• FOMC minutes stated that most officials saw "significant" upside risks to inflation and could require further tightening; account was otherwise balanced.
• APAC stocks mostly suffered another day of selling and followed suit to the losses on Wall St, participants also reflected on several weak data releases from the region.
• European equity futures are indicative of a lower open with the Euro Stoxx 50 -0.6% after the cash market closed down by 0.1% yesterday.
• DXY is steady around 103.50, EUR/USD is sub-1.0900, USD/JPY sits on a 146 handle, AUD lags post-jobs data.
• Looking ahead, highlights include US IJC, Philadelphia Fed Business Index, Norges Policy Announcement, Supply from France, Earnings from Walmart.

US TRADE

EQUITIES

• US stocks extended on their declines alongside weakness in bonds and commodities with stronger-than-expected industrial production data doing little to inspire a rebound. Attention was on the FOMC minutes which stated that most officials saw "significant" upside risks to inflation and could require further tightening, although the minutes were pretty balanced in tone and stale, while stocks then continued on their downtrend in the aftermath of the release.
• SPX -0.76% at 4,404, NDX -1.07% at 14,876, DJIA -0.52% at 34,766, RUT -1.28% at 1,872.
• Click here for a detailed summary.

FOMC MINUTES

• FOMC Minutes from the July meeting stated uncertainty of the US economic outlook remains elevated and future policy decisions are to be driven by the totality of data, while most officials saw "significant" upside risks to inflation which could require further tightening. The minutes also stated that a number of participants warned of risks of accidentally tightening policy too much and a couple of participants favoured holding interest rates steady at the July meeting. Furthermore, a number of participants saw economic risks becoming more balanced and Fed staff no longer expect the economy to enter a mild recession this year.

APAC TRADE

EQUITIES

• APAC stocks mostly suffered another day of selling and followed suit to the losses on Wall St as yields continued to edge higher after the FOMC Minutes noted most officials saw significant upside risks to inflation which could require further tightening, while participants also reflected on several weak data releases from the region.
• ASX 200 retreated as participants digested a slew of earnings releases and disappointing jobs data which showed a surprise contraction in the headline employment change and a larger-than-expected uptick in the unemployment rate.
• Nikkei 225 declined after soft data releases including the miss on machinery orders and although the declines in exports and imports weren’t as bad as feared, exports printed in contraction territory for the first time in 29 months.
• Hang Seng and Shanghai Comp were pressured at the open which saw the Hong Kong benchmark enter bear market territory after declining more than 20% from its January high amid earnings-related disappointment following results from Tencent and JD.com, although Chinese markets then recovered most of the earlier losses following another firm liquidity injection by the central bank and recent economic pledges by Premier Li.
• US equity futures were quiet after yesterday's declines although just about bounced off intraday lows.
• European equity futures are indicative of a lower open with the Euro Stoxx 50 -0.6% after the cash market closed down by 0.1% yesterday.

FX

• DXY remained firm in the aftermath of the FOMC minutes and recent activity data stateside including the better-than-expected Industrial Production data, while the risk-off mood also favoured the hard currency.
• EUR/USD languished below the 1.0900 handle after the single currency gave way to the buck’s strength.
• GBP/USD traded rangebound after partially retracing yesterday’s inflationary uplift.
• USD/JPY held on to recent spoils following its ascent to the north of 146.00 and above the levels where Japan’s MOF intervened last September.
• Antipodeans were pressured owing to the broad negative sentiment, recent declines in commodities complex and disappointing Australian jobs data.
• PBoC set USD/CNY mid-point at 7.2076 vs exp. 7.3047 (prev. 7.1986)
• China's major state-owned banks' branches were seen selling dollars to buy yuan in the offshore FX market during London and New York trading hours this week and were also seen selling dollars to buy yuan in the onshore FX market, according to sources cited by Reuters.
• RBI was likely selling dollars via state-run banks, according to traders cited by Reuters.

FIXED INCOME

• 10yr UST futures continued to decline in the aftermath of the FOMC Minutes where participants latched on to the hawkish aspects of what was otherwise a fairly balanced release.
• Bund futures were on the back foot alongside the rising global yield environment.
• 10yr JGB futures were pressured after a weak 20yr auction from Japan which saw weaker demand, lower accepted prices and the widest tail since 1987.

COMMODITIES

• Crude futures were despondent after the recent selling pressure owing to the risk-off sentiment and dollar strength but with some slight reprieve after WTI crude futures found a floor around the USD 79/bbl level.
• Spot gold languished below the USD 1900/oz level as the buck remained steadfast.
• Copper futures were subdued but off their lows amid the broad risk-averse mood.

CRYPTO

• Bitcoin remained lacklustre after it slipped beneath the USD 29,000 level yesterday.

NOTABLE ASIA-PAC HEADLINES

• China shadow banking Co. Zhongzhi plans a debt restructuring and hired KPMG, while it is seeking strategic investors, according to sources cited by Reuters.

DATA RECAP

• Japanese Trade Balance Total Yen (Jul) -78.7B vs. Exp. 24.6B (Prev. 43.0B)
• Japanese Exports YY (Jul) -0.3% vs. Exp. -0.8% (Prev. 1.5%)
• Japanese Imports YY (Jul) -13.5% vs. Exp. -14.7% (Prev. -12.9%)
• Japanese Machinery Orders MM (Jun) 2.7% vs. Exp. 3.6% (Prev. -7.6%)
• Japanese Machinery Orders YY (Jun) -5.8% vs. Exp. -5.5% (Prev. -8.7%)
• Singapore Non-Oil Exports MM (Jul) -3.4% vs. Exp. 1.0% (Prev. 5.4%)
• Singapore Non-Oil Exports YY (Jul) -20.2% vs. Exp. -14.4% (Prev. -15.5%)
• Australian Employment (Jul) -14.6k vs. Exp. 15.0k (Prev. 32.6k)
• Australian Unemployment Rate (Jul) 3.7% vs. Exp. 3.6% (Prev. 3.5%)
• Australian Participation Rate (Jul) 66.7% vs. Exp. 66.8% (Prev. 66.8%)

GEOPOLITICS

• US State Department urged Russia to return to the grain deal immediately and said the US is working with partners to identify other potential options to find corridors for Ukrainian grain.
• Russian Ambassador to the US said issues of prisoner swaps are being solved by relevant bodies of Russia and the US, while he added that this channel has proved to be effective, according to Reuter.
• South Korean lawmaker said there is a possibility for another spy satellite launch in North Korea between the end of August and early September, while there are signs that North Korea is preparing an ICBM launch, citing the spy agency.
• North Korea and Russia agreed to military cooperation during a recent meeting between North Korean leader Kim and Russia's Defence Minister, according to Yonhap.