• Equities are in the green despite fading just after the European open, further upside seen on Chinese sources
• Multiple reports via State Media and BBG that China is considering rate-related action to bolster growth
• Crude benchmarks print fresh highs on the above and as Idalia intensifies into a hurricane, gas deflates slightly after marked Monday upside
• DXY continues to rotate around 104.00 with Antipodeans outperforming while the EUR fades towards marked 1.08 OpEx
• Debt futures pare gains after an initial extension in early trade, though Bunds remain in the green after a decent Bobl outing
• Looking ahead, highlights include US JOLTS, NBH Policy Announcement, Speeches from Fed's Barr & RBA’s Bullock, and Supply from the US

EUROPEAN TRADE

EQUITIES

• European bourses are in the green, Euro Stoxx 50 +0.4%, after a constructive open with catalysts light at the time. Following the open, both cash and futures pared some of this move before reverting back towards initial bests on subsequent Chinese source reports.
• FTSE 100 +1.5% outperforms as it plays catch up to gains elsewhere on Monday's UK Bank Holiday.
• As mentioned, sentiment saw some modest upside on the sources with ADRs for Chinese stocks seeing upside.
• Within Europe, sectors are all in the green featuring outperformance in Basic Resources given benchmark and above factors, Real Estate is firmer after pressure in Monday's session while Tech has made its way into the green despite initial marginal pressure.
• Stateside, futures are in the green though only modestly so with the ES and NQ posting gains of circa. +0.1%; upside which began before the Chinese rate reports, but has picked up further since those aired.
• Agricultural Bank of China (1288 HK) - H1 (CNY): net profit 133.234bln vs. prev. 128.945bln, net interest income 290.421bln vs. prev. 300.219bln, NIM 1.66%
• Click here for more detail.
• Click here and here for a recap of the main European equity updates.

FX

• DXY continues to rotate around 104.000 as demand for month-end rebalancing counters softer rates and renewed risk appetite.
• Aussie and Kiwi marginally outperform on 0.6400 and 0.5900 handles against the Buck respectively.
• Yen off worst levels vs. Dollar, but still vulnerable within a 146.60-32 range after an unexpected rise in Japanese unemployment.
• Euro wanes against Greenback and eyes big expiry at 1.0800 plus 200 DMA for support.
• The Yuan saw some two-way action before coming under pressure on source reports that Chinese banks are considering additional deposit rate cuts to support growth, subsequent reports saw some of this briefly pare-back.
• PBoC set USD/CNY mid-point at 7.1851 vs exp. 7.2854 (prev. 7.1856)
• RBA's Bullock says the impact of climate change on the neutral interest rate is not clear cut; could put upward and downward pressure on the neutral rate. Inflation is still too high, and that will be my first priority as Governor.
• Click here for more detail.
• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Debt futures pare gains after extending to the upside in early EU trade awaiting a relatively busy PM agenda.
• Bunds retain bid tone within 132.48-13 range amidst decent Bobl sale and demand for 2053 German tap.
• Gilts pullback further between 94.79-24 parameters after return from 3-day UK weekend.
• T-note holding middle ground within 109-28+/21+ bounds.
• Click here for more detail.

COMMODITIES

• WTI and Brent Oct’23 are at the top-end of USD 79.79-80.75/bbl and USD 84.11-85.11/bbl parameters. The respective peaks printed following Bloomberg source reports with support via the bullish catalysts of Hurricane Idalia as it continues to intensify as it enters the Gulf.
• Dutch TTF pulls back modestly after Monday's pronounced strike-notice-driven gains, developments since have detailed the potential action workers will take from the 7th.
• Spot gold is in narrow bounds but just about retains a positive bias as the USD picks up, while base metals were already gleaning support from the firmer APAC handover but have extended since.
• NHC says Idalia is now a hurricane and is expected to rapidly intensify into an extremely dangerous major hurricane before making landfall on Wednesday.
• Australian union said workers at Chevron's (CVX) LNG facilities to participate in rolling stoppages, bans and limitations; Industrial action will escalate each week until Chevron agrees to bargaining claims, according to Reuters. Workers at Chevron's Australian LNG facilities plan work stoppages of as long as ten hours from next week, according to Reuters
• Chilean copper miner Codelco makes further staff cuts, according to a statement cited by Reuters.
• Australian Agriculture Minister said the first shipment of Australian barley has been dispatched to China, according to Reuters.
• Ukraine's First Deputy Agriculture Minister says Ukraine's winter wheat sowing area will likely remain unchanged despite the export crisis, according to Reuters.
• Click here for more detail.

