• European bourses are generally contained pre-ECB, though the FTSE 100 sees marked outperformance
• Stateside, futures fare slightly better than mainland European peers ahead of numerous US data points
• DXY back to a 104.80 peak, AUD underpinned post-jobs with EUR & GBP rangebound
• Debt futures experience modest divergence going into the ECB where a hike is priced with around 65% probability
• Crude benchmarks continue to benefit from the energy reports while metals are mixed
• Looking ahead, highlights include US IJC, PPI, NZ Manufacturing PMI, ECB Policy Announcement & ECB President Lagarde's Press Conference, Supply from US.

EUROPEAN TRADE

EQUITIES

• European bourses are contained with an incremental positive bias emerging after a relatively mixed open, Euro Stoxx 50 +0.1%
• Newsflow has been limited ahead of the ECB with action primarily a continuation of the marginally firmer APAC session after initial Wall St. indecision.
• Sectors remain mixed with outperformance in Basic Resources after broker action for Rio Tinto and Anglo American, Energy benefits from benchmark action while Autos lag given pressure in BMW following a Barclays downgrade.
• The strong action in Mining and Energy names is leading to outperformance in the FTSE 100 +0.7%, with support also coming via a bounceback in BP.
• Stateside, futures are faring a touch better than European peers, ES +0.3%, in post-CPI trade as we look towards numerous key data points incl. Retail Sales, IJC and PPI.
• Click here for more detail.

FX

• Aussie underpinned by a hot headline and higher labour participation rate on 0.6400 handle vs. Buck.
• DXY regains poise after post-US CPI flip-flop within a 104.550-80 range.
• Euro elevated above 1.0700 against the Dollar awaiting a twist or stick ECB rate call.
• Loonie firm vs. Greenback between 1.3555-25 bounds and supported by WTI ahead of Canadian wholesale trade.
• Sterling lags after slump in RICS UK house price balance, with Cable sub-1.2500 and leaning on circa 1bln option expiries at 1.2475.
• PBoC set USD/CNY mid-point at 7.1874 vs. exp. 7.2784 (prev. 7.1894).
• PBoC asked some banks to hold off on immediate dollar purchases in the interbank market to square FX positions with banks told to hold such open FX positions until net exposure hits a certain level, according to Reuters sources.
• Turkey introduced 25% required reserves for FX-protected Lira deposits with maturities of up to 6 months, according to the Official Gazette.
• Click here for more detail.
• RBA watcher McCrann, following the Australian jobs data, says "Likely no more rate hikes but don’t hold your breath for cuts", via the Herald Sun.
• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Debt futures narrowly divergent ahead of ECB and more tier one US data.
• Bunds and Gilts back above par between 130.84-41 and 95.75-37 respective bounds.
• T-note marginally softer within 110-05+/109-29 confines.
• Click here for more detail.

COMMODITIES

• WTI Oct and Brent Nov futures remain firm in European trade with sentiment underpinned by this week’s trio of oil market reports which all ultimately flagged a tighter market in Q4.
• Dutch TTF is currently modestly softer intraday after rallying some 6% yesterday. Desks cite another extension to the Norwegian Troll field maintenance. Furthermore, Chevron’s Australian LNG operations are under threat of an escalation in strikes.
• Spot gold treads water just above USD 1,900/oz but around yesterday's lows, with price action contained ahead of upcoming risk events, with the next notable level to the downside under 1,900/oz being the August low at USD 1,884.89/oz.
• Base metals are mixed/mostly firmer following the constructive tone from the APAC region and the softer Dollar, although price action is contained by the looming risk events
• Australian union official noted a significant escalation in industrial action at Chevron's (CVX) Australian LNG facilities on Thursday and said the decision on whether to strike for the full 24 hours is being taken on a case-by-case basis across the 3 facilities involved, according to Reuters.
• Chevron (CVX) says a fault has impacted 25% of LNG production at Australia's Wheatstone plant, according to a spokesperson; the cause has been identified and restart activities have commenced, domestic gas facility unaffected. Subsequently, Australia's Offshore Alliance Union 1411 turbine on the Wheatstone downstream facility and one of the trains is now down to 50% capacity.
• Cochilco says average silver price to reach USD 24.60/oz this year, supply will go 1.8%; global silver demand to fall 9.4% in 2023; market will maintain a deficit.
• Click here for more detail.

