• APAC stocks traded mostly higher led by strength in China’s property sector amid gains in Country Garden Holdings.
• Country Garden Holdings surging by a double-digit percentage after it made a payment on a ringgit-denominated bond and won approval to extend its onshore private bond maturity by three years.
• European equity futures are indicative of a higher open with Euro Stoxx 50 futures +0.3% after the cash market closed down 0.3% on Friday.
• DXY is contained above the 104 mark, EUR/USD is sub 1.08, USD/JPY and Cable rest above 146 and 1.26 respectively.
• Highlights include German Trade Balance, EZ Sentix Index, ECB’s Lagarde, Elderson, Lane & Panetta, Holiday Closure in the US & Canada for Labor Day.
• The desk will open as usual at 22:00BST/17:00EDT on Sunday 3rd September and run until 18:00BST/13:00EDT on Monday 4th September, upon which the desk will close and then re-open at 22:00BST/17:00EDT the same day due to US market closures

US TRADE

EQUITIES

• US stocks finished predominantly higher on Friday with notable outperformance in the cyclical Russell 2000 which was supported by the upside in regional banks, while the gains in the major indices were limited as participants digested the jobs data in which the headline Non-farm Payrolls topped estimates but the unemployment rate shot up to 3.8% from 3.5% and wages cooled to confirm the recent signs of a slowing labour market.
• SPX +0.18% at 4,516, NDX -0.07% at 15,491, DJI +0.34% at 34,838, RUT +1.11% at 1,921.
• Click here for a detailed summary.

NOTABLE HEADLINES

APAC TRADE

EQUITIES

• APAC stocks traded mostly higher led by strength in China’s property sector although the upside was capped for some of the regional bourses amid a thinned start to the week for global markets owing to the US Labor Day holiday.
• ASX 200 was positive with the resources sector underpinned after Albemarle sweetened its offer for Liontown Resources although further advances in the index were limited by soft data and ahead of tomorrow’s RBA meeting.
• Nikkei 225 gained as automakers were boosted by higher US sales updates and with Japan’s government to set aside around JPY 20bln to support fishery businesses following China’s import ban on Japanese marine products.
• Hang Seng and Shanghai Comp were the biggest gainers amid optimism in the property sector after recent reports of measures to support the industry and with shares in developer Country Garden Holdings surging by a double-digit percentage after it made a payment on a ringgit-denominated bond and won approval to extend its onshore private bond maturity by three years, while President Xi had also pledged to widen market access for the service industry and promote cross-border service trade.
• US equity futures were uneventful and lacked direction after the post-NFP whipsawing.
• European equity futures are indicative of a higher open with Euro Stoxx 50 futures +0.3% after the cash market closed down 0.3% on Friday.

FX

• DXY was rangebound after last Friday's momentum waned and with US participants away for Labor Day.
• EUR/USD found some slight respite after the recent slump beneath the 1.0800 handle.
• GBP/USD attempted to nurse some of its losses but struggled with resistance at the 1.2600 level, while there were recent comments from UK Chancellor Hunt that inflation is on track to halve by year-end.
• USD/JPY traded sideways and held onto the 146.00 status in the absence of any tier-1 data releases
• Antipodeans mildly benefitted from the positive risk tone, China developer optimism and firmer CNY fixing.
• PBoC set USD/CNY mid-point at 7.1786 vs exp. 7.2795 (prev. 7.1788)

FIXED INCOME

• 10yr UST futures languished at post-NFP lows after bear steepening on Friday in the wake of hotter-than-expected ISM manufacturing and mixed jobs data, with demand also not helped by the closure of US markets on Monday.
• Bund futures marginally extended on recent declines further beneath the 132.00 level.
• 10yr JGB futures were subdued amid spillover selling from global peers and despite the BoJ’s presence in the market for nearly JPY 1.2tln of JGBs on top of its fixed-rate operations.

COMMODITIES

• Crude futures were uneventful but held on to recent spoils after climbing to the highest in seven months.
• UAE’s Adnoc set October Murban crude OSP at USD 87.28/bbl which is an increase from the September OSP of USD 80.78/bbl, according to Reuters.
• Australia’s Offshore Alliance and Legeneering reached an agreement on decommissioning rates for Thevenard offshore decommissioning work scopes which will see members lock in a 20 dollars per hour uplift in the rates previously offered, while Legeneering agreed to align all offshore maintenance rates and conditions with the union-negotiated EBA for Woodside (WDS AT) FPSO’s.
• Spot gold eked marginal gains as the greenback took a breather following last Friday's advances.
• Copper futures were kept afloat amid the property sector optimism in its largest purchaser China.

