• European bourses are closed for Labour Day, with the exception of the UK’s FTSE 100, which is incrementally firmer; US equity futures are entirely in the red
• Dollar is flat with G10 peers also holding pattern awaiting a slew of US data and the FOMC
• USTs are unchanged ahead of today’s key events, with QRA also in focus; Gilts subdued
• Crude sinks lower, XAU is incrementally firmer and base metals are lower across the board
• Looking ahead, US Manufacturing PMI, ISM, US ADP, JOLTS, FOMC Announcement, Treasury QRA, Fed Chair Powell, BoC’s Macklem & Rogers. Earnings from CVS, Qualcomm, MetLife, Pfizer, ADP, Marriott, Estee Lauder, Mastercard & eBay

EUROPEAN TRADE - All major European markets (ex-UK) are closed for Labour Day

EQUITIES

• European bourses are closed for Labour Day, with the exception of the UK’s FTSE 100 and Denmark’s Nasdaq Copenhagen.
• The FTSE 100 (+0.1%) is incrementally firmer, though has come under slight selling pressure in recent trade. GSK (+1.9%) gains post-earnings after beating on top/bottom lines, and raising guidance.
• US Equity Futures (ES -0.3%, NQ -0.6%, RTY -0.3%) are entirely in the red, with clear underperformance in the NQ, hampered by chip-led weakness. Amazon (+2.3%) firmer pre-market on its results, whilst dire Starbucks (-12.1%) earnings have led to pre-market pressure.
• Click here and here for the sessions European pre-market equity newsflow, including notable earnings/updates from: GSK, Haleon & Aston Martin
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FX

• USD is steady vs. peers after yesterday's buying momentum followed through into the early stages of today's trading with the index topping out just shy of the YTD peak at 106.51. A slew of US data and the FOMC thereafter will decide direction.
• EUR is flat vs. the USD with European markets closed for Labour Day. EUR/USD did drift as low as 1.0650 before staging a marginal pick up.
• JPY is trivially softer vs. the USD (compared to recent moves) with the pair briefly eclipsing the 158 mark. Focus is on today's busy US data/FOMC docket and whether a hawkish outturn could see a revisit to 160.
• Antipodeans are both relatively steady vs. the USD after yesterday's pronounced selling. AUD/USD marginally extended on yesterday's low with the session trough at 0.6466 before picking up a touch.
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• Click here for OpEx for today's NY Cut

FIXED INCOME

• USTs are flat ahead of a packed US session, holding at 107-14 which is 10 ticks above the contract low from last week. Alongside this, Quarterly refunding is due after Monday's estimates were above exp., though coupon sizes seen unch. Q/Q with the extra need to be filled by bills.
• Gilts are softer as the benchmark catches up to the continued late-doors downside in benchmarks on Tuesday. Catalysts light thus far given the mass-European market closure for Labour Day. Gilt auction was incrementally softer than the prior but still solid overall with a few fleeting downticks to a 95.44 base.
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COMMODITIES

• A downbeat session for the crude complex thus far amid the broader risk aversion in APAC hours coupled with the surprise large build in crude stockpiles and the "positive" atmosphere in efforts to reach an Israel-Hamas ceasefire. Brent July slipped from a USD 85.88/bbl high to a trough at USD 85.22/bbl.
• A flat session for spot gold but mixed for the overall complex with spot silver posting mild gains and spot palladium in the red. Price action in the yellow metal has been minimal thus far amid the aforementioned mass closures and upcoming risk events state-side; Spot gold is currently confined to a USD 2,281-2,293.oz.
• Base metals are lower across the board amid the negative APAC sone coupled with low demand amid mass market closures. On that note, Chinese markets will remain closed for the rest of the week.
• US Energy Inventory Data (bbls): Crude +4.9mln (exp. -1.1mln), Gasoline -1.5mln (exp. -1.1mln), Distillate -2.2mln (exp. -0.2mln), Cushing +1.5mln.
• US and Philippines reportedly eye a partnership to cut China's nickel dominance, according to Bloomberg.
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DATA RECAP

• UK S&P Global Manufacturing PMI (Apr) 49.1 vs. Exp. 48.7 (Prev. 48.7)
• UK Nationwide House Price MM (Apr) -0.4% vs. Exp. 0.2% (Prev. -0.2%); YY (Apr) 0.6% vs. Exp. 1.2% (Prev. 1.6%)

