• APAC stocks traded mixed amid a higher yield environment and after this week’s central bank frenzy culminated with a lack of surprises from the BoJ.
• BoJ kept monetary policy settings unchanged and made no change to forward guidance with the central bank to patiently continue monetary easing.
• European equity futures are indicative of a softer open with the Euro Stoxx 50 future -0.3% after the cash market closed down 1.5% yesterday.
• DXY remains firm on a 105 handle, JPY lags post-BoJ with USD/JPY around the 148 mark, Cable is sub-1.23.
• Australian unions agreed to endorse recommendations made by the industrial umpire to end the dispute with Chevron.
• Looking ahead, highlights include French, German, EU, UK & US PMIs (Flash), Canadian Retail Sales, UK CBI Trends, BoJ Governor Ueda, ECB’s de Guindos, Riksbank’s Thedeen, Fed’s Daly, Cook & Kashkari.

US TRADE

EQUITIES

• US stocks extended on losses to finish at session lows and bonds remained pressured as yields continued to climb in the fallout from the Fed's hawkish pause, while participants also digested mixed data releases and a slew of central bank updates including the BoE which narrowly paused on rates.
• SPX -1.64% at 4,330, NDX -1.84% at 14,694, DJI -1.08% at 34,070, RUT -1.56% at 1,782.
• Click here for a detailed summary.

NOTABLE US HEADLINES

• US Senate Majority Leader Schumer said could use the FAA bill as a vehicle for a stopgap funding measure. In relevant news, the House again refused to allow debate on the FY24 defence spending bill as the government shutdown deadline nears.

APAC TRADE

EQUITIES

• APAC stocks traded mixed amid a higher yield environment and after this week’s central bank frenzy culminated with a lack of surprises from the BoJ.
• ASX 200 was dragged lower with real estate and tech among the worst performers after the Australian 10yr yield touched its highest level since 2014, while the flash PMI data was mixed and showed a deeper contraction in manufacturing.
• Nikkei 225 was pressured following the mostly firmer-than-expected Japanese CPI data but then pared some of the losses following the lack of hawkish surprises from the BoJ.
• Hang Seng and Shanghai Comp shrugged off early jitters amid supportive measures including Beijing’s draft rules to promote a high level of opening up and encourage foreign investments, while China's market regulator also issued measures to promote the private economy.
• US equity futures (ES +0.2%) moved off lows but with trade rangebound amid an anticlimactic BoJ.
• European equity futures are indicative of a softer open with Euro Stoxx 50 futures -0.3% after the cash market closed down 1.5% yesterday.

FX

• DXY was marginally firmer amid the upside in yields albeit with gains capped after the prior day's choppy performance and mixed data releases.
• EUR/USD was lacklustre with trade contained despite ECB speakers out in force yesterday in which several suggested a pause next month.
• GBP/USD languished below 1.2300 after the BoE's close-call decision to keep rates unchanged.
• USD/JPY reclaimed the 148.00 handle in the aftermath of an unsurprising BoJ decision.
• Antipodeans traded sideways amid the tentative mood and
• PBoC set USD/CNY mid-point at 7.1729 vs exp. 7.3009 (prev. 7.1730)
• Russia introduced export duties linked to the USD/RUB exchange rate until end-2024.

FIXED INCOME

• 10yr UST futures were stuck near the prior day’s lows as yields continued to edge higher including the US 10yr yield which rose above 4.50% for the first time since 2007.
• Bund futures lacked direction after its recent whipsawing and deluge of ECB rhetoric.
• 10yr JGB futures nursed some of this week's losses with brief support seen after the lack of hawkish surprises from the BoJ.

COMMODITIES

• Crude futures resumed the prior day's rebound with WTI back above USD 90/bbl.
• Australian unions agreed to endorse recommendations made by the industrial umpire to end the dispute with Chevron (CVX) and agreed to call off strikes at Chevron facilities.
• Spot gold eked slight gains as commodities continued nursing post-Fed losses.
• Copper futures were kept afloat as risk appetite in the region gradually improved.