CRYPTO

• Bitcoin remains rangebound after a flat performance over the weekend and eyes the USD 26,000 level.

NOTABLE ASIA-PAC HEADLINES

• Chinese President Xi said China will widen market access for the service industry and promote cross-border service trade. Xi also stated that they will promote the integrated development of high-end manufacturing and modern service industries, as well as focus on expanding the domestic market and proactively expanding the import of high-quality services, according to Reuters.
• China state planner vice chairman said the central government approved setting up a special bureau within the NDRC for the development of the private economy, while it was separately reported that China's MIIT is to conduct inspections on reducing business burdens.
• US President Biden said he is disappointed that Chinese President Xi is not attending the G20, according to Reuters.
• Italy’s Foreign Minister said the Belt and Road Initiative deal with China did not bring the results that they had expected, according to Reuters.
• Japan’s government is to set aside around JPY 20bln to support fishery businesses following China’s import ban on Japanese marine products, according to Kyodo.

DATA RECAP

• Australian Business Inventories (Q2) -1.9% vs. Exp. 0.4% (Prev. 1.2%)
• Australian Gross Company Profits (Q2) -13.1% vs. Exp. -1.9% (Prev. 0.5%)
• Australian Melbourne Institute Inflation Gauge MM (Aug) 0.2% (Prev. 0.8%)
• Australian Melbourne Institute Inflation Gauge YY (Aug) 6.1% (Prev. 5.4%)
• New Zealand Terms of Trade QQ (Q2) 0.4% vs. Exp. -1.3% (Prev. -1.5%)
• New Zealand Export Volumes (Q2) 6.8% vs. Exp. 6.0% (Prev. 1.0%)
• New Zealand Export Prices (Q2) -0.6% vs. Exp. -2.1% (Prev. -6.9%)
• New Zealand Import Prices (Q2) -1.0% vs. Exp. -1.4% (Prev. -5.4%)

GEOPOLITICS

• Ukrainian President Zelensky said he will propose to dismiss Defence Minister Oleksii Reznikov this week and replace him with Rustem Umerov who is the chief of Ukraine’s main privatisation fund. Furthermore, Zelensky said he held talks with French President Macron and struck a deal on training Ukrainian pilots in France, according to Reuters.
• Russia launched drone strikes on Ukraine’s Odesa port region on Sunday ahead of talks on Monday between Turkish President Erdogan and Russian President Putin on restarting grain exports through the Black Sea, according to FT.
• Russian Defence Ministry said it shot down Ukrainian drones over Russia's Kursk region and destroyed four high-speed boats with Ukrainian forces in the Black Sea, according to Reuters.
• Traffic on the Crimean Bridge connecting Russia with the Crimean Peninsula was temporarily suspended on Sunday but has since resumed, while the reason for the suspension was not disclosed, according to Reuters.
• US is to send its first depleted uranium rounds to Ukraine, according to sources cited by Reuters pm Friday.
• South African President Ramaphosa said an inquiry found no evidence to support US claims that a Russian cargo ship transported weapons from South Africa destined for Russia, while he added that no permit was issued for the export of arms and no arms were exported, according to Reuters and FT.
• Chinese gate-crashers at US bases reportedly spark espionage concerns and Washington has tracked about 100 incidents involving Chinese nationals trying to access American military and other installations, according to WSJ.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Hunt said inflation is on track to halve by year-end and pressure on household budgets will ease as inflation cools, according to Reuters.
• EU’s Gentiloni said he was confident an agreement over re-implementing EU budget rules would be reached by year-end and the suspension of the EU Stability and Growth Pact won’t be extended into 2024, according to Reuters.
• German Finance Minister Lindner said in an interview with broadcaster ARD that there won’t be another special budget in Germany during the current legislative term.
• Italy’s Economy Minister Giorgetti confirmed the 2024 GDP growth target of 1% and said the government supports debt reduction policy, while he added that the windfall tax on banks can be improved, according to Reuters.