• Equities are in the green with fresh drivers limited and markets deriving impetus from APAC upside
• DXY has dipped below 104.00 with peers generally contained, JPY near lows as Ueda underlines reasons to remain ultra-accommodative
• Energy benchmarks firmer amid numerous NHC and Offshore Alliance updates
• Bunds test Friday’s trough in a return to the bearish path of least resistance
• Looking ahead, highlights include US Dallas Fed Manufacturing, & supply from the US. Fed's Barr. ECB's Nagel & Holzmann

EUROPEAN TRADE

EQUITIES

• European bourses are in the green, Euro Stoxx 50 +0.6%, as the region derives impetus from APAC strength in holiday-thinned trade on a UK Bank Holiday.
• Sectors post similar performance and feature outperformance in Tech names after SCMP reports Chinese demand for ASML's lithography machines has already eclipsed the 2023 projection. Real Estate names lag after reports that Germany is to vote on a proposal to lower rent increase limits.
• Stateside, futures are incrementally firmer, ES +0.2%, taking cues from the above narrative with fundamentals light otherwise. The US session features commentary from Fed's Barr.
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• Click here and here for a recap of the main European equity updates.

FX

• DXY dips below 104.000 and further from Friday's 104.440 best, but the Buck retains a firm underlying bid.
• Euro regroups after losing 200 DMA, but is capped by decent option expiry interest extending from 1.0795 to 1.0900.
• Yen hovers near circa 146.63 lows as BoJ Governor Ueda underlines reasons to remain ultra-accommodative.
• Aussie fades amidst hefty option expiries vs. Greenback just above 0.6400 after a brief boost from better-than-expected retail sales data and Yuan rebound.
• Sterling sags in UK holiday-thinned trade and irrespective of BoE's Broadbent saying rates may have to stay restrictive for some time.
• Cable unable to hold above 1.2600
• PBoC sets USD/CNY mid-point at 7.1856 vs exp. 7.2854 (prev. 7.1883)
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• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Bonds back to bearish path of least resistance and pick-up in trading volumes infers more conviction on the sell-side.
• Bunds have moved convincingly below Friday's low at 86, now at the trough of 132.33-131.72 parameters.
• T-note a tad more resilient within 109-19/10 range ahead of Dallas Fed manufacturing survey, 2- and 5-year auctions.
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COMMODITIES

• Crude benchmarks are a touch firmer with the broader macro narrative deriving impetus from Chinese stimulus, though brief pressure was seen as the USD printed a fresh intra-day peak; currently, WTI & Brent Oct’23 are holding around USD 80.00/bbl and USD 84.50/bbl respectively, within relatively narrow sub-1/bbl parameters
• Gas is in the green though only modestly so as the Offshore Alliance now has the mandate from workers for potential strike action, but is yet to give notice for protected industrial action.
• An oil leak has been found in a transmission pipeline linking Kharg Island to Iran's Genaveh port, according to Tasnim. The magnitude of the spill was not specified, according to Reuters.
• Chevron (CVX) Australia LNG workers at Wheatstone offshore have voted to authorise the union to call strike action if needed; the Offshore Alliance says protected industrial action notices against Chevron (CVX) will be filed shortly.
• NHC says Tropical Storm Idalia about 125 miles south of the western tip of Cuba has maximum sustained winds of 65mph; expected to become a hurricane today.
• Spot gold is unchanged at the midpoint of USD 1913-1917/oz bounds and similarly to the USD is struggling for clear and lasting direction, base metals are firmer given Chinese stimulus.
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NOTABLE US HEADLINES

• US President Biden to deliver remarks on lowering healthcare cost on Aug 29th, according to Bloomberg.

NOTABLE EUROPEAN HEADLINES

• The UK Metropolitan Police is on high alert following a significant security breach that led to officers' and staff's details being hacked. All 47k personnel have been notified about the potential exposure of their photo, names, and ranks, according to Sky News.
• Germany’s ruling Social Democratic Party will vote on a proposal to lower limits on rent increases in a bid to tackle inflation. The proposal calls for a three-year residential rent cap of 6%, according to Bild citing a draft resolution.
• EU Council President Michel says the EU must be prepared to accept new member states by 2030, via FT citing written remarks.
• ECB's Holzmann (Hawk) sees case for rate hike if no surprises turn up; says should start debate on ending PEPP reinvestments, according to Bloomberg; behind the curve, can start assessing policy when at 4.0%.
• Fitch affirms the Czech Republic at "AA-"; outlook Negative.

