Europe set for stronger open after well received NVIDIA guidance - Newsquawk EU Market Open

• NVIDIA (NVDA) shares rose almost 5% after beating on top and bottom lines, whilst the CEO said they are seeing demand acceleration and expect revenues to grow about 70% in fiscal 2028.
• Crude futures mildly declined following recent indecisive performance amid mixed geopolitical updates.
• Oman reportedly stopped cooperating with the US to facilitate escorted tanker movements through southern Hormuz, according to Press TV.
• APAC stocks were ultimately mixed, but with most indices in the green, after the flat performance stateside, whilst US equity futures were lifted on NVDA.
• European equity futures indicate a higher cash market open with Euro Stoxx 50 futures up 0.4%.
• Looking ahead, highlights include German GfK Consumer Confidence (Sep), US Jobless Claims (Aug/22). Fed Jackson Hole Symposium (27th-29th), ECB Minutes (Jul). Supply from the US, Earnings from Marvell & Pernod Ricard.

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LOOKING AHEAD

• Highlights include German GfK Consumer Confidence (Sep), US Jobless Claims (Aug/22). Fed Jackson Hole Symposium (27th-29th), ECB Minutes (Jul). Supply from the US, Earnings from Marvell & Pernod Ricard.
• Click for the Newsquawk Week Ahead.

IRAN CONFLICT

• US President Trump posted an AI image of himself in front of former Iranian Supreme Leader Khamenei with the caption "mission accomplished".
• US Energy Secretary said Washington favours a diplomatic dialogue with Iran.
• US reportedly made some progress clearing sea mines in international waters, however an Iranian estimate suggested 80-150 mines it deployed remain uncleared.
• US considers reviving the "War-Spoils" court in order to claim Iranian oil, according to reports.
• Iranian Foreign Minister Araghchi urged the UN and member states to reject US economic terrorism and called the US a rogue state, according to Press TV.
• Oman reportedly stopped cooperating with the US to facilitate escorted tanker movements through southern Hormuz, according to Press TV.
• A Kuwaiti tanker was said to have been struck in the Strait of Hormuz, according to EOS Risk Group's Kelly.
• Two explosions were reported in Mokha, Yemen, from missiles fired by the Houthis.
• Yemen's Coast Guard seized boats carrying drone-making equipment.
• Israel has been accused of using banned phosphorus shells in Lebanon, according to IRNA.

US TRADE

EQUITIES

• US stocks traded little changed heading into NVDA earnings after the close, with sectors mixed as Industrials, Tech, and Utilities led the gains, while Healthcare and Communications underperformed. For comms, slight weakness in Alphabet was enough to offset the gains in Meta following the latter's settlement in the US case on social media harm to children, which helps clear some of the uncertainty overhang (to pay a max of USD 16.68bln). There were several releases, with the dollar and US yields rising on the day in response to the PCE report, in which the core readings matched expectations, but the headline printed slightly above forecasts at 0.2% M/M (exp. 0.1%) and 3.7% Y/Y (exp. 3.6%). Despite the rise in US 2yr yields, money market bets on Fed policy were little changed for the September meeting, still pricing a 60% chance of a hold. Meanwhile, US GDP was unrevised at 1.5% in Q2 on the second estimate, with increases seen in consumer spending, exports, and investment; durable goods beat in July, supporting the theme of solid investment.
• SPX -0.02% at 7,676, NDX +0.05% at 29,225, DJI -0.21% at 53,469, RUT -0.14% at 3,006.
• Click here for a detailed summary.

TARIFFS/TRADE

• USTR Greer said the US did not add any new demands at the end of the negotiations with Canada and that the US wanted mutual protection on things like steel and aluminium in trade talks with Canada. Greer also stated that the US won't just sit down and take it if Canada imposes more retaliation, as well as noted there are no open channels with Canada at the moment.
• US is investigating Apex Logistics over AI chip smuggling to China.
• China's Foreign Minister Wang Yi met with the US Ambassador to China in Beijing and said China-US ties still encounter multiple risks and challenges, while he also stated that both sides should effectively manage differences, eliminate interference and resolve hurdles to high-level talks.
• US and South Korea are working to resolve differences related to the terms of the previously disclosed investment agreement.

