• European bourses began the session mixed/flat and are yet to gain any real traction in relatively limited newsflow, Euro Stoxx 50 +0.5%.
• Stateside, performance is similar ahead of a few corporate updates, data and Fed speak, ES +0.1%
• WTI and Brent were bolstered by rhetoric from the Russian Defence Ministry re. Zaporizhia and as China's President Xi spoke
• Spot gold experienced a marginal haven bid while broader metals are more mixed.
• DXY lifted to near 107.00, EUR relatively resilient amid hawkish Schnabel commentary while NOK climbs post-Norges
• Core fixed have stabilised after initial pronounced pressure in Bunds on ECB rhetoric USTs essentially unchanged
• Looking ahead, highlights include US IJC, Philadelphia Fed, Existing Home Sales, New Zealand Trade Balance, CBRT Policy Announcement Speeches from Fed's George, Fed's Kashkari & ECB's Schnabel.

As of 11:15BST/06:15ET

LOOKING AHEAD

• US IJC, Philadelphia Fed, Existing Home Sales, New Zealand Trade Balance, CBRT Policy Announcement Speeches from Fed's George, Fed's Kashkari & ECB's Schnabel.
• Click here for the Week Ahead preview.

GEOPOLITICS

RUSSIA-UKRAINE

• US senior administration official said the US supports Ukraine conducting strikes on Russian-occupied Crimea if Kyiv deems it is necessary, according to Politico.
• Russia's Defence Ministry says Ukraine is preparing a 'provocation' at the Zaporizhzhia nuclear plant on August 19th. Subsequently, saying the Zaporizhia nuclear plant could be shut down if Ukraine continues shelling, via Ria and that back-up support systems at the nuclear site have been damaged by shelling activity. In the event of an accident at the plant, radioactive substances will cover Poland, Germany and Slovakia.
• Russian President Putin hinted he could meet with Ukrainian President Zelensky, via CNN Turk citing Russian sources; hint reportedly occurred at the August 5th Sochi summit, when Putin met Turkish President Erdogan.
• EU Foreign Ministers to discuss on August 31st possible visa code changes for a considerable reduction in the issuance of visa's to Russians, via Nexta.

TAIWAN

• US top diplomat for East Asia Kritenbrink said China overreacted and that several warships remain around Taiwan, while he expects China's pressure campaign around Taiwan to continue and said the US remains committed to the One China policy. Furthermore, he noted the US approach on Taiwan has remained consistent and that they do not support Taiwan's independence, but added that what has changed is Beijing's increasing coercion and that China's words and actions are deeply destabilising.
• US and Taiwan are to begin formal trade talks "early this fall, according to Bloomberg.

OTHER NEWS

• US and South Korea’s joint statement noted that their expanding military drills point to closer bilateral ties and said the next North Korean nuclear test could lead the US to deploy strategic assets to South Korea, according to SCMP.

EUROPEAN TRADE

CENTRAL BANKS

• ECB's Schnabel says a recession alone would not be enough to control inflation, growth is going to slow and a technical EZ recession is possible. Inflation concerns from before the July hike have not alleviated, outlook is unchanged. Number of indicators point to a de-anchoring of inflation expectations. Short-term inflation could still accelerate. Re. fragmentation: markets are more stable now, but volatility is elevated and liquidity is low.
• Norwegian Key Policy Rate 1.75% vs. Exp. 1.75% (Prev. 1.25%) via a unanimous decision; policy rate will most likely be raised further in September. Click here for reaction & newsquawk analysis.
• BoE will aim to unwind the full stock of Corporate Bond Purchase Scheme (CBPS) holdings at end-2023/early-2024, subject to market conditions.

EQUITIES

• European bourses began the session mixed/flat and are yet to gain any real traction in relatively limited newsflow, Euro Stoxx 50 +0.5%.
• Though, it is worth pointing out DAX 40 +1.0% outperformance, after lagging on Wednesday, amid strength in their heavyweight industry names.
• Stateside, performance is similar ahead of a few corporate updates, data and Fed speak, ES +0.1%
• Click here for more detail.

