• APAC stocks followed suit to the rally on Wall St after a US data deluge soothed recent economic concerns.
• DXY marginally eased back beneath the 103.00 level after recently strengthening alongside the data deluge stateside.
• Israel will be on maximum readiness for a response from Hezbollah this weekend; Biden admin is reportedly “open” to sending long-range cruise missiles to Ukraine.
• European equity futures indicate a mildly positive open with Euro Stoxx 50 futures up 0.3% after the cash market finished with gains of 1.7% on Thursday.
• Looking ahead, highlights include UK Retail Sales, US Building Permits/Housing Starts, Uni. of Michigan (Prelim.), and Comments from Fed’s Goolsbee.

US TRADE

EQUITIES

• US stocks rallied and the dollar strengthened, while Treasuries saw notable weakness in reaction to the stronger-than-expected US retail sales and the surprise fall in initial jobless claims which helped ease recent economic concerns and pushed back against expectations for a 50bp rate cut from the Fed in September.
• SPX +1.61% at 5,543, NDX +2.46% at 19,490, DJIA +1.39% at 40,563, RUT +2.45% at 2,135
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed Chair Powell is to speak on August 23rd at 10:00EDT/15:00BST at the Kansas City Fed's Jackson Hole Symposium.
• Atlanta Fed GDPnow (Q3): 2.4% (prev. 2.9%) following the retail trade, industrial production, and import/export prices data.
• US VP Harris is to call for the construction of 3mln new housing units and tax incentives to build homes for first-time buyers, according to WSJ.

APAC TRADE

EQUITIES

• APAC stocks followed suit to the rally on Wall St after a US data deluge soothed recent economic concerns.
• ASX 200 gained as the commodity-related sectors spearheaded the advances seen across all industries.
• Nikkei 225 outperformed and surged firmly above the 37,000 level following recent currency weakness.
• Hang Seng and Shanghai Comp. were positive with JD.com, MTR, Li Ning and Alibaba among the biggest gainers in Hong Kong post-earnings, while the mainland index continued to lag amid lingering economic concerns.
• US equity futures marginally extended on the recent data-fuelled momentum.
• European equity futures indicate a mildly positive open with Euro Stoxx 50 futures up 0.3% after the cash market finished with gains of 1.7% on Thursday.

FX

• DXY marginally eased back beneath the 103.00 level after recently strengthening alongside the data deluge stateside where US Retail Sales topped forecasts and jobless claims unexpectedly declined, while there are more data releases scheduled later including US building approvals, housing starts and the Uni. of Michigan survey.
• EUR/USD recouped some lost ground although price action was limited and remained beneath the 1.1000 handle.
• GBP/USD kept afloat after recent whipsawing and mostly in-line GDP data, while UK Retail Sales data looms.
• USD/JPY pared some of its recent gains following a brief US data-induced surge to above the 149.00 level.
• Antipodeans eked mild gains amid tailwinds from the positive risk appetite and central bank rhetoric including from RBA Governor Bullock who stuck to the hawkish script and reiterated it is premature to be thinking about rate cuts.
• PBoC set USD/CNY mid-point at 7.1464 vs exp. 7.1739 (prev. 7.1399).

FIXED INCOME

• 10-year UST futures regained some composure and just about returned to above the 113.00 level after slumping yesterday on the stronger-than-expected Retail Sales and decline in Initial Jobless Claims.
• Bund futures rebounded off the prior day's lows although the recovery was limited with light catalysts ahead.
• 10-year JGB futures were subdued after Thursday's after-hours selling owing to the US data, while the latest 10-year inflation-indexed JGB auction resulted in a softer bid-to-cover and lower accepted prices.

COMMODITIES

• Crude futures gradually pulled back after climbing yesterday amid the US data and the geopolitical backdrop.
• Qatar lowered its October Al Shaheen crude term price to USD 0.87/bbl above Dubai quotes from a previous premium of USD 1.88/bbl in September.
• Spot gold was little changed as price action calmed down from the recent data-induced fluctuations.
• Copper futures gradually pared some of the spoils from the prior day's rally as Chinese sentiment lagged.

