• Equity bourses are firmer with the general risk tone constructive pre-FOMC
• USD continues to wane and nears 103.00 to the modest benefit of peers, Antipodeans lead G10s
• GBP is firmer post-GDP while EUR/USD is drawn to hefty 1.08 expiries
• USTs bid before the Fed, Bunds slip after soft issuance and Gilts attempt to recoup from recent pressure
• Crude consolidation continues, metals are mixed with fresh drivers limited
• Looking ahead, highlights include US PPI. FOMC Policy Announcement & Fed Chair Powell's Press Conference.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer across the board, Euro Stoxx 50 +0.7%, having shrugged off the tepid open after a busy stock-specific pre-market though fresh macro drivers remain light.
• Sectors are similarly supported with Real Estate leading after marked UK-related pressure on Tuesday while Autos and Banks benefit from a Barclays note and yields/BBVA's ATI sale respectively.
• Travel & Leisure bucks the trend after a downbeat update from Entain.
• Stateside, futures are edging higher and moving in tandem with the above as the ES attains a firmer hold above 4400 pre-FOMC; newsquawk preview available here.
• EU Antitrust Chief Vestager to hold a news conference at 11:45BST/06:45ET, expected to be on Alphabet's (GOOGL) Google.
• Shell (SHEL LN) announces a 15% dividend/shr increase from Q2 2023; Capital Spending reduced to USD 22-25bln/year for 2024 & 2025; Buybacks of at least USD 5.5bln for H2 2023.
• Airbus (AIR FP) raises 20 year delivery forecast to 40.85k (prev. 39.45k); sees 17.1k aircraft replacements in the next 20 years (prev. 15.4k).
• Click here and here for a recap of the main European updates.
• Click here for more detail.

FX

• Buck on the backfoot approaching Fed, with DXY heavy on the 103.000 handle awaiting guidance after a widely expected FOMC pause.
• Kiwi underpinned around 0.6150 vs Greenback and 1.1000 against Aussie after better than expected NZ current account data, AUD/USD relatively bid near 0.6800 with support via strength in iron ore.
• Sterling retains 1.2600+ status vs Dollar as UK GDP matches consensus and Euro probes 1.0800 where mega option expiry interest resides.
• Yen takes advantage of softer US Treasury yields to rebound through 140.00.
• Lira regains poise as Turkish President gives new Finance Minister and CBRT Governor go ahead to revert to orthodox policies ahead of next week's CBRT.
• PBoC set USD/CNY mid-point at 7.1566 vs exp. 7.1550 (prev. 7.1498)
• Click here for notable OpEx for the NY Cut.
• Click here for more detail.

FIXED INCOME

• US Treasuries retain bid ahead of PPI data and FOMC as T-note hovers closer to top of tight 113-00/112-24 range.
• Bunds remain heavy between 133.71-33 parameters after less than rousing finale for German 2033 benchmark.
• Gilts claw back post-UK labour data losses within 94.65-21 bounds as monthly GDP metrics match consensus.
• Click here for more detail.

COMMODITIES

• Crude continues to consolidate with WTI Jul’23 and Brent Aug’23 inching above the USD 70.00/bbl and USD 75.00/bbl handles, specific drivers light.
• Spot gold is incrementally firmer and at the top-end of the sessions range which is yet to see it gain any real traction above the USD 1950/oz mark as the broader risk tone remains robust and serves to offset any USD-driven upside.
• Base metals are somewhat mixed, though this is seemingly more a function of yesterday’s pronounced gains for the complex earlier in the week.
• US Energy Inventory Data (bbls): Crude +1.0mln (exp. -0.5mln), Gasoline +2.1mln (exp. +0.3mln), Distillate +1.4mln (exp. +1.2mln), Cushing +1.5mln.
• IEA Monthly Oil Market Report: oil demand is set to increase by 2.4mln BPD in 2023 to a record of 102.3mln BPD (vs. May view of 102mln BPD). Click here for more.
• Click here for more detail.