FX

• Buck bounces after brief post-FOMC minutes dip on dovish elements, DXY touches Fib at 106.960 from 106.500 low.
• Euro derives more support from rising EGB yields amidst hawkish ECB commentary, EUR/USD holds around 1.0150 amidst raft of option expiries extending beyond 1.0200.
• Norwegian Krona underpinned by another half point hike from Norges Bank and signal for further tightening in September, EUR/NOK towards base of 9.8550-9.9150 range.
• Aussie finds support at psychological level against Greenback after mixed jobs data, but Kiwi cautious ahead of NZ trade, AUD/USD nearer 0.6950 than 0.6900, NZD/USD closer to 0.6250 than 0.6300.
• Sterling still stunned by double digit UK CPI and economic ramifications, Cable ducks under 1.2000, albeit fractionally and briefly.
• Loonie gleans some traction from firmer oil prices pre-Canadian PPI, USD/CAD closer to 1.2900 than 1.2950.
• Yuan retreats amidst reports of property loan portfolio probes and PBoC LPR cuts, USD/CNY 6.7900+ and USD/CNH 6.8000+.
• Click herefor more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.0145-55 (1.61BN), 1.0165-75 (1.61BN), 1.0185 (265M), 1.0200-05 (1.81BN), 1.0215-25 (1.82BN)
• Click here for more detail.

FIXED INCOME

• EGBs and Gilts regain some poise after extended and heavy declines on hawkish ECB rhetoric.
• Bunds back up near 154.00 within 154.47-153.24 range, UK benchmark 114.00+ between 114.41-113.63 parameters.
• US Treasuries idling post-FOMC minutes and pre-busy agenda - 10 year T-note flat at 118.24+ vs 119-01+ high and 118-18 low.
• Click here for more detail.

COMMODITIES

• WTI and Brent were bolstered by rhetoric from the Russian Defence Ministry re. Zaporizhia and as China's President Xi spoke
• Currently, the benchmarks are in proximity to their respective highs of USD 89.56/bbl and USD 95.44/bbl.
• Spot gold experienced a marginal haven bid bringing the yellow metal to an incremental new session peak of USD 1767/oz and eclipsing the 21-DMA at USD 1764/oz.
• Broader metal space is mixed and features essentially unchanged action for Aluminium, after Wednesday’s noted rally, while LME Copper has climbed back towards a test of the USD 8k handle
• Click here for more detail.

NOTABLE DATA

• EU HICP Final YY (Jul) 8.9% vs. Exp. 8.9% (Prev. 8.9%); X F & E Final YY (Jul) 5.1% vs. Exp. 5.0% (Prev. 5.0%)
• X F, E, A & T Final YY (Jul) 4.0% vs. Exp. 4.0% (Prev. 4.0%)

APAC TRADE

• APAC stocks mostly declined following the weak handover from global counterparts which were pressured as yields climbed on the back of the red-hot UK inflation data and with only a brief reprieve seen after the FOMC Minutes noted many officials saw a risk the Fed could tighten more than necessary.
• ASX 200 was subdued as participants digested the latest influx of earnings releases and disappointing jobs data which showed a surprise contraction in headline Employment Change.
• Nikkei 225 slipped back beneath the 29,000 level in tandem with the overall downbeat sentiment.
• Hang Seng and Shanghai Comp conformed to the glum mood after both Goldman Sachs and Nomura cut their China GDP growth forecasts and with focus also on earnings releases including Tencent after it posted its first-ever decline in quarterly revenue although its shares were lifted and it had vowed a return to growth, while Country Garden led the declines after the developer issued a profit warning of as much as an 87% drop in H1 net.

NOTABLE APAC HEADLINES

• China may issue CNY 1.5tln in additional debt as part of an investment push, according to China Securities News.
• China's COVID-19 cases rose to a 3-month high of 3,424 on Wednesday from 2,888 the day before.
  • Nomura cut its China 2022 GDP growth forecast to 2.8% from 3.3%.
  • China's MOFCOM says, re. US CHIPS act, some provisions restrict normal economic, trade and investment activities of relevant enterprises in China. Will, when necessary, take forceful measures to safeguard interests.
  • China's President Xi says they will persist with opening up the economy, via CCTV.
  • China's banking regulator is reportedly looking into the property sector loan portfolios of some local/foreign lenders to assess systemic risk, via Reuters citing sources.

DATA RECAP

• Australian Employment (Jul) -40.9k vs. Exp. 25.0k (Prev. 88.4k); Full-Time Employment (Jul) -86.9k (Prev. 52.9k)
• Australian Unemployment Rate (Jul) 3.4% vs. Exp. 3.5% (Prev. 3.5%); Participation Rate (Jul) 66.4% vs. Exp. 66.8% (Prev. 66.8%)