• European bourses & US futures are in the green but only modestly so as markets continue to count down to multiple Central Bank announcements
• USD remains pressured pre-FOMC but the index retains 105.00 with peers generally contained/modestly firmer
• EGBs and Gilts continue to regain some poise while USTs are contained and meandering either side of parity
• Crude benchmarks retain a positive bias but have slipped from best following the latest OECD forecasts
• UAW is to announce new strikes on Friday if progress is not made, potential for Canadian strikes at Ford facilities as well
• Looking ahead, highlights include Canadian CPI, ECB’s Elderson and supply from the US

EUROPEAN TRADE

EQUITIES

• European bourses are in the green, Euro Stoxx 50 +0.2%, though only modestly so with the space struggling to reclaim lost ground from Monday.
• Sectors are primarily in the green, with outperformance seen in Autos following a double-upgrade to Volkswagen while Retail lags in the red amid pressure in Kingfisher who cut FY guidance.
• Stateside, futures are in-fitting with European peers in posting a slight positive bias but generally struggling for direction as we await the Fed to kick off a blockbuster week of Central Bank activity; ES +0.2%.
• Click here for more detail.

FX

• Buck continues to buckle in the build-up to FOMC and a host of other Central Bank confabs, DXY edges closer to 105.000 within incrementally lower 105.210-010 range.
• Kiwi, Loonie and Aussie elevated amidst strength in underlying commodities, NZD/USD comfortably above 0.5900 pre-NZ current account data, AUD/USD probing 0.6450 post-hawkish RBA minutes and USD/CAD sub-200 DMA awaiting Canadian CPI.
• Sterling, Euro and Yen all hovering near big figures vs. Dollar, at 1.2400, 1.0700 and 148.00 respectively.
• PBoC set USD/CNY mid-point at 7.1733 vs exp. 7.2839 (prev. 7.1736)
• Click here for more detail.
• Click here for the Option Expires for the NY Cut.

FIXED INCOME

• Bonds bounce broadly, but not uniformly as the countdown to Central Bank-fest continues.
• Gilts outperform mainstream peers within 95.46-94.94 range pre and post-well received 2053 DMO sale.
• Bunds toppy above 130.00 between 130.10-129.80 parameters and T-note lags in tight 109-20/14 band awaiting US housing data, 20 year supply and the start 2-day Fed meeting.
• Click here for more detail.

COMMODITIES

• WTI and Brent November futures remain on a positive footing after settling firmer on Monday with known fundamentals keeping the complex underpinned.
• However, following the OECD downgrades to 2024 growth views for numerous key economies including the EZ, Germany, UK & China some pressure has been seen across the commodity space; currently, WTI and Brent are firmer by circa. USD 0.50/bbl, having trimmed by a similar magnitude from earlier highs which saw Brent eclipse USD 95.00/bbl.
• Spot gold is essentially unchanged on the session given the USD remains contained overall but has been somewhat choppy within the current bounds, yellow metal continues to trade on either side of the 50-DMA at USD 1931/oz.
• Base metals are pressured given APAC losses and with further pressure emanating from the mentioned OECD forecasts.
• Click here for more detail.

NOTABLE US HEADLINES

• The UAW president said they will announce new plants to strike on Friday at 12:00EDT if there is no serious progress reached. In relevant news, Canada's Unifor president warned there would be a strike against all Ford (F) facilities if a deal was not reached on Monday night, while it was later reported that negotiations were continuing with a late caucus meeting.
• Canada's Unifor union says it is extending negotiations with Ford Motor (F) for a 24hr period; unions received a substantive offer from the employer minutes before the deadline; bargaining continued throughout the night.
• Click here for the US Early Morning Note.

NOTABLE EUROPEAN HEADLINES

• OECD: The world economy is expected to grow by 3.0% in 2023, before slowing down to 2.7% in 2024. A disproportionate share of global growth in 2023-24 is expected to continue to come from Asia, despite the weaker-than-expected recovery in China. Click here for more detail.
• BoE's Woods (FPC/PRC) says we are seeing a pick-up in impairments across the financial sector from a very low base, interested in banks' exposure to the Chinese property sector.