NOTABLE US HEADLINES

• US President Biden said Republicans want to impeach him because they want to shut down the government. In relevant news, GOP Senator Thune said a stopgap spending bill will be needed to avoid a government shutdown, according to Reuters.
• US President Biden is to address budget cuts and government shutdown in Thursday's speech at 19:45BST/14:45ET, according to a White House Statement.
• UAW President said they will not allow the negotiations to drag out for months and that all three wage offers from the Detroit 3 automakers are inadequate, while the UAW rejected profit-sharing proposals. Furthermore, the sides are still very far apart on key priorities and they are preparing to strike, while UAW plans to initially strike at a limited number of facilities and would announce more plants as bargaining continues if no deal is reached, as well as noted that an all-out strike is still a possibility.
• Click here for the US Early Morning Note.

NOTABLE EUROPEAN HEADLINES

• French Energy Watchdog CRE says the next theoretical calculation of electricity tariffs should lead to a ~10% increase at the beginning of 2024.
• Norges Bank Regional Network Survey: Regional network: Prospects for weak growth; In the period to winter, contacts expect growth to slow. Click here for more detail & analysis.
• Germany VCI Chemical Industry Association says Q2 production fell 8% Y/Y (-14% Y/Y ex-pharma).

NOTABLE EUROPEAN DATA

• UK RICS Housing Survey (Aug) -68.0 vs. Exp. -56.0 (Prev. -53.0)
• Swedish CPIF YY (Aug 2023) 4.7% vs. Exp. 4.9% (Prev. 6.4%); MM (Aug 2023) -0.1% vs. Exp. 0.1% (Prev. -0.2%)
• Swedish CPIF Ex Energy YY (Aug) 7.2% vs. Exp. 7.40% (Prev. 8.00%); Ex Energy MM (Aug) -0.3% vs. Exp. -0.10% (Prev. 0.40%)

GEOPOLITICS

• North Korean leader Kim said the meeting with Russian President Putin brought bilateral ties to a new level, while they agreed to further strengthen strategic and tactical cooperation and to step up cooperation to fight imperialists' military threats, provocations and tyranny, while Kim was briefed on technical details about Russian space vehicles and invited Putin to visit North Korea which Putin accepted, according to KCNA.
• Taiwan's Defence Ministry says 13 Chinese military aircraft entered Taiwan's air defence zone on Thursday.

CRYPTO

• Bitcoin is incrementally firmer and continues to hold above the USD 26k mark with specifics sparse and overall action limited ahead of a packed agenda.

APAC TRADE

• APAC stocks were predominantly firmer and mostly shrugged off the indecision seen on Wall St in the aftermath of a somewhat hawkish-leaning US inflation report
• ASX 200 was marginally higher amid strength in the commodity-related and financial sectors, while the latest employment data provided encouragement but was predominantly fuelled by an increase in part-time jobs.
• Nikkei 225 outperformed and rose back above the 33,000 level amid anticipation of incoming stimulus and with the index unfazed by disappointing machinery tool orders.
• Hang Seng and Shanghai Comp were choppy after a substantial liquidity drain by the PBoC and with strength in energy and power names offset by the pressure on EV makers after reports the European Commission is to begin an anti-subsidy investigation into Chinese EVs.

NOTABLE ASIA-PAC HEADLINES

• China Passenger and Car Association head said China's EV industrial chain is highly competitive and urges the EU to take an objective view of the industry's development, while he added that China's strong EV exports are not the outcome of heavy state subsidies.
• Japan's new economy minister Shindo said they will mobilise all possible policy measures to support the economy and will consider bold measures to ease the pain of price hikes, according to Reuters.
• Chinese Commerce Ministry says the EU's move to probe Chinese EV imports has a negative impact on China-EU economic trade and relations; China is to pay close attention to EU measures on EVs.

DATA RECAP

• Japanese Machinery Orders MM (Jul) -1.1% vs. Exp. -0.9% (Prev. 2.7%); YY (Jul) -13.0% vs. Exp. -10.7% (Prev. -5.8%)
• Australian Unemployment Rate (Aug) 3.7% vs. Exp. 3.7% (Prev. 3.7%); Employment (Aug) 64.9k vs. Exp. 23.0k (Prev. -14.6k)
• Australian Participation Rate (Aug) 67.0% vs. Exp. 66.7% (Prev. 66.7%); Full-Time Employment (Aug) 2.8k (Prev. -24.2k)