• Russian Kremlin's Ushakov says Alaska summit will begin at 11:30 local time on Friday (20:30 BST/15:30 EDT)
• European bourses are modestly firmer, US futures hold around the unchanged mark into PPI.
• USD sell-off pauses for breath ahead of PPI, Yen rises on Bessent BoJ comments.
• JGBs lag as Japan reacts to Bessent, USTs await PPI.
• Crude ekes mild gains as attention turns to Trump/Putin.
• Looking ahead, US PPI (Jul), Jobless Claims, Speakers include Fed’s Barkin. Earnings from Applied Materials.

TARIFFS/TRADE

• Brazil’s Vice President said the government will extend the programme that returns part of the exported value to all companies that ship to the US and will extend the deadline for exporters to defer tax payments under the drawback scheme for one year, while the plan will also include government purchases.
• US Secretary of State Rubio said the State Department took steps to revoke visas and impose visa restrictions on several Brazilian government officials.
• China and India are in talks to resume border trade after a five-year pause, according to Bloomberg.

EUROPEAN TRADE

EQUITIES

• European bourses (STOXX 600 +0.3%) opened flat/modestly higher, but sentiment gradually improved as the session progressed to display a positive picture in Europe. Nothing really behind the upside today, but building on two prior days of strength (for the STOXX 600).
• European sectors opened mixed but now hold a slight positive bias. Insurance takes the top spot and is the clear outperformer in Europe today; Swiss Re (+2.6%) benefits after posting strong H1 results and confirming its FY guidance. Also, booting sentiment is post-earnings upside in Admiral (+5%) and Aviva (+4%), which both reported a beat on op. profit.
• US Equity Futures are unchanged following a session of gains on Wednesday. The likely driver for stocks today will be US PPI data, which will be closely monitored for items that feed into the Fed’s preferred inflation gauge: PCE. Also on the docket is weekly jobless claims, expected to rise from 226k to 228k.
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FX

• DXY is a little firmer. After two sessions of losses, which have been driven by markets ramping up bets on Fed rate cuts, the DXY is attempting to bounce off its recent lows. There isn't an obvious reason for the upside and as such, it may be more technical in nature. On Fed speak, Daly spoke with the WSJ where she pushed back on the notion of a 50bps move, saying that she does not see the need to catch up. Price data will reassert itself today on the macro narrative with PPI metrics due on deck, which will help formulate expectations for the PCE release later in the month. DXY has recovered to 97.94 but still shy of Wednesday's best at 98.13.
• EUR is a touch softer vs. the broadly firmer USD with EUR/USD slipping back onto a 1.16 handle after topping out on Wednesday at 1.1730; highest since late July. No real move to EZ GDP Flash Estimate / Employment for Q2. EUR/USD has delved as low as 1.1674 and is currently holding above Wednesday's trough at 1.1669.
• JPY is the clear outlier across the majors with the Yen firmly at the top of the leaderboard. The outperformance is being pinned on Wednesday's comments by US Treasury Secretary Bessent who remarked that the BoJ is behind the curve on inflation and is likely to hike interest rates soon. This allied with the increased pace of rate cut bets in the US has brought interest rate differentials between the US and Japan into greater focus and dragged USD/JPY to a fresh low for the month at 146.22, briefly slipping below its 200DMA at 146.40. Markets price 15bps of tightening from the BoJ by year-end.
• GBP is proving to be more resilient than most peers (ex-JPY) with the pound benefitting from a better-than-expected outturn for UK GDP. M/M growth for June rose to 0.4% from -0.1% (Exp. 0.1%), leaving the Q/Q Q2 print at 0.3% vs. prev. 0.7% (Exp. 0.1%). The upside was driven in large part by government consumption, as opined by ING and therefore may be deemed by some as not showing "high quality" growth. Cable has advanced further on a 1.35 handle with a current session high at 1.3591 and focus on a test of 1.36; not breached since 10th July.
• After two sessions of gains vs. the USD, both of the antipodes are softer vs. the broadly firmer dollar. A choppy reaction was seen for AUD after the latest Australian jobs data showed Employment Change slightly missed forecasts but was solely fuelled by an increase in full-time work and the Unemployment Rate fell to 4.2% from 4.3%, as expected.
• PBoC set USD/CNY mid-point at 7.1337 vs exp. 7.1743 (Prev. 7.1350)
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FIXED INCOME

