• European bourses & US futures are under pressure, though the latter comparably more contained pre-data/Fed speak
• DXY dips but retains an underlying bid while JPY outperforms after jawboning, CAD soft pre-BoC as crude pullsback
• A session of consolidation for crude after Tuesday’s pronounced upside, metals feature spot gold near unchanged while base peers have lifted from lows in-line with China
• EGBs pressured by hawk-Knot after fleeting data-induced upside, USTs more contained
• Looking ahead, highlights include US ISM Services, NBP & BoC Policy Announcements, Fed’s Collins & Logan, BoE's Bailey, Cunliffe & Dhingra, Riksbank’s Thedeen.

EUROPEAN TRADE

EQUITIES

• European bourses are in the red, Euro Stoxx 50 -0.5%, in a similar fashion to the subdued APAC handover though performance for both regions lifted off lows towards the China close.
• Pressure in Europe also emanated from soft German data, though this comes with mitigating factors, and hawkish commentary from ECB's Knot.
• Sectors are similarly lower aside from Telecom, where support stems from reports that Saudi's STC has amassed a near-10% stake in Telefonica.
• Stateside, futures are also under pressure, ES -0.3%, but to a slightly lesser extent than the above action as the region is more tentative ahead of key US data and Central Bank speak.
• Apple (AAPL) iPhone and other foreign-branded devices have been banned in China for use by government officials at work, according to WSJ sources.
• Click here for more detail.
• Click here and here for a recap of the main European equity updates.

FX

• DXY dips, but retains a firm underlying bid within 104.590-870 range irrespective of intervention.
• Yen pares losses vs. Buck after Japanese jawboning, but USD/JPY fails to breach 147.00 having peaked around 147.81.
• Euro underpinned against Buck as EGB/UST spreads converge, but EUR/USD capped ahead of 1.0750 and top of 2.53 bn expiry band starting at 1.0740.
• Aussie elevated near 0.6400 vs Greenback as Yuan rebounds from overnight lows sub-7.3200 in response to onshore and offshore intervention.
• Loonie lags pre-BoC as oil comes off the boil and Usd/Cad straddles 1.3650.
• PBoC set USD/CNY mid-point at 7.1969 vs exp. 7.3097 (prev. 7.1783)
• China's major state-owned banks were seen withdrawing yuan liquidity in the offshore FX market and were seen selling dollars in the onshore spot FX market, according to sources cited by Reuters.
• Click here for more detail.
• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Bonds off worst levels in Europe before solid UK and German auctions, but Bunds and Gilts remain below par between 130.48-131.16 and 93.36-70 respective parameters.
• T-note idling within tight 110-05/109-29 band awaiting US trade data, services ISM, Fed speakers and latest Beige Book.
• Click here for more detail.

COMMODITIES

• A session of consolidation for crude after Tuesday’s Russia and Saudi induced gains; WTI Oct’23 and Brent Nov’23 are lower by around USD 0.70/bbl having slipped through and tested the USD 86.00/bbl and USD 89.00/bbl figures respectively.
• Gas markets are attentive to the commencement of Australian LNG strikes on Thursday.
• While metals feature near unchanged performance for spot gold, base metals are softer but in a similar fashion to Chinese bourses that have lifted off lows.
• US Congress is set to sell off a 1mln bbl emergency reserve of gasoline which was created in the aftermath of Hurricane Sandy amid questions about the reserve's usefulness, according to Bloomberg.
• Russian President Putin spoke by phone to Saudi Crown Prince MBS, according to Ria; both praised high-level of OPEC+ coordination.
• Click here for more detail.

