• Equity bourses/futures are incrementally firmer but the overall tone remains tentative ahead of key US data
• USD bounces from overnight lows but remains softer overall with peers generally contained; Yuan underpinned by PBoC action and data
• Energy benchmarks are firmer owing to the USD and Chevron/LNG updates, base metals glean support from Chinese stimulus
• Fixed benchmarks consolidate after month-end action and await data drivers
• Looking ahead, highlights include US Manufacturing PMI Final, US Jobs Report, Canadian GDP, US ISM Manufacturing, speeches from Fed’s Mester

EUROPEAN TRADE

EQUITIES

• European bourses are in the green, Euro Stoxx 50 +0.3%, as modest upside creeps in following a tentative/slightly subdued open with fundamentals light ahead of key US data.
• Sectors are primarily positive, Energy the clear outperformer after an MS upgrade and broader benchmark action while Autos lag following a negative Volkswagen broker move and as Tesla cuts prices in China for some models.
• Stateside, futures are in-fitting with Europe and are slightly firmer, ES +0.2%. with the tone equally as tentative before NFP & ISM Manufacturing.
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• Click here and here for a recap of the main European equity updates.

FX

• Buck bounces from overnight lows, but is contained overall ahead of US payrolls, DXY sits within 103.480-770 range.
• Franc a tad firmer in line with Swiss YY CPI vs consensus, USD/CHF towards base of 0.8813-46 parameters.
• Euro, Pound, Yen and Loonie all rangy pre-NFP and Canadian GDP, EUR/USD around 1.0850 and surrounded by hefty expiries, Cable hovering below 1.2700, USD/JPY pivoting 145.00 and USD/CAD straddling 1.3500.
• Yuan underpinned by multiple factors including 200 bp RRR cut and surprise upgrade to Caixin Chinese manufacturing PMI to growth from contraction, USD/CNY close to 7.2450 and USD/CNH sub-7.2400 at one stage.
• PBoC set USD/CNY mid-point at 7.1788 vs exp. 7.2967 (prev. 7.1811)
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FIXED INCOME

• Debt succumbs to some consolidation as the turn of the month comes with key US macro releases via NFP and the manufacturing ISM.
• Bunds, Gilts and T-note all in negative territory after Thursday's rallies and within 133.13-132.76, 95.49-14 and 110-31+/27 respective ranges.
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COMMODITIES

• Crude benchmarks are in the green but only modestly so and taking impetus from the USD rather than any specific crude driver with the overall tone tentative pre-NFP.
• Dutch TTF has pared back to near the unchanged mark after initial gains as Chevron workers rejected the first mediation package ahead of potential strikes on September 7th.
• Spot gold is at the top-end of parameters but as above this is relatively modest with specifics light while base metals have returned firmly to the green as China unveils further stimulus.
• Crude futures were on a slightly firmer footing and extended on the prior session’s gains, with Brent testing 87/bbl to the upside as it takes aim at the August high of USD 87.37/bbl.
• Spot gold saw an uptick as the DXY pulled back but price action remains within yesterday’s range and under USD 1,950/oz ahead of NFPs.
• Copper futures were lifted on the aforementioned China announcement, with 3M LME copper briefly topping USD 8,500/t to the upside.
• Chevron's (CVX) Australia LNG workers reject the Co's bargaining offer, according to unions; less than 1% of the Wheatstone and Gorgon downstream workforce voted in support of the offer, according to Reuters. Subsequently, sources report that CVX and unions will meet for talks next week.
• Russia introduced a 7% export duty on a number of fertilisers from September 1st, according to Interfax.
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NOTABLE US HEADLINES

• Broadcom (AVGO) Q3 2023 (USD): Adj. EPS 10.54 (exp. 10.43), Revenue 8.88bln (exp. 8.87bln)Shares fell 4.6%
• Dell Technologies Inc (DELL) Q2 2023 (USD): Adj. EPS 1.74 (exp. 1.14), Revenue 22.9bln (exp. 20.85bln). Shares rose 8.3%
• UPS (UPS) confirmed the offer to some pilots. Co. is seeking to reduce pilots amid a drop in air freight volume and is offering voluntary separation for "eligible" pilots, according to Reuters.
• Click here for the US Early Morning Note.