EARNINGS

• Amazon (AMZN) Q1 EPS 0.98 (exp. 0.83), Q1 revenue USD 143.31bln (exp. 142.5bln); North America net sales USD 86.34bln (exp. 85.55bln), International net sales USD 31.94bln (exp. 32.47bln); Q1 AWS net sales ex-FX +17% (exp. +14.5%); Q1 operating margin 10.7% (exp. 7.63%); Q1 North American retail operating margin 5.8% (exp. 5%). Sees Q2 net sales between USD 144-149bln (exp. 150.13bln), sees Q2 operating income of USD 12bln (exp. 12.7bln). Shares +2.4% pre-market
• Starbucks (SBUX) Q2 adj. EPS 0.68 (exp. 0.79), Q2 revenue USD 8.56bln (exp. 9.13bln); Q2 comp. sales -4% (exp. +1.46%), North America comps -3% (exp. +2.05%), US comps -3% (exp. +2.31%), International comps -6% (exp. +1.36%), China comps -11% (exp. -1.62%) Shares -12.1% pre-market
• Super Micro (SMCI) Q3 adj. EPS of 6.65 (exp. 5.78), Q3 revenue of USD 3.85bln (exp. 3.95bln); Q3 gross margin 15.6% (exp. 15.34%) Shares -9% pre-market
• Advanced Micro Devices (AMD) Q1 adj. EPS 0.62 (exp. 0.61), Q1 revenue USD 5.47bln (exp. 5.46bln). Sees Q2 revenue between USD 5.4-6bln (exp. 5.72bln), sees Q2 adj. gross margin of about 53% (exp. 53%), and sees AI chips sales of about USD 4bln (prev. saw USD 3.5bln). Shares -6.3% pre-market
• GSK (GSK LN) Q1 (GBP): Revenue 7.363bln (exp. 7.067bln). EPS 0.431 (exp. 0.360). Adj. Operating Profit 2.443bln (exp 2.096bln). Sees FY adj. EPS +8-10% (prev. +6-9%) and sees Adj. FY operating profit +9-11% (prev. +7-10%). Shares +1.6% in European trade

NOTABLE US HEADLINES

• WSJ's Timiraos wrote "It's another wait-and-see meeting for the Fed, but this time, the questions are likely to be tilted in the direction of filling out the Fed's reaction function for upside risks on inflation and wages rather than downside risks or benign inflation", via social media platform X.
• Brazil's Embraer is said to be plotting a new 737-sized jet to rival Boeing (BA), according to WSJ citing sources

GEOPOLITICS

• Walla's Elster citing a senior Egyptian source who told local media that efforts to reach a truce agreement continue in a "positive atmosphere"
• Hamas official says the group still studying recent ceasefire offer
• Philippines Coast Guard official said China's Coast Guard has elevated the tension and level of aggression, while the official added the Chinese Coast Guard's use of a water cannon is still not an armed attack but is using higher water pressure, according to Reuters.

CRYPTO

• Bitcoin (-4.3%) sank briefly below USD 57k after hefty selling pressure; currently holds just above the aforementioned level; Crypto stocks sink lower.

APAC TRADE

• APAC stocks took their cues from the losses on Wall St amid a hawkish impulse owing to the firmer-than-expected Employment Cost data heading into today's FOMC and with trade mired by mass holiday closures.
• ASX 200 was pressured as gold miners led the declines after the precious metal slid beneath the USD 2,300/oz level, with underperformance also seen in rate-sensitive sectors.
• Nikkei 225 slipped at the open but held on to 38,000 status and briefly clawed back all of its losses with the downside cushioned by a weaker currency and as participants digested another batch of earnings releases, while it was also reported that Japan could provide tax breaks for companies repatriating foreign profits into the JPY.

NOTABLE ASIA-PAC HEADLINES

• NDRC said China will promote the development and growth of leading companies in the NEV industry, as well as accelerate the exit of lagging enterprises and capacities. Furthermore, China will lift foreign investment access restrictions in the manufacturing industry and it welcomes global automotive companies to deeply integrate into China's market and industrial chain system.
• Japan may introduce measures to provide tax breaks for companies repatriating foreign profits into the JPY and include it in the government's annual mid-year policy blueprint, according to Sankei.
• RBNZ Financial Stability Report stated New Zealand’s financial system remains strong and rising nominal incomes are helping many households navigate the transition onto higher interest rates, while it added some are doing it tough and reducing their spending or extending their repayment timelines. RBNZ also stated that although non-performing loans to businesses have increased, they remain low by historical standards and there remains a risk that new or persistent inflation pressures could mean global interest rates remain restrictive for longer.
• RBNZ Deputy Governor Hawkesby said New Zealand's employment data is confirmation of the trend they were expecting to see and higher interest rates will involve a cooling of the labour market.
• Japan's Government is considering laws and regulations for AI development and obligatory reporting to large-scale business, via Nikkei

APAC DATA RECAP

• Japanese Manufacturing PMI (Apr F) 49.6 (Prelim. 49.9)
• Australian Manufacturing PMI (Apr F) 49.6 (Prelim. 49.9); AIG Manufacturing Index (Apr) -13.9 (Prev. -7.0); Construction Index (Apr) -25.6 (Prev. -12.9)
• New Zealand HLFS Job Growth QQ (Q1) -0.2% vs. Exp. 0.3% (Prev. 0.4%); HLFS Unemployment Rate (Q1) 4.3% vs. Exp. 4.2% (Prev. 4.0%); Participation Rate (Q1) 71.5% vs. Exp. 71.9% (Prev. 71.9%)
• New Zealand Labour Cost Index QQ (Q1) 0.8% vs. Exp. 0.8% (Prev. 1.0%); YY (Q1) 3.8% vs. Exp. 3.8% (Prev. 3.9%)