• APAC stocks traded positively following the JOLTS-induced gains seen on Wall Street, although Mainland China waned throughout the session.
• DXY was steady after the prior day’s slump, with the index finding overnight support near 103.50 while AUD was dented by softer-than-expected CPI.
• BoJ Board Member Tamara said it is appropriate to keep easy policy now and he doesn’t expect the 10yr JGB yield to hit 1.0%.
• European equity futures are indicative of a firmer open, with the Euro Stoxx 50 future +0.4% after cash markets closed +0.8%.
• Looking ahead, highlights include German & Spanish CPI, US ADP National Employment, US GDP Estimates (Prelim) & PCE Prices Prelim (Q2), Speech from ECB's Centeno, Supply from Germany & Italy.

US TRADE

EQUITIES

• US stocks and bonds surged on Tuesday with the majority of the upside supported by the dovish JOLTS data, alongside a weak consumer confidence print which ultimately led to more dovish Fed pricing.
• SPX +1.45% at 4,497, NDX +2.15% at 15,376, DJIA +0.85% at 34,852, RUT +1.42% at 1,895.
• Click here for a detailed summary.

NOTABLE US HEADLINES

• Cleveland-Cliffs (CLF) has reached a tentative agreement with the United Steelworkers (USW) on a new 3-year labour agreement, according to Reuters.

APAC TRADE

EQUITIES

• APAC stocks traded positively across the board following the JOLTS-induced gains seen on Wall Street and in the run-up to month end.
• ASX 200 saw its upside driven by the industrial sector and closely followed by its gold sector, with a further boost seen from the softer-than-expected Aussie CPI data.
• Nikkei 225 saw its machinery sector leading the gains, although the index’s upside is hampered by the recent gains in the JPY.
• Hang Seng and Shanghai Comp both opened with gains as the region conformed to the global risk appetite, with the Shanghai Comp on a more cautious footing after US Commerce Secretary Raimondo suggested US firms complain that China is “un-investable”, while participants also awaited the speculated mortgage rates cuts. In other news, China is reportedly exploring ways to make its own AI memory chips despite US sanctions, according to SCMP sources.
• US equity futures held onto the prior day's gains and maintained an upward bias.
• European equity futures are indicative of a firmer open, with the Euro Stoxx 50 future +0.3% after cash markets closed +0.8%.

FX

• DXY was steady after the post-JOLTS slump, which dragged the index from a 104.36 high to a 103.36 trough. In APAC hours, the index meanders just above 103.50 in a tight range.
• EUR/USD remained north of 1.0850 after attempting to reach 1.0900 yesterday, but only managed to print a 1.0891 peak. For reference, the pair’s 21 DMA sits at 1.0901 today with the 10 DMA at 1.0850.
• GBP/USD traded on either side of its 100 DMA (1.2644) following the prior session’s dollar-induced boost, with near-term upside levels including the 10 DMA (1.2674) and 21 DMA (1.2697).
• USD/JPY trimmed some of the prior day's losses and regained a footing above 146.00 while BoJ Board Member Tamura suggested current policy remains necessary.
• Antipodeans were subdued following yesterday's outperformance, with the AUD taking a hit following a notable cooling in YY CPI in July, although the Kiwi remained the laggard after being yesterday's top G10 gainer.
• PBoC sets USD/CNY mid-point at 7.1816 vs exp. 7.2773 (prev. 7.1851)
• Brazilian Finance Minister Haddad said Brazil is far above the neutral interest rate; Brazil's budget is balanced and there is no time to change it, according to Reuters.

