenance and reserve requirement practice based on the Turkish lira share of FX-protected deposits, while it stated that regulations were aimed to increase Turkish lira deposits while decreasing FX-protected deposits.

FIXED INCOME

• 10yr UST futures were subdued as yields marginally edged higher and as markets await clues on monetary policy from Fed Chair Powell’s speech at Jackson Hole on Friday.
• Bund futures continued their mild pullback from Friday’s peak amid the lack of direct catalysts.
• 10yr JGB futures tracked the losses in global peers after Japan announced a record minimum wage increase and lack of additional BoJ purchases.

COMMODITIES

• Crude futures were underpinned in an extension of Friday's gains and as unions in Australia threatened disruption for the energy complex with strike action as early as September 2nd if their bargaining claims are not met by Wednesday, while eyes remain on US hurricane season.
• Unions at Woodside Energy's (WDS AT) North West Shelf offshore gas platforms "unanimously endorsed" giving 7 working days' notice to strike if bargaining claims are not met by Wednesday, according to Reuters.
• Spot gold remained indecisive beneath the psychologically key USD 1900/oz level amid a flat dollar.
• Copper futures were choppy as China's support efforts were nullified by LPR-related disappointment.

CRYPTO

• Bitcoin was lacklustre after flatlining slightly above the USD 26,000 level throughout the weekend.

NOTABLE ASIA-PAC HEADLINES

• PBoC Loan Prime Rate 1Y (Aug) 3.45% vs. Exp. 3.40% (Prev. 3.55%)
• PBoC Loan Prime Rate 5Y (Aug) 4.20% vs. Exp. 4.05% (Prev. 4.20%)
• PBoC and regulators met with bank executives and told lenders to boost loans to support the economic recovery, according to Bloomberg. PBoC said it will better implement prudent monetary policy in a precise and powerful manner, while it will keep credit growth stable and guide smooth credit function, as well as coordinate on resolving local government debt risks and will adjust and optimise credit policies for the property sector, according to Reuters.
• China is to push for the BRICS to become a geopolitical rival to the G7 with leaders from across developing nations to meet this week, according to FT.
• US President Biden is to sign a strategic partnership deal with Vietnam in the latest bid to counter China in the region, according to Politico.
• Singapore PM Lee said during an annual policy address that Singapore is keeping up economically and expects positive growth this year, while he hopes they will avoid a recession and said inflation is coming down but will stay higher than what they are used to. Furthermore, he said there will be financial support for workers who lose jobs and announced a SGD 7bln package for ‘young’ seniors to help with retirement.

DATA RECAP

• New Zealand Trade Balance (NZD)(Jul) -1107.0M (Prev. 9.0M)
• New Zealand Exports (NZD)(Jul) 5.45B (Prev. 6.31B)
• New Zealand Imports (NZD)(Jul) 6.56B (Prev. 6.3B)

GEOPOLITICS

RUSSIA/UKRAINE

• Ukrainian President Zelensky arrived in the Netherlands for a meeting with Dutch PM Rutte, while it was also reported that Netherlands and Denmark committed to delivering F-16s to Ukraine with the first deliveries due around the new year, according to Reuters.
• Ukraine is nearing a deal with global insurers to cover grain ships, according to FT.
• Russian President Putin met high-ranking military commanders in the southern Russian city of Rostov-on-Don, according to RIA citing a Kremlin statement which did not specify the reason for the meeting.
• Russia conducted a missile strike on Ukraine’s Chernihiv which killed 5 and wounded 37.
• Russian Defence Ministry said anti-aircraft defences prevented an attack on the Belgorod region by two drones and that Russia destroyed a Ukrainian drone in the Moscow region early on Sunday, while Russia briefly halted flights to Moscow’s Vnukovo and Domodedovo airports although all Moscow airports are now operating normally.

OTHER

• China’s military said it held a joint naval and air combat readiness patrol around Taiwan on Saturday and that this is a serious warning to Taiwan independence separatist forces, while Taiwan’s Defence Ministry said early on Sunday that 25 Chinese air force planes crossed the Taiwan Strait median line during the prior 24 hours, according to Reuters.
• Taiwan’s Presidential Office said China is ignoring their international responsibilities, increasing military threats and undermining regional stability, while it added that transits of Taiwanese leaders should not be an excuse for China to pick quarrels. It was also reported that the US State Department urged China to cease military, diplomatic and economic pressure against Taiwan.
• Russia-China naval drill in the Pacific Ocean has finished, according to Russia’s Defence Ministry cited by Interfax.
• North Korean leader Kim inspected a cruise missile test and navy unit, according to Yonhap.
• South Korean President Yoon said a new chapter of South Korea-US-Japan cooperation opened up after the Camp David summit, while he added the trilateral cooperation will grow stronger as North Korean threats increase and will develop into a strong forum along with AUKUS and the Quad.
• China's Foreign Ministry said after China's dialogue with Iran and Saudi Arabia that both countries have continued to improve relations leading to the formation of a wave of reconciliation in the Middle East, while China appreciates the correct decision made by the Iranian side and will continue to support Middle Eastern countries in exploring the road of development in line with their own national conditions.
• Iran summoned the Swedish and Danish Charges d’affaires over Koran desecration in the two countries, according to IRNA.

EU/UK

NOTABLE HEADLINES

• UK PM Sunak is to spend GBP 100mln of taxpayer money on thousands of high-powered AI chips in an effort to catch up in the race for computing power, according to The Telegraph.
• Fitch affirmed Netherlands at AAA; Outlook Stable on Friday.

DATA RECAP

• UK Rightmove House Price Index MM (Aug) -1.9% (Prev. -0.2%)
• UK Rightmove House Price Index YY (Aug) -0.1% (Prev. 0.5%)