CRYPTO

• Binance and SEC are reportedly not far apart on a deal to avoid a full asset freeze, according to Bloomberg.
• Binance CEO Zhao denies rumours of selling Bitcoin to bolster BNB, according to Cointelegraph.

NOTABLE EUROPEAN HEADLINES

• Turkish President Erdogan says he has accepted steps that the CBRT and Finance Minister Simsek will take. Click here for more detail & newsquawk analysis/reaction.
• French Finance Minister Le Maire vowed to put France's finances back on track with spending cuts, according to FT.
• Downing Street has ordered banks to protect struggling homeowners from increasing mortgage costs as markets speculate over the possibility of the Bank Rate rising to as high as 6%, according to The Telegraph.
• German Economy Ministry says economic data points to moderate recovery over further course of the year; "economic recession" in sense of more sustained downturn is not currently expected

NOTABLE EUROPEAN DATA

• UK GDP Estimate MM (Apr) 0.2% vs. Exp. 0.20% (Prev. -0.30%); YY (Apr) 0.5% vs. Exp. 0.50% (Prev. 0.30%)
• UK Services YY (Apr) 0.7% vs. Exp. 0.60% (Prev. 0.40%); MM (Apr) 0.3% vs. Exp. 0.30% (Prev. -0.50%)
• UK Goods Trade Balance GBP* (Apr) -14.996B GB vs Exp. -16.5bln (Prev. -16.356B GB, Rev. -16.356B GB)
• Swedish CPIF Ex Energy YY (May) 8.2% vs. Exp. 7.80% (Prev. 8.40%); MM (May) 0.7% vs. Exp. 0.40% (Prev. 0.40%)

GEOPOLITICS

• Russia urged for a transparent investigation into the Nord Stream blasts after reports that the US warned Ukraine not to attack Nord Stream, according to Reuters.
• White House said US President Biden met with the NATO chief and they underscored their shared desire to welcome Sweden to the alliance ASAP, while they also discussed the need for allies to build on the 2014 Wales summit defence investment pledge.
• German National Security Strategy Document says China remains a partner without which cannot solve the many global challenges; China is increasingly pressuring regional stability and disrespecting human rights. Germany aims to spend 2% of GDP on defence on average over several years.
• UN Nuclear Chief to visit Zaporizhzhia nuclear power plant on Thursday, one day later than planned, according to IFAX citing an official.
• Turkish President Erdogan says constitutional amendments in Sweden are not enough to address Turkey's concerns, the police should not allow such protests; adds, Sweden should not expect "anything different" from Turkey at the Nato summit.

APAC TRADE

• APAC stocks were somewhat mixed with the region's bourses mostly tentative ahead of the FOMC policy announcement.
• ASX 200 was led by strength in the commodity-related sectors after China’s support pledges and PBoC cuts.
• Nikkei 225 extended its advances as automakers and other exporters benefitted from recent currency moves and amid broad consensus for the BoJ to maintain its ultra-easy policy later this week
• Hang Seng and Shanghai Comp. were kept afloat after the PBoC cut rates for its Standing Lending Facility by 10bps and the NDRC issued a notice on lowering costs this year with VAT to be exempted and reduced for small businesses until year-end. China was also said to be weighing broad stimulus with property support and rate cuts, although the gains in Chinese stocks were limited amid ongoing growth concerns and following softer-than-expected loans and financing data.

NOTABLE ASIA-PAC HEADLINES

• Chinese Foreign Minister Qin Gang held a call with US Secretary of State Blinken and said the US should stop interfering with China's internal affairs and should respect China's concerns such as the Taiwan issue, while he added the US should stop hurting China under the excuse of competition and hopes the US will meet China halfway, effectively manage differences and promote communication and cooperation, according to state media.
• Japanese PM Kishida is reportedly considering dissolving the Lower House of Parliament on the same day if the opposition submits a no-confidence vote on Friday, according to Fuji TV.

DATA RECAP

• New Zealand Current Account (Q1) -5.2B vs. Exp. -6.8B (Prev. -9.5B); Current Account/GDP (Q1) -8.5% vs. Exp. -9.0% (Prev. -8.9%)