NOTABLE HEADLINES

• Fed's Cook (voter) denied any wrongdoing and vowed to fight US President Trump's effort to fire her from the Fed, while her lawyer said there is no legally valid reason for ousting Governor Cook from the Federal Reserve Board.
• US President Trump’s administration is unveiling a new proposal aimed at turning the nation’s highway and rail lines into “multi-use” utility corridors that could hold critical infrastructure, according to Semafor.
• US President Trump signed a proclamation to increase lean beef imports with the quota increased by 100k tons of beef per month effective September 1st for 90 days, while the proclamation increases lean beef trimmings that are imported with no-above-quota tariff.
• US President Trump signs order to ban some foreign equipment in energy grids.
• US House GOP leaders are aiming to put a Senate-passed stopgap spending bill on the floor early next week, in the first days back in session after a five-week recess, according to Politico citing sources.
• NVIDIA (NVDA) Q2 2027 (USD): Adj. EPS 2.22 (exp. 2.09), Revenue 96.2bln (exp. 92.3bln). CFO said they are seeing demand acceleration and expect revenues to grow about 70% in fiscal 2028. Shares rose 4.7% after earnings.

APAC TRADE

EQUITIES

• APAC stocks were ultimately mixed, but with most indices in the green, after the flat performance stateside, where markets digested the firmer-than-expected headline PCE data and braced for NVIDIA earnings. The AI darling beat on top and bottom lines, although its shares were initially subdued, but were then boosted during the earnings call as the CFO flagged about a 70% revenue growth for the next fiscal year.
• ASX 200 underperformed amid another barrage of earnings releases and after recent inflation data, which prompted a call by NAB for the RBA to resume hiking rates at the next meeting in September.
• Nikkei 225 swung between gains and losses with the index fading the initial NVIDIA-spurred euphoria.
• KOSPI led the advances in the region as chipmakers cheered NVIDIA's strong results and outlook, while investors were also unfazed by the BoK's pre-emptive back-to-back rate hike.
• Hang Seng and Shanghai Comp were mixed amid several earnings releases and slower Industrial Profits, although the mainland was kept afloat after the PBoC conducted both 7-day and overnight reverse repos.
• US equity futures climbed higher with the Emini Nasdaq 100 front-running the gains following NVIDIA's results and earnings call.
• European equity futures indicate a higher cash market open with Euro Stoxx 50 futures up 0.4% after the cash market closed with gains of 0.2% on Wednesday.

FX

• DXY paused after recently gaining on the PCE data and with little fresh macro catalysts overnight for the US, while participants await the start of the Jackson Hole Symposium where Fed Chair Warsh will deliver a keynote address on Friday.
• EUR/USD moved off the prior day's trough, but with the upside contained amid a quiet calendar and light newsflow from the bloc.
• GBP/USD lingered near a weekly low beneath the 1.3600 handle following recent underperformance and a lack of pertinent drivers.
• USD/JPY was choppy in the absence of any tier-1 releases from Japan and after comments from BoJ Deputy Governor Himino, who reiterated the central bank's hawkish bias, stating that he believes the BoJ should continue to raise the policy interest rate and adjust the degree of monetary accommodation in accordance with developments in economic activity, prices and financial conditions.
• Antipodeans were marginally positive amid early gains in metal prices and increased rate hike expectations, with NAB now expecting the RBA to resume hiking rates at the September meeting after the recent CPI data.
• PBoC set USD/CNY mid-point at 6.7840 vs exp. 6.7261 (prev. 6.7829).
• SNB’s Martin said he'd prefer Swiss banks to maintain robust capital buffers and take market share from foreign banks that may face difficulties during the next downturn.

FIXED INCOME

• 10yr UST futures were contained after declining yesterday as Treasury yields rose across the curve following the US PCE data, in which the headline printed firmer-than-expected, while participants await a 2yr US auction and the start of the Jackson Hole Symposium.
• Bund futures lingered around the prior day's trough following recent supply and as German GfK data looms.
• 10yr JGB futures tracked the recent downside in global counterparts and were not helped by comments from BoJ Deputy Governor Himino, who believes the BoJ should continue to raise rates and wants to avoid a situation where delaying a rate hike leads to sharp inflation and requires rapid rate increases thereafter.

