• APAC stocks declined following the losses on Wall Street where stocks and bonds resumed their slide.
• European equity futures are indicative of a lower open with Euro Stoxx 50 future -0.2% after the cash market closed down 1.0% yesterday.
• DXY lingers above the 107 mark, USD/JPY sits on a 149 handle after yesterday's suspected intervention.
• Japanese Finance Minister Suzuki responded 'no comment' when asked if Japan intervened.
• RBNZ kept rates unchanged at 5.50% and refrained from any hawkish surprises.
• Looking ahead, highlights include EZ, UK, US Services and Composite PMIs, EZ Producer Prices, Retail Sales, US MBA, ADP, ISM, Durable Goods, NBP Policy Announcement, OPEC+ JMMC, ECB’s Lagarde, de Guindos & Panetta, Fed’s Schmid, Bowman & Goolsbee, Supply UK & Germany.

US TRADE

EQUITIES

• US stocks were pressured and bonds also declined throughout the session after JOLTS data showed a spike in the August job openings figures and stoked fears concerning a retightening of the labour market, while attention was also on the FX market amid suspected Yen intervention which saw USD/JPY plunge around 300 pips within a few minutes after the cross breached the 150.00 'threshold'.
• SPX -1.37% at 4,229, NDX -1.83% at 14,565, DJIA -1.29% at 33,002, RUT -1.69% at 1,727.
• Click here for a detailed summary.

NOTABLE US HEADLINES

• Fed's Bostic (non-voter) said he sees the next move as a single 25bps rate cut towards the end of next year and higher long-term rates are not impacting business beyond what would happen in a normal tightening cycle. Furthermore, he sees inflation approaching the 2% target by the end of 2025 and said there is still "work to do" lowering inflation, but is confident underlying price trends are slowing.
• Fed's Mester (non-voter) said she is likely to favour a hike at the next meeting if the current economic situation holds, while she added the long-term yield rise will affect the monetary policy outlook and higher long-term rates will moderate growth. Mester also said the Fed is likely at or near the peak for the interest rate target and doesn't see rate cuts any time soon.
• US Treasury Secretary Yellen is very optimistic about the outlook for the US economy, while she said the US is on a path of fiscal sustainability and it is her job to worry about fiscal sustainability.
• US House voted 216-210 to remove Kevin McCarthy as House Speaker and the House Speaker's office was declared vacant, while US House Republican McHenry will serve as interim Speaker.
• Former House Speaker McCarthy confirmed he will not be in the running for Speaker again. Furthermore, GOP Rep. Garcia said there will be a closed forum next Tuesday to discuss candidates for House Speaker and GOP Rep. Jordan said House Republicans will meet next Wednesday to vote on a new House Speaker.

APAC TRADE

EQUITIES

• APAC stocks declined following the losses on Wall Street where stocks and bonds resumed their slide.
• ASX 200 was dragged lower by underperformance in tech, real estate and the top-weighted financial sector with headwinds amid the continued upside in yields.
• Nikkei 225 extended on losses beneath the 31,000 level amid wide speculation of FX intervention and with Japanese officials out in force but refusing to confirm or deny whether they intervened.
• KOSPI underperformed on return from the extended holiday despite encouraging Industrial Production data which showed a surprise expansion.
• Hang Seng conformed to the downbeat mood amid the continued absence of mainland participants and with pressure on tech, energy and casino stocks.
• US equity futures (ES -0.2%) marginally extended on losses amid the broad risk-off mood in Asia.
• European equity futures are indicative of a lower open with Euro Stoxx 50 future -0.2% after the cash market closed down 1.0% yesterday.