• JGBs are lower. Market pricing has seen a hawkish shift overnight, with just over 16bps of tightening now implied by end-2025 vs around 14bps on Wednesday. A move that was spurred by a general hawkish shift in the JPY and JGBs overnight. Despite the interview with US Treasury Secretary Bessent occurring on BBG at midday on Wednesday, his comment that the BoJ was likely “behind the curve” and will probably need to hike again has been attributed to the overnight price action.
• USTs are firmer, but only modestly so. Digesting the geopolitical updates from the Trump meeting with European leaders and Ukraine yesterday. At the time, the tone was a constructive one from this. Since, that has been corroborated and expanded on by a Politico sources piece. Drivers since a little light with focus more on moves in JGBs and developments elsewhere. As it stands, USTs are at the top-end of a narrow 112-05 to 112-12 band. Given this, yields are lower with the long-end leading slightly, but the flattening is modest in nature as it stands. Ahead, aside from potential geopolitical updates, we keenly await the PPI report to add detail post-CPI into PCE models. Note, Fed’s Daly (2027 Voter) speaking with the WSJ has pushed back on the notion of a 50bps move, saying that she does not see the need to catch up.
• Gilts began the day essentially flat, before picking up a handful of ticks to a 92.13 peak. Stronger-than-expected GDP data spurred a kneejerk bearish-bias. With pressure seen in Gilts as the data provides the hawkish contingent at the BoE with more time to scrutinise the development of inflation in the months ahead. On the flip side, the data is very welcome by Chancellor Reeves as stronger growth performance trims the size of the “black hole” that Reeves will need to deal with in October, a development that is welcome by the Gilt market and thus provided a bearish driver into the open.
• Bunds are in-fitting with USTs, in a 129.71 to 130.06 band, lifting gradually across the morning. Specifics have been very light for the space this morning, focused on digesting the discussed geopolitical talks and particularly the reason for European optimism (since explained by Politico).
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COMMODITIES

• Modestly firmer trade across the crude complex despite a stronger dollar and mixed risk sentiment, with oil traders' sights firmly set on the summit between US President Trump and Russian President Putin tomorrow. The meeting itself has been repeatedly downplayed, with President Trump suggesting there is a good chance of a second meeting and he would like to do a second meeting almost immediately which would include Zelensky if the first meeting goes okay, but there may not be a second meeting if he feels it is inappropriate or if he does not get the answers he wants. WTI currently resides in a 62.70-63.09/bbl range while Brent sits in a USD 65.74-66.08/bbl range.
• Mostly softer trade across precious metals against the backdrop of a firmer dollar intraday and with macro newsflow quiet ahead of the US day. Spot gold resides in a USD 3,341.45-3,374.80/oz range, wider than Wednesday's USD 3,342.62-3,370.82/oz parameter and on either side of the 50 DMA at USD 3,348.91/oz.
• Copper futures pulled back from overnight highs and now sits with mild losses amid the firmer dollar and mixed risk environment, with the broader base metals sector reflective of the indecision. 3M LME copper prices reside towards the bottom end of a USD 9,757.10-9,838.70/t range.
• Chile's Codelco said the El Teniente accident caused a loss of 20,000 to 30,000 metric tons of copper, equivalent to USD 300mln, while it later stated that the El Teniente smelter is to restart on Thursday.
• Indian oil name BPCL executive says they are tapping alternative oil supplies amid a lower discount on Russian oil sales, discounts have declined to USD 1.50/bbl. Purchased oil from Brazil, West Africa and the US to replace some of the Russian oil.
• Bank of America projects an average 890k BPD surplus of crude in the 12-month period from July 2025.
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NOTABLE DATA RECAP

• UK GDP Estimate MM (Jun) 0.4% vs. Exp. 0.1% (Prev. -0.1%)
• UK GDP Prelim YY (Q2) 1.2% vs. Exp. 1.0% (Prev. 1.3%); GDP Prelim QQ (Q2) 0.3% vs. Exp. 0.1% (Prev. 0.7%)
• UK GDP Estimate 3M/3M (Jun) 0.3% vs. Exp. 0.1% (Prev. 0.5%, Rev. 0.6%)
• UK GDP Estimate YY (Jun) 1.4% (Prev. 0.7%, Rev. 0.9%)
• UK Services MM (Jun) 0.3% (Prev. 0.1%); Services YY (Jun) 1.5% (Prev. 0.8%, Rev. 1.0%)
• UK Industrial Output YY (Jun) 0.2% vs. Exp. -0.3% (Prev. -0.3%, Rev. -0.2%); Industrial Output MM (Jun) 0.7% vs. Exp. 0.2% (Prev. -0.9%, Rev. -1.3%)
• UK RICS Housing Survey (Jul) -13.0 vs. Exp. -5.0 (Prev. -7.0)
• French CPI (EU Norm) Final YY (Jul) 0.9% vs. Exp. 0.9% (Prev. 0.9%); MM (Jul) 0.3% vs. Exp. 0.3% (Prev. 0.3%)
• EU Industrial Production YY (Jun) 0.2% vs. Exp. 1.7% (Prev. 3.7%, Rev. 3.1%); Industrial Production MM (Jun) -1.3% vs. Exp. -1.0% (Prev. 1.7%, Rev. 1.1%)
• EU GDP Flash Estimate YY (Q2) 1.4% vs. Exp. 1.4% (Prev. 1.4%); Flash Estimate QQ (Q2) 0.1% vs. Exp. 0.1% (Prev. 0.1%)

NOTABLE EUROPEAN HEADLINES

• Norwegian Key Policy Rate 4.25% vs. Exp. 4.25% (Prev. 4.25%); The Committee judges that a restrictive monetary policy is still needed but that it will likely be appropriate to continue with a cautious normalisation of the policy rate ahead. Click for details