NOTABLE EUROPEAN DATA

• EU Current Account SA, EUR (Jul 2023) 20.9B (Prev. 35.84B); NSA, EUR (Jul 2023) 26.85B (Prev. 36.77B)
• EU HICP Final YY (Aug 2023) 5.2% vs. Exp. 5.3% (Prev. 5.3%); X Food & Energy Final YY (Aug 2023) 6.2% vs. Exp. 6.2% (Prev. 6.2%)
• EU HICP-X Food, Energy, Alcohol & Tobacco Final YY (Aug 2023) 5.3% vs. Exp. 5.3% (Prev. 5.3%)

GEOPOLITICS

• G7 Foreign Ministers meeting chair Japan said Russia must withdraw its troops and military equipment from the internationally recognised territory of Ukraine immediately, completely and unconditionally, while G7 members condemned Russia for staging sham elections in illegally occupied territories of Ukraine and will never recognise Russia's illegitimate claims. G7 reiterated the call on third parties to cease any and all assistance to Russia's war of aggression or face severe costs and it called on China to press Russia to stop its military aggression and immediately withdraw its troops from Ukraine.
• Russian and Chinese Foreign Ministers noted the 'futility' of attempts to resolve the Ukraine crisis without due account for Russian interest and participation, while they also noted the closeness of their positions on the anti-Russian and anti-Chinese character of US actions in international affairs, according to Reuters.
• US State Department said following a meeting between Secretary of State Blinken and Chinese Vice President Han that the sides had a candid and constructive discussion. Furthermore, they exchanged views on Russia's war in Ukraine and North Korea's provocative actions, while Blinken underscored the importance of peace across the Taiwan Strait, according to Reuters.
• US, Japan and South Korea officials shared concerns that Russia-North Korea cooperation may have a negative impact on peace and stability in the Indo-Pacific, according to Japan's Foreign Ministry.
• South Korean Foreign Ministry announced the successful transfer of Iran's frozen funds to a third country and hopes that this will lead to the development of bilateral ties, according to Reuters.
• White House said it was deeply concerned about allegations made by Canadian PM Trudeau regarding the killing of a Sikh leader and it is critical that Canada's investigation proceed and perpetrators are brought to justice. Furthermore, India's government said allegations of Indian government involvement in any act of violence in Canada are absurd and motivated, while it added that allegations made by Canadian PM Trudeau to PM Modi regarding India's involvement in any act of violence in Canada were completely rejected, according to Reuters.
• IAEA says negotiations with Iran are not progressing as quickly as required, according to Al Arabiya.
• Azerbaijan's Defence Ministry has started "anti-terrorist" operations in Karabakh, according to Tass; "Large fighting begins near Stepanakert in Nagorno-Karabakh as Azerbaijan announces start of operation", according to ELINT News.

CRYPTO

• Bitcoin is marginally firmer on the session, it failed an initial test of the USD 27k mark to the upside but has since surpassed the mark to a USD 27.37k peak; prior to this, the 27k handle had not been surpassed since the marked downside on September 18th.

APAC TRADE

• APAC stocks were mostly lower following the flat performance stateside amid a lack of catalysts and with risk appetite sapped as markets brace for the approaching flurry of central bank meetings.
• ASX 200 was pressured as weakness in real estate and financials led the declines from early on, while the RBA minutes from the September meeting provided very little in the way of new information.
• Nikkei 225 underperformed as recent losses in the region caught up to the index on return from the holiday closure and with sentiment also dampened with participants second-guessing if BoJ Governor Ueda will lay the groundwork this week for a future exit.
• Hang Seng and Shanghai Comp were choppy owing to the pressure in tech and mixed fortunes among the property stocks but with downside stemmed following further US-China talks and the PBoC’s continued liquidity efforts.

NOTABLE ASIA-PAC HEADLINES

• Chinese Foreign Minister Wang said China and Russia pursue an independent foreign policy and the cooperation between the sides is not aimed at a third party and will not be influenced by a third party. Wang also stated that China and Russia should follow the trend of progress of the times, show their responsibilities as major countries, fulfil their international obligations and strengthen strategic cooperation.
• China summoned the German envoy after German Foreign Minister Baerbock's recently described Chinese President Xi as a dictator on US television, according to SCMP.
• European Commission Vice President Vera Jourova said it is important that China and EU keep communications open including in various degrees where they disagree, while she added China is a partner, competitor and systemic rival for Europe. Furthermore, she added that China's continued economic success requires an attractive investment environment for foreign companies and that the EU does not seek to decouple from China.
• RBA Minutes from the September 5th meeting stated they considered raising rates by 25bps or holding steady and the case for holding steady was stronger, while it added that recent data did not materially alter the economic outlook. Furthermore, it reiterated that some further tightening of monetary policy may be required should inflation prove more persistent than expected.
• Japan ruling LDP senior official Seko says economic stimulus of a minimum of JPY 15tln is needed, and desirably JPY 20tln, according to Jiji press; size of economic stimulus must be around 3% of GDP.