NOTABLE EUROPEAN DATA

• EU Money-M3 Annual Growth (Jul 2023) -0.4% vs Exp. 0.0% (Prev. 0.6%)
• EU Loans to Non-Financials (Jul 2023) 2.2% (Prev. 3.0%); Households (Jul 2023) 1.3% (Prev. 1.7%)

GEOPOLITICS

• Russia's Investigation Committee confirmed Wagner leader Prigozhin was among those who died in the plane crash, according to Reuters.
• Russian SU-30 plane escorted a US drone Reaper over the Black Sea, according to Ria.
• Russian Foreign Minister Lavrov and the Turkish Foreign Minister are to hold discussions in Moscow, Russia soon, via Tass.
• US Trade Secretary Tai reportedly raised concerns with India over its new order mandating licenses for the import of some tech products such as personal computers, laptops, and tablets, according to a statement cited by Reuters.
• Three US marines have died and five have been seriously injured after a helicopter crashed during a military exercise in Australia, according to Sky News.
• China will hold the third China-Africa peace and security forum between August 28th and September 2nd, according to the Chinese Defence Ministry cited by Reuters.
• The Taiwan Defence Ministry said 6 Chinese aircraft crossed the Taiwan Strait median line in the past 24 hours.
• Chinese Commerce Minister met with US counterpart Raimondo on Monday; Raimondo said the US wants healthy competition with Beijing, does not intend to hinder Chinese progress, and sees many areas they can work with China, according to Bloomberg.

CRYPTO

• Bitcoin is softer after coming under some modest pressure towards the start of the European session, At the time catalysts were light though the move did occur as the USD attempted to lift off lows. As it stands, BTC holds below the USD 26k mark.

APAC TRADE

• APAC stocks kicked off the week in the green, following a similar lead from Wall Street, whilst the focus overnight was on Chinese stocks after Friday's support measures announced by authorities.
• ASX 200 was supported by the energy and gold sectors whilst the broader mining sector was subdued by Fortescue Metals Group, which missed on net expectations and reported an impairment charge.
• Nikkei 225 was also supported by its energy sector, with the index eventually surging above the 32k mark seeing some early resistance around the level.
• Hang Seng and Shanghai Comp were boosted at the open with the Mainland posting gains north of 3% as markets reacted to Friday’s measures to boost investor confidence. In Hong Kong, China Evergrande slumped 80% after resuming trade following a 17-month hiatus.

NOTABLE ASIA-PAC HEADLINES

• China's Finance Ministry said China will cut stamp duty on stock trading by half from August 28th, according to Reuters.
• The Chinese Securities Regulator said China will slow the pace of IPOs and further regulate share reductions. The regulator added that exchanges will also lower margin requirements, according to Reuters.
• China today suspended some quantitative T+0 algorithmic trading via brokers amid concerns that T+0 may encounter one-sided market conditions and lead to risk exposure, STCN media reported
• China Evergrande (3333 HK) H1 2023 (CNY): Net -33bln (prev. -64.2bln YY). Revenue 128.2bln (prev. 89.3bln). Co. said its ability to continue will depend on a successful implementation of an offshore debt restructuring plan, and successful negotiations with the rest of the lenders on repayment extensions, according to Reuters.
• China has asked some funds to refrain from net equity sales in order to boost the market, according to Bloomberg News.
• PBoC injected CNY 332bln via 7-day reverse repos with the rate at 1.80% for a CNY 298bln net injection, according to Reuters.
• Foxconn (2317 TT) founder Terry Gou is to run for the Taiwanese presidency, according to Reuters.
• New Zealand said it is to trim budget allowances and measures amid a deterioration in the global economy and particularly in China, according to Reuters.
• BoJ Governor Ueda said underlying inflation is still below 2%, which is a reason to stick to the current monetary policy approach. He added that domestic demand is still on a healthy trend, although this needs to be confirmed by Q3 data, according to Reuters. He added that for Japan, the US strength is offsetting some of China's weakness, and the weakness in China appears to be centred on the property market.
• Japan raises view on exports in August for the first time in 3 months says the trend is "picking up recently"; Overall view on economy, saying it is "recovering moderately".

DATA RECAP

• Chinese Industrial Profits (Jul) YY -6.7% (Prev. -8.3%); YTD (Jul) -15.5% (Prev. -16.8%)
• Australian Retail Sales MM Final (Jul 2023) 0.5% vs. Exp. 0.3% (Prev. -0.8%)