US stocks began the week with mild gains as participants look ahead to inflation data later this week - Newsquawk Asia-Pac Market Open

• US stocks were little changed although outperformance was seen in the Nasdaq 100 thanks to gains in the Tech and Consumer Discretionary sectors. On the flipside, Utilities, Real Estate and Consumer Staples underperformed while overall breadth was weak. Furthermore, equities were bid at the open but sold off throughout the last few hours of trade despite little fresh news driving price action, with participants still cognizant of the soft labour market report seen last Friday as they look ahead to inflation data this week.
• USD weakened and tracked longer-dated US yields lower to extend on Friday's losses that were triggered by another weak NFP report, while recent key updates included US President Trump announcing his final three picks to replace Fed Chair Powell including Former Fed Governor Warsh, current Fed Governor Waller, and NEC Director Hassett.
• Looking ahead, highlights include New Zealand Manufacturing Sales Volume, Australian Westpac Consumer Sentiment & NAB Business Surveys.

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LOOKING AHEAD

• Highlights include New Zealand Manufacturing Sales Volume, Australian Westpac Consumer Sentiment & NAB Business Surveys.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks were little changed although outperformance was seen in the Nasdaq 100 thanks to gains in the Tech and Consumer Discretionary sectors. On the flipside, Utilities, Real Estate and Consumer Staples underperformed while overall breadth was weak. Furthermore, equities were bid at the open but sold off throughout the last few hours of trade despite little fresh news driving price action, with participants still cognizant of the soft labour market report seen last Friday as they look ahead to inflation data this week.
• SPX +0.21% at 6,495, NDX +0.46% at 23,762, DJI +0.25% at 45,515, RUT +0.16% at 2,395.
• Click here for a detailed summary.

TARIFFS/TRADE

• NVIDIA (NVDA) said they have received several H20 licenses for their key customers in China, via the GS conference.
• Chinese President Xi said they should adhere to openness and win-win cooperation and maintain the international and economic trade order, while he said a certain country severely impacts the world economy with a trade war.
• Chinese Vice Commerce Minister said the government aims to formally sign an upgraded ASEAN-China free trade agreement by year-end.
• German Chancellor Merz said it is becoming apparent that the partnership with the US will be less self-evident, it will be more issue- and interest-based, while he added that they will work with European partners to promote a system of rules-based free trade, including with the US.
• Indian government sources said an EU trade delegation is arriving in New Delhi for talks this week and India plans to finalise terms of reference for proposed trade deal with Qatar separately in October, according to Reuters.

NOTABLE HEADLINES

• US Senate Banking panel to vote on Miran's Fed nomination on September 10th, according to Bloomberg.

DATA RECAP

• US Employment Trends (Aug) 106.41 (Prev. 107.55, Rev. 107.13)
• US Consumer Credit (Jul) 16.01B vs. Exp. 10.0B (Prev. 7.37B)
• NY FED SCE: Inflation expectations: 1yr ahead 3.2% (prev. 3.1% in July), 3yr ahead 3.0% (prev. 3.0%), 5yr ahead 2.9% (prev. 2.9%)

FX

• USD weakened and tracked longer-dated US yields lower to extend on Friday's losses that were triggered by another weak NFP report, while recent key updates included US President Trump announcing his final three picks to replace Fed Chair Powell including Former Fed Governor Warsh, current Fed Governor Waller, and NEC Director Hassett.
• EUR benefitted from the weak dollar and despite the confidence vote in France, which PM Bayrou lost in a landslide as expected, with President Macron to name a new PM in the coming days, while the announcement may come after the September 10th strikes, perhaps aiming to avoid further domestic unrest that would hinder the political climate.
• GBP gained a firmer footing at the 1.3500 handle as the G10 currencies generally took advantage of the continued dollar selling.
• JPY was ultimately flat against the dollar after having suffered from the political uncertainty in Japan which is seen to potentially delay the BoJ's policy normalisation.

FIXED INCOME

• T-notes flattened as US President Trump narrowed the Fed Chair picks to three and with eyes turning to the BLS prelim. benchmark revisions, CPI/PPI and supply.