NOTABLE US HEADLINES

• US President Trump signed a pharma Executive Order to fill the Strategic Active Pharmaceutical Ingredients Reserve with critical drug components and signed a space industry related Executive Order, while the White House also announced a revocation of the 2021 Executive Order on competition.
• Fed's Daly (2027 voter) says large rate cut next month does not seem warranted, via WSJ; She adds that a 50bps could send off an urgency signal; Daly prefers moving gradually to a more neutral setting "over the next year or so." Daly said she had stopped describing the labour market as solid after the July payrolls report. "Policy is likely to be too restrictive for where the economy is headed. So for me, that calls for recalibration", Daly said. Daly said that's still reasonable but cuts at all three remaining meetings this year could be appropriate "if we saw more signs that the labour market was more precarious.". Daly added that fewer cuts would be warranted if there were signs of serious strength in inflation. Daly added that businesses have found ways to absorb tariff costs as opposed to passing them to consumers.

GEOPOLITICS

• North Korea said it will not sit down with the US and sees no point in South Korea and the US adjusting joint military drills. It was also reported that North Korean leader Kim's sister said North Korea has not removed propaganda loudspeakers and has no intention to do so, while the South Korean military said it stands by its previous announcement that North Korea had dismantled propaganda loudspeakers at some points on the border.
• Russian Kremlin's Ushakov says Alaska summit will begin at 11:30 local time on Friday (20:30 BST/15:30 EDT). Russian President Putin and US President Trump to have a one-on-one meeting with translators; also to have a wider meeting with delegations; central topic is Ukraine. Trump and Putin to give a joint press conference at the end of the summit. Sensitive matters to be discussed. To discuss trade and economic cooperation where there is "huge untapped potential". Delegation to include Lavrov, Ushakov, Belousov, Siluanov and Dmitriev
• Russia's Special Envoy and head of Sovereign Wealth Fund Kirill Dmitriev will participate in the US President Trump-Russian President Putin meeting on Friday, according to Reuters sources.
• Russian Finance Minister Siluanov will participate in Trump-Putin summit on Friday, according to RBC citing two sources; Defence Minister Belousov will also attend
• "Russian officials: Ukrainian drones cause fires in two Russian regions and ignite oil refinery", according to Sky News Arabia.
• Israeli Finance Minister Smotrich says "[Israeli PM] Netanyahu supports settlement expansion and the imposition of sovereignty over the West Bank".
• Houthis says they bombed Ben Gurion airport in Tel Aviv, Israel, with a hypersonic ballistic missile, according to Al Qahera News.

CRYPTO

• Bitcoin is a little firmer today and trades just shy of USD 122k; Ethereum continues to outperform a touch, now above USD 4.7k, setting its sights on its ATH just under the 5k mark.

APAC TRADE

• APAC stocks were ultimately mixed despite the positive handover from Wall St, where the major indices extended on gains amid Fed rate cut hopes as money markets fully priced in a September rate cut.
• ASX 200 extended on record highs with utilities and financials leading the advances following earnings releases from the likes of Origin Energy and Westpac.
• Nikkei 225 pulled back from record highs and returned to beneath the 43,000 level with pressure seen amid profit taking, higher yields and a firmer currency.
• Hang Seng and Shanghai Comp were initially supported with earnings releases in focus including a jump in profits for Tencent Holdings, although gains were capped following weaker-than-expected loans and aggregate financing data from China which showed New Loans contracted for the first time since 2005.

NOTABLE ASIA-PAC HEADLINES

• South Korea is to extend fuel tax cuts by two months through to October 31st and it is to announce a restructuring plan for the country's struggling petrochemical sector.
• DeepSeek delayed the release of its new AI model, R2, after encountering persistent technical issues during the training process which used Huawei chips, via FT citing sources.
• Foxconn (2317 TT) expects Q3 revenue to see significant growth Y/Y (prev. significant growth). Q3 Revenue Guide: AI Server growth of over 170% Y/Y. Components and other products: significant growth Y/Y (prev. grow strongly). Cloud & Networking: strong growth Y/Y (prev. strong growth). AI market to continue strong demand in 2026.
• China is reportedly mulling asking firms run by central government to purchase homes, according to Bloomberg.
• S&P upgrades India to "BBB" from "BBB-"; outlook stable.
• JD.com (9618 HK) Q2 2025 (CNY): adj. EPS 4.97 (exp. 3.301), Revenue 356.7bln (exp. 335.6bln)

DATA RECAP

• Australian Employment (Jul) 24.5k vs. Exp. 25.0k (Prev. 2.0k, Rev. 1.0k)
• Australian Full Time Employment (Jul) 60.5k (Prev. -38.2k)
• Australian Unemployment Rate (Jul) 4.2% vs. Exp. 4.2% (Prev. 4.3%)
• Australian Participation Rate (Jul) 67.0% vs. Exp. 67.1% (Prev. 67.1%)