• APAC stocks shrugged off the mixed lead from the US and gained as participants digested a slew of key data; Nikkei 225 was among the biggest gainers after GDP data topped forecasts.
• Chinese activity data was mixed as industrial production disappointed but retail sales topped forecasts; China's stats bureau said China's economic operation was generally stable in July and added domestic demand is likely to improve due to policy support.
• Fed's Bostic (voter) is open to a September rate cut as inflation cools, and noted the labour market is weakening but is not weak, according to the FT.
• European equity futures indicate a firmer open with Euro Stoxx 50 futures up 0.4% after the cash market finished with gains of 0.7% on Wednesday.
• Looking ahead, highlights include UK GDP, US NY Fed Manufacturing, Export/Import Prices, IJC, Retail Sales, Norges Bank Policy Announcement, Comments from Fed’s Musalem, Harker & Norges Bank’s Bache, Earnings from Zealand Pharma, Deere, Alibaba & Walmart.

US TRADE

EQUITIES

• US stocks traded mixed as participants digested the latest CPI data which mostly printed in line with expectations and failed to live up to the dovishness of the recent PPI release although there were no signs of concern within the report, while the data did very little to alter Fed rate expectations with September seen as a guaranteed cut.
• SPX +0.38% at 5,455, NDX +0.09% at 19,023, DJIA +0.61% at 40,008, RUT -0.52% at 2,084
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Bostic (voter) is open to a September rate cut as inflation cools and said as price pressures ease officials also need to be conscious of their mandate of maintaining full employment, while he added the labour market is weakening but is not weak, according to FT.
• Fed's Goolsbee (non-voter) said climbing unemployment may indicate a worsening job market, while he added that policy is 'very restrictive' and the economy is not overheating. Furthermore, he said economic conditions will warrant the size of rate cuts and he is more concerned about jobs mandate 'on the margin'.
• White House Economic Adviser Bernstein said inflation is trending in the right direction.

APAC TRADE

EQUITIES

• APAC stocks shrugged off the mixed lead from the US and gained as participants digested a slew of key data.
• ASX 200 traded higher but with gains capped as participants digested earnings releases and jobs data.
• Nikkei 225 was among the biggest gainers after GDP data topped forecasts and showed a return to growth.
• Hang Seng and Shanghai Comp. gradually advanced in the aftermath of mixed Chinese activity data in which industrial production disappointed but retail sales topped forecasts, while Chinese indices were also unfazed by the steeper contraction in home prices. Furthermore, the PBoC delayed its MLF operation to later in the month but announced a firm liquidity injection via 7-day reverse repos which is meant to counteract maturing MLF loans, tax payments and government bond issuance.
• US equity futures edge modest gains alongside the mostly positive mood in Asia.
• European equity futures indicate a firmer open with Euro Stoxx 50 futures up 0.4% after the cash market finished with gains of 0.7% on Wednesday.

FX

• DXY was rangebound after the recent US CPI data mostly matched estimates, while attention turns to upcoming Fed speakers and data releases including Retail Sales, Industrial Production and Initial Jobless Claims.
• EUR/USD traded sideways and just about held on to the recently reclaimed 1.1000 status.
• GBP/USD struggled for direction as participants awaited the UK preliminary Q2 GDP data.
• USD/JPY was indecisive amid the positive tone in Japan and stronger-than-expected GDP data.
• Antipodeans were kept afloat with AUD/USD boosted after the stronger-than-expected Employment Change which was solely fuelled by new full-time jobs and although there was an increase in the Unemployment Rate, this coincided with a higher participation rate.

FIXED INCOME

• 10-year UST futures traded subdued amid slight upside in yields and following the mostly in-line US CPI.
• Bund futures were restrained following the recent pullback to beneath the 135.00 level.
• 10-year JGB futures lacked demand amid gains in Japanese stocks and stronger-than-expected GDP data.

