• APAC stocks gained as the region took impetus from the post-CPI tech-led rebound stateside.
• DXY traded little changed, JPY saw brief support from hawkish comments from BoJ’s Tamura; EUR awaits the ECB.
• Goldman Sachs CEO Solomon said he sees 2 or maybe 3 Fed rate cuts, while he added that they could see the possibility of a 50bps cut but his base case is for a cut of 25bps, according to a CNBC interview.
• European equity futures are indicative of a positive cash open with the Euro Stoxx 50 future +1.3% after the cash market closed higher by 0.4% on Wednesday.
• Looking ahead, highlights include Swedish CPI, Spanish HICP (F), US IJC, PPI (F), ECB Policy Announcement and Press Conference, Norges Bank Regional Network (Q3), IEA OMR, Supply from Italy & US, Earnings from Lennar, Adobe & Kroger.

SNAPSHOT

• Click for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks eventually strengthened in a reversal of post-CPI moves with outperformance in the tech-heavy NDX which was buoyed by strength in mega-cap tech names including Nvidia (NVDA)(+8%), while sectors were ultimately mixed with underperformance in Energy (-0.93%) and Consumer Staples (-0.88%). Nonetheless, it was a choppy day overall for markets as participants digested the US CPI which printed mixed but with attention on the hotter-than-expected core M/M print.
• SPX +1.07% at 5,554, NDX +2.17% at 19,237, DJIA +0.31% at 40,862, RUT +0.31% at 2,104.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed’s Office of Inspector General released a report on Atlanta Fed President Bostic’s (2024 Voter) financial disclosures in which it stated that Bostic violated Fed rules on trading and created an appearance of acting on confidential information, as well as created the appearance of a conflict of interest. However, it didn’t find evidence that Bostic traded on confidential information.
• Goldman Sachs CEO Solomon said he sees 2 or maybe 3 Fed rate cuts, while he added that they could see the possibility of a 50bps cut but his base case is for a cut of 25bps, according to a CNBC interview.

APAC TRADE

EQUITIES

• APAC stocks gained as the region took impetus from the post-CPI tech-led rebound stateside.
• ASX 200 advanced with strength in the tech and the energy sectors making up for the slack in mining stocks.
• Nikkei 225 outperformed on the back of recent currency weakness and softer Japanese PPI data.
• Hang Seng and Shanghai Comp were mixed as the former benefitted from the broad risk-on mood and with tech stocks inspired by their global peers, while the mainland lagged behind regional counterparts in the absence of any major pertinent drivers and amid protectionist policies with China said to have asked its carmakers to keep key EV technology at home.
• US equity futures took a breather following the recent price fluctuations.
• European equity futures are indicative of a positive cash open with the Euro Stoxx 50 future +1.3% after the cash market closed higher by 0.4% on Wednesday.

FX

• DXY traded little changed after yesterday's two-way price action and eventual recovery owing to the mixed CPI data whereby the firmer-than-expected Core MM print took precedence and resulted in a further winding down of bets for a 50bp cut next week.
• EUR/USD lacked commitment after yesterday's intraday pullback and as participants await a widely expected ECB rate cut.
• GBP/USD remained uninspired after its recent retreat to below the 1.3100 handle in the aftermath of the US CPI print.
• USD/JPY continued the prior day's rebound but was off best levels and stalled just shy of 143.00 as participants reflected on the hawkish comments from BoJ Board Member Tamura who said they must raise short-term rates in several stages.
• Antipodeans remained afloat amid the mostly positive risk tone but with price action uneventful amid a quiet calendar.

FIXED INCOME

• 10yr UST futures marginally softened following the prior day's whipsawing and curve flattening as participants digested VP Harris's perceived win in the Presidential Debate, a hotter core CPI M/M print and a very strong 10yr auction.
• Bund futures pulled back from recent highs but just about held on to the 135.00 status amid expectations of an ECB cut.
• 10yr JGB futures followed suit to the lacklustre mood across global counterparts with prices not helped by hawkish comments from BoJ's Tamura, while the slightly improved results from this month's 20yr JGB auction did little to spur prices.

COMMODITIES

• Crude futures edged mild gains after yesterday's choppy mood and amid the risk on mood and Gulf of Mexico shut-ins.
• NHC announced that Francine became a category 2 hurricane as the eye approaches the Louisiana coast, with a life-threatening storm surge and hurricane conditions spreading onto the Louisiana coast.
• 39% of oil production and 49% of natgas production in the US Gulf of Mexico is shut, due to Hurricane Francine.
• Spot gold lacked firm direction after sliding post-CPI data, but with the downside cushioned by support near USD 2,500/oz.
• Copper futures were underpinned alongside the mostly constructive mood across the Asia-Pac region.
• Chile's Codelco reached an early contract agreement with El Teniente union.

CRYPTO

• Bitcoin steadily gained throughout the session to above USD 58,000 amid the positive risk appetite.

NOTABLE ASIA-PAC HEADLINES

• BoJ's Tamura said Japan's neutral rate is likely to be around 1% at the minimum and the path toward ending easy policy is still very long, while he added they will carefully scrutinise the balance of pros and cons in exiting easy policy and must push up short-term rates at least to around 1% by the latter half of their long-term forecast period through fiscal 2026, to stably achieve the 2% inflation target. Furthermore, Tamura said the pace at which markets expect the BoJ to hike rates is very slow and hiking at such a pace could further heighten upward inflation risk, as well as noted that the likelihood of Japan sustainably achieving the BoJ's price target is heightening further.
• China asked its carmakers to keep key EV technology at home, according to Bloomberg.

DATA RECAP

• Japanese Corp Goods Price MM (Aug) -0.2% vs Exp. 0.0% (Prev. 0.3%)
• Japanese Corp Goods Price YY (Aug) 2.5% vs. Exp. 2.8% (Prev. 3.0%)

GEOPOLITICS

MIDDLE EAST

• Hamas said its negotiation team met Qatar's PM and Egypt's intelligence chief in Doha on Wednesday to discuss the latest Gaza developments. Furthermore, it reiterated its readiness to implement an 'immediate' ceasefire based on the US's previous proposal without accepting new conditions from any party.
• Palestinian draft resolution at the United Nations demands that Israel end its illegal presence in the occupied territories and called for the establishment of a mechanism to compensate for the damage committed by Israel in the occupied territory, while the draft resolution is expected to be voted on on September 18th during the 10th session of the General Assembly, according to Al Jazeera.

OTHER

• White House is finalising plans to expand where Ukraine can strike inside of Russia, according to POLITICO.
• North Korea fired a suspected ballistic missile which fell shortly after outside of Japan’s Exclusive Economic Zone, while the South Korean military later announced that North Korea fired multiple short-range ballistic missiles.
• Top Chinese general is to visit the US Indo-Pacific Command in Hawaii next week as the two militaries step up engagement, according to FT.

EU/UK

NOTABLE HEADLINES

• UK Treasury refused to disclose key details of the GBP 22bln fiscal black hole that Chancellor Reeves claimed to have discovered, following a freedom of information request by the FT.
• Brussels explores Draghi option of extending up to EUR 350bln in EU debt as officials examine ways to roll over hundreds of billions of Covid-era bonds to avoid the common budget from being underwhelmed by repayment costs, according to FT.

DATA RECAP

• UK RICS Housing Survey (Aug) 1.0 vs. Exp. -14.0 (Prev. -19.0, Rev. -18.0)