NOTABLE US HEADLINES

• US Senate Majority Leader Schumer is to host Tesla (TSLA) CEO Musk and Meta (META) CEO Zuckerberg for an AI forum next month, according to Axios.
• US Commerce Secretary Raimondo in meeting with China's Premier, US wants to work with China on climate change, AI, fentanyl crisis; the world is expecting us to step up together to solve problems.
• US FDIC is set to propose heightened rules to ensure regional banks can be safely dissolved in times of stress.
• Click here for the US Early Morning Note.

NOTABLE EUROPEAN HEADLINES

• Riksbank's Bunge says prices are still rising much too fast, right now it looks like the fight against inflation is not over yet. Says the Swedish Crown is undervalued.

NOTABLE EUROPEAN DATA

• UK BRC Shop Price Index YY (Aug) 6.9% (Prev. 7.6%); the lowest level since October 2022.
• German GfK Consumer Sentiment (Sep 2023) -25.5 vs. Exp. -24.3 (Prev. -24.4, Rev. -24.6).

GEOPOLITICS

• North Korean Leader Kim says the US has turned waters near the Korean Peninsula into the most unstable region with the danger of nuclear war, reported via KCNA. Will deliver new weapons to military units under the policy of expanding tactical nuclear weapons operations.
• US President Biden is to meet with Brazilian President Lula on September 19th, according to Reuters.
• Veteran US diplomat Mark Lambert likely to be named as Assistant Secretary for China and Taiwan, according to Reuters sources; appointment unlikely to change US' China stance.
• Taiwan's Defence Ministry says 12 Chinese military craft entered the ADIZ on Tuesday, seven craft crossed the median line.

CRYPTO

• Bitcoin is a touch softer on the session as the USD continues to inch its way higher, but remains shy of WTD best. Currently, BTC is holding just below USD 26k after dipping to a USD 25.94k low.

APAC TRADE

• APAC stocks traded with an upward bias following the positive lead from Wall Street, with little in terms of fresh catalysts to dictate price action heading into month-end.
• ASX 200 was supported by its gold, mining, and materials sectors but with the gains modest intraday, with the upside hampered by the index’s IT and Healthcare sectors.
• Nikkei 225 was caged after opening higher, with the index supported by its machinery sector, while Toyota shares waned after reports it is to suspend operations at all of its 14 Japanese assembly plants amid system failures.
• Hang Seng and Shanghai Comp saw another session in the green, with the gains in the former more pronounced as index heavyweights are again buoyed by the recent stock support measures.

NOTABLE ASIA-PAC HEADLINES

• Chinese State media reports PBoC may cut banks' RRR earlier than expected to maintain reasonable ample liquidity, according to reports.
• Chinese banks are considering additional deposit rate cuts to boost growth, according to Bloomberg; Major lenders could lower rates across key tenors by 5-20bps, the plan has been signed off by regulators and the cut could come as soon as Friday.
• China to cut rates on existing mortgages as soon as today, via Bloomberg.
• PBoC sold CNY 385bln via 7-day reverse repos with the rate at 1.80% for a CNY 274bln net injection.
• South Korea plans government spending of KRW 656.9tln (+2.8% from 2023); and sees debt-to-GDP ratio at 51% in 2024 (vs 50.4% in 2023), according to the Finance Ministry.
• Xiaomi (1810 HK) Q2 (CNY): Revenue 67.35bln (exp. 65.84bln), Net 5.14bln (prev. 2.08bln). Smartphone revenue 36.6bln. Will not declare an interim dividend for 6 months.
• Fitch affirms New Zealand at "AA+"; outlook Stable

DATA RECAP

• Japanese Unemployment Rate (Jul 2023) 2.7% vs. Exp. 2.5% (Prev. 2.5%)
• Japanese Jobs/Applicants Ratio (Jul 2023) 1.29 vs. Exp. 1.3 (Prev. 1.3)