COMMODITIES

• Crude futures mildly declined following recent indecisive performance amid mixed geopolitical updates and after weekly inventory data showed headline crude inventories were little changed from the prior week.
• Indian tanker "HAANA" was planning to pass through the southern route of the Strait of Hormuz known as the Oman Corridor, but was warned to stop, according to Mehr News.
• Russia's Norsi oil refinery reportedly halted operations following an earlier drone attack.
• Spot gold rebounded overnight to recoup post-PCE losses and returned to above USD 4,600/oz, while the early momentum coincided with advances in silver, which later stalled beneath the USD 70/oz level.
• Copper futures traded sideways alongside the somewhat mixed/mostly positive risk appetite.

CRYPTO

• Bitcoin was choppy after retreating back beneath the USD 79,000 level.

NOTABLE ASIA-PAC HEADLINES

• BoJ Deputy Governor Himino said he believes the BoJ should continue to raise the policy interest rate and adjust the degree of monetary accommodation in accordance with developments in economic activity, prices and financial conditions, while he added that they must be mindful of upside price risk more than ever before and the BoJ will debate policy at every meeting while taking such risks into account. Himino said if underlying inflation rises to a level above the 2% price target, it would have an adverse impact on the economy and that as financial conditions remain accommodative, the BoJ needs to ease off the accelerator in a timely fashion and continue raising the policy rate. Furthermore, he stated that in easing off the accelerator and raising rates, the BoJ must carefully assess conditions ahead, taking forecasts and other information into account, and it is desirable to avoid a situation where delaying a rate hike leads to sharp inflation and requires rapid rate increases thereafter.
• Bank of Korea hiked its base rate by 25bps to 3.00%, as expected, while the rate decision was not unanimous as Board Member Hwang dissented on the rate decision. BoK said inflation is projected to remain above the target level for a considerable time, and it will decide the timing and pace of further increases in the base rate. BoK Governor Shin said inflationary pressure looks like it is here to stay, and the back-to-back rate hike was necessary to preemptively respond, while they needed to act by raising interest rates before inflationary pressures grow further. In terms of board members' forecasts, 5 of 21 policy rate projections by board members for the next six months are at 3.00%, 10 of 21 policy rate projections are at 3.25%, and 6 of 21 policy rate projections are at 3.50%.

DATA RECAP

• Australian Private Capital Expenditure (Q2 QQ) -3.6% vs. Exp. 0% (Prev. 6.5%)
• Chinese Industrial Profits YTD (Jul YY) 17.6% (Prev. 18.7%)

GEOPOLITICS

MIDDLE EAST

• Israel is mulling expelling British and potentially other European officials from the US-led co-ordination centre for postwar Gaza following criticism of Israeli PM Netanyahu’s policies on Palestinian territories, according to FT.

RUSSIA-UKRAINE

• Russian President Putin is reportedly planning a Ukraine escalation and sees talks as fruitless.
• Explosions were reported in Ukraine's capital of Kyiv, while it was also reported that Russia attacked an industrial facility in the Ukrainian city of Kryvyi Rih.
• CIA chief Ratcliffe's recent trip to Moscow was to warn Russia not to attack NATO, according to WSJ.
• EU member states resurrect a plan to use frozen Russian assets for Ukraine, with Sweden, the Netherlands and Spain pushing to use the funds to solve Kyiv’s funding crisis, according to FT.

OTHER

EU/UK

NOTABLE HEADLINES

• UK government is to give the BoE a new official objective of boosting innovation in digital currencies and payments, according to FT.
• UK households are unlikely to get further energy bills support before the October price cap, but more targeted measures could be examined if there is a further shock in January, according to The Guardian.
• Germany is in talks to invest in Britain’s Trident nuclear deterrent program, according to The Telegraph.
• France replaces Italy as European bond investors’ biggest concern, according to FT.