NOTABLE EUROPEAN HEADLINES

• ECB's de Guindos said the latest data from July and August point towards economic deceleration in Q3 and probably in Q4, and the ECB needs to keep working to bring inflation back to the 2% target. He said the latest data from inflation in August has been very similar to July, and the rate decision in September is still up for debate. He said data in the next few days is key to the September ECB decision, according to Reuters.
• ECB's Villeroy says after overall inflation peaked and underlying inflation has also peaked since April and appears to have begun its decline. This encouraging sign is still far from sufficient. Options are open at the next and upcoming meetings. Very close to a peak in rates, far from the point where we could consider cuts. Keeping rates high for long enough matters more than the level. Will slightly revise up France's 2023 GDP forecast.
• ECB's Vujcic says inflation data in August was in-line with expectations, economic activity is slowing faster than forecast. Will not know in September, October or November where the terminal is. Inflation will ease in the coming months but there is a risk that disinflation will stall above the target.
• BoE's Pill says BoE needs to be particularly wary about letting an inflation persistence dynamic to set in; we have not yet seen a downturn in core inflation which would reassure us.

NOTABLE EUROPEAN DATA

• Swiss CPI YY (Aug 2023) 1.6% vs. Exp. 1.5% (Prev. 1.6%); MM 0.2% vs. Exp. 0.2% (Prev. -0.1%)
• UK Nationwide House Price (Aug): -5.3% YY (prev. -3.8%); -0.8% MM (prev. -0.3%)
• EU HCOB Manufacturing Final PMI (Aug) 43.5 vs. Exp. 43.7 (Prev. 43.7); German HCOB Manufacturing PMI (Aug) 39.1 vs. Exp. 39.1 (Prev. 39.1); French S&P Global Manufacturing PMI (Aug) 46.0 vs. Exp. 46.4 (Prev. 46.4)
• UK S&P Global/CIPS Manufacturing PMI FNL (Aug) 43.0 vs. Exp. 42.5 (Prev. 42.5)

GEOPOLITICS

• Japan imposed additional sanctions against North Korea, according to Reuters.

CRYPTO

• Bitcoin has settled down after marked pressure in the latter part of yesterday's/APAC session. However, BTC remains in proximity to the USD 25.9k low, holding just above the USD 26k mark throughout much of the European morning.

APAC TRADE

• APAC stocks traded mixed following a similar lead from Wall Street, whilst Hong Kong markets were closed due to Typhoon Saola.
• ASX 200 declined further under 7,300 and was weighted by its metals names as Fortescue Metals slumped after its CFO left three days after the CEO's departure.
• Nikkei 225 opened in the red but quickly trimmed losses with the rebound spearheaded by the energy sector.
• KOSPI was underpinned by the South Korean trade data which printed better than feared.
• Shanghai Comp opened firmer after large Chinese banks cut their deposit rates, while the PBoC also lowered down payment for first and second-time home buyers and announced a cut to the FX RRR. Modest upticks were seen after the Caixin PMI Finals were surprisingly revised into expansion territory.

NOTABLE ASIA-PAC HEADLINES

• PBoC is to cut FX RRR by 2ppts to 4% (prev. 6%) from September 15th, according to the central bank. China's Global Times, on the PBoC FX RRR cut, said "This move aims to enhance the ability of financial institutions to utilize foreign exchange capital."
• Several major Chinese banks lowered their deposit rates, including ICBC, China Construction Bank, Bank of Communications, and Bank of China.
• China's Shenzhen City will suspend work, businesses, transportation, and markets from Friday afternoon amid Typhoon Saola, according to the Shenzhen Government.
• PBoC sold CNY 101bln via 7-day reverse repos with the rate at 1.80% for a CNY 120bln net injection.
• China to take additional action to revive the property sector, via Reuters citing sources; incl. relaxing home purchase curbs and removing caps on new homes.
• Softbank's (9984 JT) Arm Holdings is expected to set a price range for its IPO next week, with plans to price its shares on September 13th and trading to start the following day, according to Reuters sources.
• Japanese Finance Minister Suzuki said FX moves should be set by the market and should reflect fundamentals; sudden FX moves are undesirable, according to Reuters.

DATA RECAP

• Chinese Caixin Manufacturing PMI Final (Aug) 51.0 vs. Exp. 49.3 (Prev. 49.2).
• South Korean Trade Balance Prelim (Aug 2023) 0.87B vs. Exp. -0.4B (Prev. 1.65B)
• South Korean Import Growth Prelim (Aug 2023) -22.8% vs. Exp. -23.2% (Prev. -25.4%); Export Growth Prelim (Aug 2023) -8.4% vs. Exp. -11.6% (Prev. -16.4%)
• South Korean Manufacturing PMI (Aug) 48.9 (Prev. 49.4)
• Japanese Business Capex (MOF) YY (Q2 2023) 4.5% (Prev. 11.0%)
• Japanese Manufacturing PMI (Aug F) 49.6 (Prev. 49.7)
• New Zealand ANZ Consumer Confidence Index MM (Aug) 1.6% (Prev. -2.1%); Index (Aug) 85.0 (Prev. 83.7)