FIXED INCOME

• 10yr UST futures held onto a bulk of yesterday's gains which saw the curve bull steepen as dovish JOLTS bolstered the odds Fed is already at terminal, while eyes turn to PCE and NFP later in the week.
• Bund futures drifted from yesterday's highs but held onto most of the prior day’s gains.
• 10yr JGB yields were slightly firmer from the start and largely shrugged off the slide in the yields of its US counterpart.
• US sold USD 36bln in 7yr notes; stop-through 2bps. High Yield: 4.212% (prev. 4.087%, six-auction average 3.834%). WI: 4.232%. Tail: -2bps (prev. 1.3bps, six-auction avg. 0.6bps). Bid-to-Cover: 2.66x (prev. 2.48x, six-auction avg. 2.51x). Dealers: 9.8% (prev. 14.3%, six-auction avg. 12.8%). Directs: 15% (prev. 15.9%, six-auction avg. 18.8%). Indirects: 75.3% (prev. 69.8%, six-auction avg. 68.4%).
• Australia sells AUD 700mln 2.75% 2028 Bonds: b/c 3.25x (prev. 5.70x), average yield 3.8331% (prev. 3.5188%).

COMMODITIES

• Crude futures held an upward bias after the prior day’s sentiment-driven gains with the complex also supported by the much larger-than-expected draw in private crude inventories, while traders also focus on the situation in the Gulf of Mexico whereby Hurricane Idalia has been upgraded to a category 2 hurricane and is forecast to strengthen to category 4.
• US Energy Inventory Data (bbls): Crude -11.5mln (exp. -2.9mln), Gasoline +1.4mln (exp. -1.4mln), Distillate +2.5mln (exp. +0.1mln), Cushing -2.2mln.
• NHC said Idalia is expected to become a Category 4 hurricane before landfall in Florida.
• Spot gold was flat but held onto Tuesday’s JOLTS-led gains after topping its 50 DMA (USD 1,929/oz) in the prior session.
• Copper futures opened with an upward bias in China amid the broader global risk tone.
• Vale (VALE) executive said Chinese steel demand is declining less than some indicators suggest, according to Reuters.

CRYPTO

• Bitcoin prices retreated back under USD 27,500 after surging around USD 2,000 in the prior session.

NOTABLE ASIA-PAC HEADLINES

• BoJ Board Member Tamura said BoJ will take steps to curb an excessive rise in interest rates, such as increasing bond buying if BoJ sees speculative and sharp moves that deviate from fundamentals. BoJ Board Member Tamura said he personally feels that sustained and stable achievement of the 2% inflation target is in sight, and it is appropriate to keep easy policy now given uncertainty on hitting the price goal; does not expect 10yr JGB yield to rise to 1.0%. There is a good chance Japan's economic growth will exceed expectations, he said.
• China is reportedly exploring ways to make its own AI memory chips despite US sanctions, SCMP sources said; "China’s top DRAM maker, ChangXin Memory Technologies, is the country’s best hope for specialist chips, but it may take up to four years to deliver products".
• Country Garden (2007 HK) will raise HKD 270mln via new share issues at HKD 0.77 each, according to Reuters.
• Chinese regulators urge money brokers to ensure data security, according to Reuters.
• PBoC injected CNY 382bln via 7-day reverse repos with the maintained rate at 1.80% for a CNY 81bln net injection.

DATA RECAP

• Australian Weighted CPI YY (Jul) 4.9% vs. Exp. 5.2% (Prev. 5.4%)
• Australian Construction Work Done (Q2 2023) 0.4% vs. Exp. 0.8% (Prev. 1.8%)
• Australian Building Approvals (Jul 2023) -8.1% vs. Exp. -0.8% (Prev. -7.7%)
• Australian Private House Approvals (Jul 2023) 0.1% (Prev. -1.3%)

GEOPOLITICS

• Explosions were reported at Pskov Airport in western Russia, near the border with Estonia, according to BNO Newsroom.
• The Chinese Embassy in the US said China is working to ease market access further and treat foreign firms in the same manner as domestic firms, and added that China will only open its doors wider to the outside world. The embassy noted cyber security review on Micron (MU) is necessary for safeguarding national security, according to Reuters.

GLOBAL

• Goldman Sachs (GS) bought UK and US companies using Chinese state funds, according to FT.
• Senior Gabonese military officers appear on television and claim they have taken power and borders are closed until further notice; Gabon soldiers announce cancellation of elections, and the dissolution of institutions on TV, via AFP.