CRYPTO

• Bitcoin rebounded overnight and tested the USD 58,000 level to the upside.

NOTABLE ASIA-PAC HEADLINES

• RBA Governor Bullock said the board is of the view that it currently has the balance right between reducing inflation in a reasonable timeframe and noted their full employment goal is not served by letting inflation stay above target indefinitely. Bullock said based on what the board knows at present, it does not expect that it will be in a position to cut rates in the near term and the board’s message is that it is premature to be thinking about rate cuts, while she added that although goods price inflation has declined substantially, it has not been enough to offset continued high services price inflation. Furthermore, Bullock said the government and RBA are in complete agreement regarding inflation reduction and stated that public demand is currently not the main priority.
• RBNZ Governor Orr said the committee has achieved a very strong level of confidence that low and stable inflation is back within 1% and 3%, while he wants to see inflation expectations and pricing intentions continue to remain anchored.

DATA RECAP

• Singapore Non-Oil Exports MM (Jul) 12.2% vs. Exp. 2.2% (Prev. -0.4%)
• Singapore Non-Oil Exports YY (Jul) 15.7% vs. Exp. 1.2% (Prev. -8.7%)

GEOPOLITICAL

MIDDLE EAST

• US official said mediators concluded a 'constructive day' of discussions on Gaza ceasefire and talks are to continue on Friday, according to Reuters. It was separately reported that there is a high probability the Doha negotiations will continue until Saturday, according to Al Arabiya citing an Israeli official.
• Hamas official reiterated that any deal should achieve a complete ceasefire, complete withdrawal from Gaza, return of hostages, return of the displaced, and a hostage exchange deal, while the group said any negotiation must be based on a clear plan to implement what was agreed on previously.
• White House’s Kirby said the start of negotiations in Doha is an encouraging step to bridge the gaps in the agreement and they expect difficult negotiations on Gaza, while he added that Israel and Hamas must make concessions and work on the final details, according to Al Arabiya.
• US assessments are that Iran will not seek to disrupt ongoing cease-fire negotiations in Doha aimed at ending the Hamas-Israel war and technical talks could stretch into the weekend, but it is unclear how long Iran and its proxies may hold off, according to CBS.
• Israeli sources noted it is estimated that Hezbollah's retaliation could occur within days and Israel will be on maximum readiness for a response from Hezbollah this weekend, according to Sky News Arabia. It was separately reported that estimates in Tel Aviv are that Hezbollah is determined to attack Israel and will not wait for Iran, according to Alsharq News citing Israeli Channel 13.
• UK Foreign Minister Lammy is set to travel to Israel "in an attempt to prevent an all-out war in the Middle East", according to Sky News citing a diplomatic source.
• US CENTCOM said its forces “successfully destroyed one Iranian-backed Houthi ground control station in a Houthi-controlled area of Yemen” over the past 24 hours, according to Iran International.
• Iraq said the date of ending the US-led coalition's mission has been postponed due to the latest developments, according to the Foreign Ministry.

OTHER

• US President Biden's administration is reportedly “open” to sending long-range cruise missiles to Ukraine in "a move that would give Kyiv’s F-16s greater combat punch as it seeks to gain further momentum in its fight against Russia", according to Politico. Furthermore, an official said no final decision has been made on sending the missile, but the administration is working through the complicated details now.
• US Pentagon said Russia and Iran deepened their military partnership, according to Walla News' Elster.
• Russian President Putin's aide said the attack on Kursk was planned with the participation of NATO and Western intelligence, and Ukraine would not have attacked Kursk without US support, according to Al Arabiya
• North Korean leader Kim said in a message to Russian President Putin that Russia will be victorious in a "sacred war" for peace and justice, while he added that the two countries will promote building a multi-polarised new world, according to KCNA. Furthermore, Russian President Putin reaffirmed a commitment to implement a strategic partnership agreement, in a message to North Korean leader Kim.

EU/UK

NOTABLE HEADLINES

• EU's Vestager will not return for a third term as the EU's top antitrust official with the Danish government preparing to nominate a different candidate as their EU commissioner, according to FT.