FX

• DXY was rangebound after the prior day’s fluctuations in which the initial upward momentum was offset amid suspected Japanese FX intervention, while the dollar largely ignored the latest Fed rhetoric and a historic showdown in the House where McCarthy became the first-ever Speaker to be ousted.
• EUR/USD was lacklustre with the single currency stuck near YTD lows beneath the 1.0500 handle.
• GBP/USD was uninspired after the prior day’s failed attempt to reclaim the 1.2100 status.
• USD/JPY was back at the 149.00 handle after having retraced most of the recent intervention-speculated slump as several officials stuck to the familiar jawboning and remained tight-lipped on whether they intervened.
• Antipodeans were mixed with AUD/USD flat for most of the session before picking up ahead of the European entrance whilst NZD/USD was pressured in reaction to the RBNZ rate decision where the central bank kept rates unchanged at 5.50% and refrained from any hawkish surprises.
• Japan's top currency diplomat Kanda reiterated 'no comment' on FX intervention and wouldn't comment on whether he discussed a weak yen with PM Kishida, while he said it is normal for authorities not to comment on whether they intervened or not.
• Japanese Finance Minister Suzuki said currency rates should be set by the market and rapid FX moves are undesirable. Suzuki added that FX stability is important and won't rule out any options against excessive moves, while he responded 'no comment' when asked if Japan intervened.
• Japanese Chief Cabinet Secretary Matsuno said 'no comment' on whether Japan intervened in the FX market and said it is important for currencies to move stably reflecting fundamentals. Matsuno also reiterated that they will continue to take appropriate steps on FX.

FIXED INCOME

• 10yr UST futures extended on declines as yields continued to edge higher after strong JOLTS data stoked tightening labour market concerns and further underscored the higher-for-longer narrative.
• Bund futures remained on the back foot and trickled beneath the 127.00 level.
• 10yr JGB futures were pressured amid spillover selling from peers and with mild gains in Japan's 10yr yield, while 10yr JGB swaps reached the 1.0% level to match the BoJ’s upper implementation limit.

COMMODITIES

• Crude futures were little changed after with WTI beneath USD 90/bbl as demand was hampered by the risk-off mood and mixed private sector inventory data, while attention turns to the OPEC JMMC.
• US Energy Inventory Data (bbls): Crude -4.2mln (exp. -0.5mln), Gasoline +3.9mln (exp. +0.2mln), Distillate +0.3mln (exp. -0.3mln), Cushing +0.7mln
• Kuwait's KIPIC said a third refinery in the Al Zour oil compound is to start operations this month
• Spot gold struggled for direction overnight as the greenback remained afloat.
• Copper futures retreated amid the broad weakness across Asian bourses.

CRYPTO

• Bitcoin traded flat with prices capped by resistance at the USD 27,500 level.
• Ripple secured a major payments institution licence from the Monetary Authority of Singapore.

NOTABLE ASIA-PAC HEADLINES

• US Treasury Secretary Yellen said the US has become overly dependent on China for critical supply chains, particularly in clean energy products and needs to broaden out sources of supply.
• Japan plans to relax rules on building in areas such as farmland and forests as early as December to alleviate the land shortage holding up factory investments for goods such as semiconductors, batteries, and biotech, according to Nikkei.
• RBNZ kept the OCR unchanged at 5.50% as expected, while it noted that the Committee agreed the OCR needs to remain at a restrictive level and that interest rates are constraining economic activity and reducing inflationary pressure as required. RBNZ said demand growth in the economy continues to ease and that GDP growth in the June quarter was stronger than anticipated but the growth outlook remains subdued. Furthermore, it stated that with monetary conditions remaining restrictive, spending growth is expected to decline further.

DATA RECAP

• Japanese Services PMI (Sep F) 53.8 (Prelim. 53.3)
• Japanese Composite PMI (Sep F) 52.1 (Prelim. 51.8)
• Australian Services PMI (Sep F) 51.8 (Prelim. 50.5)
• Australian Composite PMI (Sep F) 51.5 (Prelim. 50.2)

GEOPOLITICS

• North Korea criticised the US for describing China and Russia as a threat in a new WMD strategy, while North Korea will counter US provocations with a massive response, according to KCNA.

EU/UK

NOTABLE HEADLINES

• Germany is seeking a "grand bargain" with France to resolve the stalemate regarding nuclear power and help pave the way for a sweeping reform of the bloc's electricity market, according to FT.