COMMODITIES

• Crude futures traded rangebound with Brent and WTI around the USD 80/bbl and USD 77/bbl levels respectively, after recent declines and with prices not helped by a surprise build in DoE stockpiles.
• Spot gold nursed some of the prior day's losses following the pressure in the aftermath of the US CPI data.
• Copper futures gradually edged higher alongside the positive risk sentiment but with gains capped as participants reflected on the mixed Chinese activity data and steeper contraction in the nation's house prices.
• BHP (BHP AT) and the striking union at the Escondida copper mine in Chile failed to resume formal negotiations although operations continue under contingency plans. Furthermore, BHP said it asked the union to suspend the strike temporarily to resume dialogue although the union declined.

CRYPTO

• Bitcoin extended on the prior day's losses and retreated beneath the USD 59,000 level.

NOTABLE ASIA-PAC HEADLINES

• PBoC announced it will conduct its MLF operation on August 26th and injected CNY 577.7bln via 7-day reverse repos, while it added that the reverse repo operation today is meant to counteract maturing MLF loans, tax payments and government bond issuances.
• China's stats bureau said China's economic operation was generally stable in July but noted a rising negative impact from changes to China's external environment, while it stated the economic recovery trend needs to be consolidated and expects the recovery in consumption to consolidate as policies gain traction. Furthermore, it said domestic demand is likely to improve due to policy support and Chinese foreign trade remains resilient despite rising protectionism.
• RBNZ Governor Orr addressed a parliamentary committee in which he stated that CPI is returning sustainably to the target band of 1%-3% and the current economic environment is weak with the economy weaker than anticipated six months ago. Orr added there is no talk on the committee of raising rates again and policy discussions in the future will focus on whether to maintain or reduce rates, as well as noted that they are to proceed with caution in adjusting interest rates and that removing restraint is appropriate for now.

DATA RECAP

• Chinese Industrial Production YY (Jul) 5.1% vs. Exp. 5.2% (Prev. 5.3%)
• Chinese Retail Sales YY (Jul) 2.7% vs. Exp. 2.6% (Prev. 2.0%)
• Chinese Urban Investment (YTD) YY (Jul) 3.6% vs. Exp. 3.9% (Prev. 3.9%)
• Chinese Urban Unemployment Rate (Jul) 5.2% (Prev. 5.0%)
• Chinese House Prices YY (Jul) -5.0% (Prev. -4.5%)
• Japanese GDP QQ (Q2) 0.8% vs. Exp. 0.5% (Prev. -0.7%, Rev. -0.6%)
• Japanese GDP QQ Annualised (Q2) 3.1% vs. Exp. 2.1% (Prev. -2.9%, Rev. -2.3%)
• Australian Employment (Jul) 58.2k vs. Exp. 20.0k (Prev. 50.2k)
• Australian Full Time Employment (Jul) 60.5k (Prev. 43.3k)
• Australian Unemployment Rate (Jul) 4.2% vs. Exp. 4.1% (Prev. 4.1%)
• Australian Participation Rate (Jul) 67.1% vs. Exp. 66.9% (Prev. 66.9%)

GEOPOLITICAL

MIDDLE EAST

• US Secretary of State Blinken and Qatar’s PM warned all sides not to undermine Gaza ceasefire talks set to open in the Gulf nation, in a veiled warning to Iran, Hamas and Israel, according to Al Arabiya.
• US sources told Axios that former President Trump spoke with Israeli PM Netanyahu on Wednesday and encouraged Netanyahu to accept the deal to free hostages and for a ceasefire in Gaza.
• IRGC-linked hacking group APT42 has been targeting personal accounts of individuals connected to President Biden, VP Harris, and former President Trump, including current and former government officials, as well as those involved with their campaigns, according to Iran International citing Google.

OTHER

• Russia conducted a missile attack on Ukraine's Odesa which targeted port infrastructure and injured one person, according to Reuters citing the regional governor.
• South Korean President Yoon laid out the blueprint for establishing a unified Korea and said the freedoms enjoyed in the South must be extended 'to the frozen kingdom of the North'. Yoon said they will create a North Korean human rights fund to support activists and offered to create a working-level consultation body with North Korea, while he added they are ready to begin political and economic cooperation if North Korea takes the initial step to denuclearise.