CRYPTO

• Bitcoin was rangebound with price action contained after a recent slip below USD 27,000.

NOTABLE ASIA-PAC HEADLINES

• Chinese Vice President Han Zheng said China remains committed to opening itself up to the wider world and to an independent foreign policy, while it stays committed to safeguarding sovereignty and territorial integrity, according to Reuters.
• China's market regulator issued measures to promote the private economy and China will continue to break down market access barriers for the private economy, according to state media.
• BoJ kept its monetary policy settings unchanged, as expected, with rates held at -0.1% and QQE with YCC maintained to target 10yr JGBs at 0% with a +/-50bps band via unanimous vote, while it made no change to forward guidance with the central bank to patiently continue monetary easing. BoJ stated that Japan's economy is recovering moderately and inflation expectations show renewed signs of accelerating, as well as noted that they must watch financial and forex market moves and the impact on Japan's economic activity and prices.
• Japanese PM Kishida said he will reform the asset management sector and will introduce a new programme to assist new entrants to the asset management sector. Furthermore, Kishida said it is important for FX to move stably, reflecting economic fundamentals.

DATA RECAP

• Japanese National CPI YY (Aug) 3.2% vs. Exp. 3.0% (Prev. 3.3%)
• Japanese National CPI Ex. Fresh Food YY (Aug) 3.1% vs. Exp. 3.0% (Prev. 3.1%)
• Japanese National CPI Ex. Fresh Food & Energy YY (Aug) 4.3% vs. Exp. 4.3% (Prev. 4.2%)
• Japanese Manufacturing PMI Flash SA (Sep) 48.6 (Prev. 49.6)
• Japanese Services PMI Flash SA (Sep) 53.3 (Prev. 54.3)
• Australian Manufacturing PMI Flash (Sep) 48.2 (Prev. 49.6)
• Australian Services PMI Flash (Sep) 50.5 (Prev. 47.8)
• New Zealand Trade Balance (NZD)(Aug) -2291.0M (Prev. -1107.0M)
• New Zealand Exports (NZD)(Aug) 4.99B (Prev. 5.45B)
• New Zealand Imports (NZD)(Aug) 7.28B (Prev. 6.56B)

GEOPOLITICS

• US President Biden said in a meeting with Ukrainian President Zelensky that Russia alone stands in the way of peace and Russia is seeking more weapons from Iran and North Korea, while he added that Russia hopes to use winter as a weapon against the Ukrainian people. Biden announced USD 325mln of security aid for Ukraine and that the first US Abrams tanks would be delivered to Ukraine next week.
• Ukrainian President Zelensky said that they reached an agreement to strengthen Ukraine's defence capabilities and that the US will help Ukraine boost air defence during the winter, while they agreed on steps to expand exports of grain from Ukraine, according to Reuters.
• Chinese Vice President Han Zheng says China supports all efforts that are conducive to the peaceful resolution of the Ukraine crisis and stands ready to continue playing a constructive role for an early attainment of peace, according to Reuters.
• US State Department approved the possible sale of a weapons supply support package to Saudi Arabia for an estimated cost of USD 500mln.
• US considers twin defence treaties to achieve Israel-Saudi normalisation, according to Bloomberg.

EU/UK

NOTABLE HEADLINES

• BoE Governor Bailey said it is good news that inflation in the UK is coming down and they have to stay the course on the inflation fight, while he expects the next noticeable drop in UK inflation will be in the October number released in November.
• ECB's Lane said he sees a staggered reset of prices and wages across the economy which is an ongoing process and noted the dynamics of wages and profits in the coming quarters are still open questions. Lane commented that the transmission of monetary policy to the broader financing conditions in the real economy is firmly taking hold and the effect of some past tightening is still in the pipeline, while the ECB will be sufficiently restrictive for as long as necessary.

DATA RECAP

• UK GfK Consumer Confidence (Sep) -21.0 vs. Exp. -27.0 (Prev. -25.0)