• US futures reside in the red but are faring better than European counterparts which have drifted since the open
• AAPL unreactive to incremental iPhone updates while Morgan Stanley believes the two-day stock sell-off is overdone
• DXY has slipped as yields lift but remains near 105.00 as the JPY wanes from best, Antipodeans outperform after recent pressure
• Core benchmarks underpinned on risk aversion ahead of Canadian jobs and a Fed speaker
• Nat Gas bid as Chevron Australia strikes commence while XAU benefits from the above to the detriment of base peers
• Looking ahead, highlights include Canadian Employment & Chinese Money Supply, Fed’s Barr

EUROPEAN TRADE

EQUITIES

• European bourses are in the red, Euro Stoxx 50 -0.9%, as sentiment has continued to deteriorate following the cash open and spurred on in part by incremental iPhone updates.
• Sectors are mostly softer, with Chemical names under pressure while Media names experience some slight outperformance.
• Stateside, futures have drifted in line with the above but magnitude more contained after recent pressure, ES -0.2%; NQ is in line with AAPL unreactive in the pre-market to the mentioned incremental reports.
• Click here for more detail.
• Click here and here for a recap of the main European equity updates.

FX

• DXY slips in tandem with US Treasury yields, but the Dollar remains underpinned as Yen wanes from overnight highs and Yuan continues to depreciate.
• Index off worst levels within 104.750-105.050 range and back towards the 105.00 mark, USD/JPY back above 147.00, USD/CNY pivoting 7.3400 and USD/CNH around 7.3500.
• Kiwi takes advantage of Greenback lapse to probe 0.5900, but Aussie lags after brief breach of 0.6400.
• Euro drawn to more hefty option expiries at 1.0700 vs Buck, Loonie flits between 1.3650-1.3700 awaiting Canadian jobs data.
• PBoC set USD/CNY mid-point at 7.2150 vs exp. 7.3284 (prev. 7.1986).
• NBP Kotecki says 75bps rate cut is interpreted as being part of the election campaign; says "silence fell" at MPC meeting when the proposal of 75bps rate cut came. Rate cut was risky.
• Click here for more detail.
• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Bonds run out of gas after extending upside parameters to 131.47, 94.95 and 110-10+ for Bunds, Gilts and the T-note respectively.
• Broad risk aversion likely to underpin debt given a lack of scheduled events, aside from Canadian jobs data that could impact if well outside of consensus.
• UK DMO is seeking market feedback on a potential tender for a Gilt with a maturity in excess of 40 years, to occur on September 27th.
• Click here for more detail.

COMMODITIES

• Thus far, fundamentals have been limited for the crude complex with the broader macro narrative digesting the latest data/speaker updates ahead of announcements from key Central Banks in the next few weeks, in addition to US-China tensions via Apple’s iPhone.
• WTI and Brent have spent the morning posting downside of circa. USD 0.30/bbl but have since picked up slightly into the green, with the benchmarks on track to retain around half of the week’s pronounced output-driven upside
• Similarly, newsflow for the gas space has been limited but the updates pertinent as strike action commences and a marked bullish move is seen; Dutch TTF Oct'23 firmer by over 10% as the strike commences.
• Finally, metals are diverging slightly as gold benefits from the tone and incremental USD softness but remains between the 200- & 10-DMAs while base metals succumb to sentiment.
• Australia union confirmed planned strikes by Chevron (CVX) Australia LNG workers from 13:00 local time on Friday and said Chevron is demanding to be given special concessions in bargaining which the union rejected.
• The UK has failed to clear any offshore wind in the latest round of renewable energy auctions.
• Click here for more detail.