NOTABLE US HEADLINES

• US Senate voted 83-10 in cloture vote to limit the debate and advance Fed Vice Chair nominee Jefferson toward confirmation, according to Reuters.
• European Commission has designated 22 core businesses of six firms as gatekeepers. Firms are: Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Bytedance, Meta (META) and Microsoft (MSFT)

NOTABLE EUROPEAN HEADLINES

• ECB's Knot says markets may underestimate a September hike, via Bloomberg; the September decision will be a close call. A further hike is only a possibility and not a certainty. Advises caution against pessimism on the blocs economy. ECB inflation outlook won't differ much from the last quarter.
• German Chancellor Scholz says to the Bundestag that he wants to propose a German pact to make the nation more fast, modern and secure. Will continue to promote the establishment of innovative firms such as chip factories. Rules out a debt-financed stimulus programme for Germany.
• Germany's IFW sees 2023 German GDP -0.5% vs. prev. view of -0.3%, 2024 at +1.3% vs. prev. view +1.8% and 2025 at +1.5%.

NOTABLE EUROPEAN DATA

• German Industrial Orders MM (Jul 2023) -11.7% vs. Exp. -4.0% (Prev. 7.0%, Rev. 7.6%); "Much of the sharp decline in new orders in July 2023 is due to a very large order reported in the manufacture of air and spacecraft in June 2023". New orders excluding large-scale orders were up 0.3% MM.
• EU HCOB Construction PMI (Aug) 43.4 (Prev. 43.5); German HCOB Construction PMI (Aug) 41.5 (Prev. 41.0)
• French HCOB Construction PMI (Aug) 42.4 (Prev. 42.9); Italian HCOB Construction PMI (Aug) 47.7 (Prev. 48.0)
• UK S&P Global/CIPS Construction PMI (Aug) 50.8 vs. Exp. 50.5 (Prev. 51.7)
• EU Retail Sales MM (Jul 2023) -0.2% vs. Exp. -0.1% (Prev. -0.3%); YY (Jul 2023) -1.0% vs. Exp. -1.2% (Prev. -1.4%)

GEOPOLITICS

• India's Foreign Minister said he doesn't think the absence of Russian President Putin and Chinese President Xi from G20 has anything to do with India. Furthermore, he stated that G20 countries are negotiating to arrive at a consensus and have a declaration but added that there is a very sharp North-South divide and a sharper East-West polarisation.

CRYPTO

• Coinbase (COIN) is launching a digital asset lending program for its institutional prime clients.

APAC TRADE

• APAC stocks traded mostly in the red following the subdued handover from Wall Street where sentiment was clouded by the higher yield environment, a stronger dollar and rising oil prices.
• ASX 200 was dragged lower by tech and with most sectors pressured aside from energy which benefitted from the higher oil prices, while better-than-expected GDP data for Australia failed to inspire a turnaround.
• Nikkei 225 bucked the trend after it reclaimed the 33,000 status and with tailwinds from a weaker currency.
• Hang Seng and Shanghai Comp suffered from tech weakness but losses stemmed as developers surged on hopes of further support measures and with Sunac up by over 60% after its return to the Stock Connect; additionally, further support came via China's Premier Li and reports of a Hong Kong Financial task force meeting.

NOTABLE ASIA-PAC HEADLINES

• China's Premier Li says they expect to achieve around the 5% economic growth target which was set earlier in the year.
• Chinese diplomat Liu said the US and China are major trading partners and that China opposes decoupling.
• US Commerce Secretary Raimondo said she does not expect any changes to Trump-era tariffs on China until the ongoing USTR review is completed, according to a CNBC interview.
• BoJ Board Member Takata said Japan's economy is recovering moderately and Japan is seeing early signs of achieving 2% inflation, while he added that there is a sign of change in Japan's trend inflation as rising wages push up inflation expectations. However, he believes the BoJ must patiently maintain easy policy given very high uncertainty on the outlook and noted that inflation is already exceeding the BoJ's 2% target but there is some distance to achieving it stably and in a sustainable fashion.
• Japan Chief Cabinet Secretary Matsuno says it is important for FX to move stably reflecting fundamentals, sharp FX movers are undesirable. Will respond appropriately to FX moves if necessary, without ruling out any option.

DATA RECAP

• Australian Real GDP QQ (Q2) 0.4% vs. Exp. 0.3% (Prev. 0.2%); YY (Q2) 2.1% vs. Exp. 1.8% (Prev. 2.3%)