US stock were ultimately mixed amid quiet catalysts to start the week - Newsquawk Asia-Pac Market Open

• US stocks saw two-way price action and ultimately finished mixed amid light pertinent catalysts and a quiet calendar to start the week. Nonetheless, there was mild outperformance in the Nasdaq owing to the gains in the heavyweight tech stocks, while the equal-weighted S&P (RSP) and the small-cap Russell 2000 were the laggards. Sectors were also mixed with notable strength seen in the communication sector and with health and energy at the other end of the spectrum.
• USD weakened with the DXY falling beneath the 98.00 level amid the softer yield environment in a session devoid of any major news catalysts or notable data releases and with the Fed in a blackout period, while the data calendar for the US remains light for the week, leaving the focus on the weekly BLS claims report and trade-related developments.
• Looking ahead, highlights include New Zealand Trade Data, Malaysian CPI, RBA Minutes.

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LOOKING AHEAD

• Highlights include New Zealand Trade Data, Malaysian CPI, RBA Minutes.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks saw two-way price action and ultimately finished mixed amid light pertinent catalysts and a quiet calendar to start the week. Nonetheless, there was mild outperformance in the Nasdaq owing to the gains in the heavyweight tech stocks, while the equal-weighted S&P (RSP) and the small-cap Russell 2000 were the laggards. Sectors were also mixed with notable strength seen in the communication sector and with health and energy at the other end of the spectrum.
• SPX +0.14% at 6,306, NDX +0.50% at 23,180, DJI -0.04% at 44,323, RUT -0.40% at 2,231.
• Click here for a detailed summary.

TARIFFS/TRADE

• US Treasury Secretary Bessent said trade talks are moving along and he is more concerned with high quality deals than getting them by 1st August, while he added "we're not going to rush". Bessent stated that secondary tariffs could be up to 100% on countries that purchase sanctioned oil if the Senate bill goes ahead and 80 or 90 senators want to pass it, while he would urge Europe to follow the US if they implement secondary tariffs. Bessent also commented regarding the EU that they have become more engaged and thinks they would want to negotiate faster. Furthermore, he said they are going to be engaging in China talks in the near future, and trade is in a good place, while they can start talking about other things.
• White House Press Secretary Leavitt said could see more tariff letters for August 1st.
• EU diplomats said the bloc is exploring a wider set of possible countermeasures against US tariffs but is still prioritising a negotiated solution with the US over tariffs.
• German government spokesperson said regarding EU-US trade talks, that the German Chancellor does not consider countermeasures by the EU appropriate at present.
• Mexican President Sheinbaum said the US has not formally notified Mexico of possible measures against Mexico's airline sector, and there is no reason for Mexico to receive any sanctions for changes made to the capital's airport system.
• India’s trade team has now returned to India and a deal with the US is likely by September or October, according to NDTV citing sources.
• Taiwan is to conduct a new round of trade talks with the US this week.

NOTABLE HEADLINES

• US Senate Majority Leader Thune met with President Trump and said the topic of firing Fed Chair Jerome Powell didn't come up, although the president remains frustrated with the Fed chair on interest rates, according to Semafor.
• US Rep. Luna (R-FL) referred Fed Chair Powell to the DoJ for criminal charges, accusing him of two specific instances of lying under oath, according to Fox News.

DATA RECAP

• US Leading Index Change MM (Jun) -0.3% vs. Exp. -0.2% (Prev. -0.1%)

FX

• USD weakened with the DXY falling beneath the 98.00 level amid the softer yield environment in a session devoid of any major news catalysts or notable data releases and with the Fed in a blackout period, while the data calendar for the US remains light for the week, leaving the focus on the weekly BLS claims report and trade-related developments.
• EUR benefitted from the dollar's demise and briefly reclaimed the 1.1700 status, while on the trade front, EU diplomats said the bloc is exploring a wider set of possible counter-measures against US tariffs and there were also comments by US Treasury Secretary Bessent that the EU have become more engaged and thinks they would want to negotiate faster.
• GBP gained against the greenback and briefly returned to the 1.3500 territory before mildly pulling back from intraday highs.
• JPY strengthened in the aftermath of the Upper House elections in Japan, which saw the ruling LDP-led coalition lose its majority, and PM Ishiba affirm his intention to continue his role, while the LDP-Komeito coalition remained the largest block in parliament and seemed to have performed better than the market had anticipated, given the sell-off in long-end/super long-end JGBs and JPY selling leading up to the election, according to JPMorgan.

FIXED INCOME

• T-notes bull flattened in quiet trade amid light catalysts and with the Fed in a blackout period.

COMMODITIES

• Oil pricessettled marginally softer in rangebound trade amid quiet newsflow and following the EU's 18th sanctions package on Russia last week.
• Iranian media reported a large fire in a factory for oil products east of Isfahan, according to Al Arabiya.

GEOPOLITICAL

MIDDLE EAST

• Iranian Foreign Minister told Fox News they cannot give up Iranian enrichment.
• Iranian Foreign Ministry spokesperson said a trilateral meeting with China and Russia is to be held on Tuesday regarding the nuclear file and UN snapback mechanism, while there are no plans for talks with the US at the moment.

RUSSIA-UKRAINE

• Ukraine is reportedly looking to discuss a leaders' meeting with Russia in Turkey, according to Bloomberg. It was later reported that Ukraine's President Zelensky said the next Ukraine-Russia meeting is planned for Wednesday in Turkey.
• Russia and Iranian defence ministers held talks in Moscow which involved strengthening cooperation.
• Russia's Kremlin said they are in favour of a third round of talks regarding peace in Ukraine but added “the two draft memorandums (from Moscow and Kyiv) are diametrically opposed so there is much work to do".
• Russia's Kremlin said if US President Trump is in Beijing at the same time as Russian President Putin, the Kremlin cannot rule out a meeting.
• UK government added 137 new specifications and two new designations under the Russia sanctions regime, while it said sanctions target 135 oil tankers which form part of the fleet "responsible for illicitly carrying USD 24bln worth of cargo since the start of 2024".
• Norway’s PM said Norway stands ready to provide considerably more funding for Ukrainian air defence and they are discussing whether to deliver the patriot system to Ukraine.

OTHER

• US House lawmakers asked Microsoft (MSFT), Alphabet (GOOGL), Meta (META) and Amazon (AMZN) CEOs to answer if they have adequate safeguards to address concerns about China and Russia targeting submarine cables, according to a letter seen by Reuters.

ASIA-PAC

NOTABLE HEADLINES

• China released rules for rental housing effective September 15th, according to Xinhua. China is to encourage an increase in the supply of rental housing, as well as regulate rental activities and rental firms' operations, while it calls for local governments to set up a rent monitoring mechanism.

EU/UK

NOTABLE HEADLINES

• ECB survey showed firms' 1-year ahead inflation expectation at 2.5% (prev. 2.9%), while 3-year and 5-year ahead inflation expectations were unchanged at 3.0%.