NOTABLE US HEADLINES

• Fed's Goolsbee (voter) said it is possible to get on the 'golden path' and that monetary policy is working, while he added that overall inflation is above where they want it and there are risks. Goolsbee also stated that they are very rapidly approaching the time when the argument is not about how high should rates go, but rather how long rates have to stay high and collectively, the Fed forecast is that rates will have to stay up for a relatively extended period, according to a Marketplace interview.
• Fed's Logan (voter) said it could be appropriate to skip an interest rate increase in September and skipping does not imply stopping rate hikes, while she noted that there is work left to do to get to sufficiently restrictive policy and is not yet convinced that they have extinguished excess inflation.
• Fed's Bostic (non-voter) said there is still work to do to get inflation back to 2%, while he added the US economy is still working through pandemic dynamics and consumer strength has kept economic pain at bay.
• China expands Apple's (AAPL) iPhone ban to local government and state-owned firms, via Nikkei; "including prefectures and cities and state-owned enterprises since around August this year". Subsequently, Chinese state employees have been informed in recent weeks to stop using Apple (AAPL) phones, according to the FT.
• China's Foreign Ministry, on the Apple (AAPL) iPhone ban at state institutions, says the products/services of all are welcome, as long as they comply with laws and regulations.
• Morgan Stanley says China's widening curbs on Apple (AAPL) iPhones will at most impact Apple's revenue by 4%; believes the two-day stock sell-off on China widening iPhone curbs is overdone.

NOTABLE EUROPEAN HEADLINES

• Germany's DIW Institute lowers its 2023 GDP growth forecast to -0.4% from -0.2% previously.
• Citi cuts its 2023 EZ GDP Growth forecast to 0.4% (prev. 0.8%)

NOTABLE EUROPEAN DATA

• German CPI Final YY (Aug 2023) 6.1% vs. Exp. 6.1% (Prev. 6.1%); MM (Aug 2023) 0.3% vs. Exp. 0.3% (Prev. 0.3%)
• German HICP Final YY (Aug 2023) 6.4% vs. Exp. 6.4% (Prev. 6.4%); MM (Aug 2023) 0.4% vs. Exp. 0.4% (Prev. 0.4%)

GEOPOLITICS

• Russia's embassy in the US said Washington is meddling in Russia's internal affairs by calling elections in occupied areas of Ukraine illegitimate, according to RIA.
• US State Department said Secretary of State Blinken and Romanian Foreign Minister Odobescu discussed Romania's investigation of drone debris found in Romania, close to the border with Ukraine.
• UK is to urge India to 'call out' Russia over the war in Ukraine, according to FT.
• North Korea said leader Kim inspected a new strategic nuclear attack submarine, while Kim said they will accelerate the push to build nuclear-powered submarines, according to NHK and Yonhap.
• South Korea's military said North Korea's new submarine doesn't appear poised to operate normally and noted some external features appear to be scaled up to carry missiles, while the Unification Ministry condemned North Korea's launch of a nuclear-armed submarine and said Pyongyang's action is hurting its citizens' lives.

CRYPTO

• Bitcoin is well within recent parameters after multiple sessions of near-unchanged closes despite marginally more pronounced intra-day action. Currently, BTC is just below the USD 26k mark with downside of circa. 1.5%

APAC TRADE

• APAC stocks declined amid US-China tech-related frictions and disappointing Japanese GDP revisions.
• ASX 200 was led lower by continued underperformance in the commodity-related sectors and with strike action beginning in some offshore LNG platforms, although losses in the index were stemmed by resilience in defensives.
• Nikkei 225 fell below 33,000 with risk appetite sapped by disappointing GDP revisions and slower wage growth.
• Hang Seng was shut due to severe rainfall and Shanghai Comp traded subdued amid tech frictions as China seeks to expand its iPhone ban and with the US Commerce Department investigating the ‘made in China’ Huawei chip.

NOTABLE ASIA-PAC HEADLINES

• Chinese Premier Li said in a meeting with UN Secretary-General Guterres that it is necessary to uphold the concept of open and inclusive development, as well as jointly resist the practice of securitising and politicising economic issues.
• Japanese PM Kishida is expected to reshuffle the Cabinet as early as next Wednesday and Chief Cabinet Secretary Matsuno is expected to stay on or take another key post, according to Nikkei; subsequently echoed by NHK.

DATA RECAP

• Japanese GDP Revised QQ (Q2) 1.2% vs. Exp. 1.3% (Prev. 1.5%); Revised Annualised (Q2) 4.8% vs. Exp. 5.5% (Prev. 6.0%)
• Japanese Overall Labour Cash Earnings (Jul) 1.3% (Prev. 2.3%)