COMMODITIES

• Oil prices were firmer to start the week with early tailwinds from OPEC and geopolitics before Saudi OSPs saw gains trimmed.
• Saudi Arabia set the October Arab light crude OSP to Asia at Oman/Dubai + USD 2.20bbl (prev. Sep. 3.20/bbl, Aug. 2.20/bbl), while it set the OSP to NW Europe at ICE Brent + USD 2.55/bbl (prev. Sep. 3.35/bbl), and set OSP to US at ASCI + USD 4.20/bbl (prev. Sep. 4.20/bbl).

GEOPOLITICAL

MIDDLE EAST

• Israeli PM Netanyahu warned Gaza residents to leave now, with forces organising and assembling in Gaza City for a ground manoeuvre. It was earlier reported that PM Netanyahu said they will complete their missions in the West Bank, Gaza and everywhere, according to Al Hadath.
• Hamas said they are prepared to release a large number of living hostages on the first day, and all hostages, both living and deceased, on an additional agreed-upon day, according to an i24 news journalist.
• IAEA chief Rafael Grossi reports progress in talks with Iran over full resumption of nuclear inspections, while he is hoping for a successful resolution within days and said there is still time, but not much. It was separately reported that Iran’s Foreign Minister and IAEA Chief Grossi are set to meet on Tuesday, but remains contingent on being close enough to reach an access deal there, according to WSJ's Norman.

RUSSIA-UKRAINE

• Ukrainian President Chief of Staff discussed Russian strikes with US Secretary of State Rubio and said a government building was hit on Saturday by a Russian ballistic missile.
• EU sanctions envoy O'Sullivan is currently in Washington with a team of EU experts for discussions with US counterparts regarding sanctions against Russia.
• EU diplomats said they expect the commission to propose a 19th package of sanctions against Russia by Friday, while the EU may list banks in two central Asian countries as part of the 19th package, as well as Russian regional banks and other entities.
• EU mulls backtracking on a proposed ban on providing terminal services to Russian LNG suppliers, potentially weakening a plan to phase out the gas purchases helping to fund Putin’s war efforts, while Denmark has proposed removing a prohibition of LNG terminal services from the draft regulation to end energy reliance on Moscow, according to Bloomberg.
• EU officials are reportedly discussing potential sanctions on China and other parties for the purchase of Russian gas/oil, with potentially secondary sanctions against China touted, according to FT citing sources.
• US Energy Secretary Wright said European nations should stop purchasing Russian oil/gas if they want the US to impose tighter sanctions on Russia, and instead, European nations should purchase US energy products. Wright added that European nations stopping such purchases would have a "positive influence" on the US leaning more aggressively on sanctions.
• Politico cited White House sources that noted “The optimism post-Alaska and post-European meeting is gone” and there is little optimism that Russia "will go any further" regarding US-Russia-Ukraine relations.

ASIA-PAC

NOTABLE HEADLINES

• PBoC extended the currency swap with the Hungarian and Swiss Central Banks for five years, while the PBoC and ECB extended a bilateral euro-renminbi currency swap arrangement.
• Russia and China are in discussions on Russian corporate bond placements in the Chinese market, while Russia's Finance Minister said priority is the domestic sovereign yuan-denominated bonds issuance, not Panda bonds, and Russia wants to establish a direct link to China's depository.

EU/UK

NOTABLE HEADLINES

• UK government spokesperson said the government is looking to overturn changes the House of Lords made on the workers' rights bill.
• French PM Bayrou lost the confidence vote in the National Assembly, as expected, and will now need to tender his resignation.
• ECB has ended a standoff with banks over how much money they need to set aside for risky loans, after scaling back use of a controversial model behind its demand for billions in additional provisions, according to Bloomberg.
• ECB Villeroy said they are in a good position with inflation in Europe.

DATA RECAP

• German Industrial Output MM (Jul) 1.3% vs. Exp. 1.0% (Prev. -1.9%)
• German Trade Balance, EUR, SA (Jul) 14.7B vs. Exp. 15.3B (Prev. 14.9B)
• German Exports MM SA (Jul) -0.6% vs. Exp. 0.1% (Prev. 0.8%)
• German Imports MM SA (Jul) -0.1% vs. Exp. -1.0% (Prev. 4.2%)
• EU Sentix Index (Sep) -9.2 vs. Exp. -2.0 (Prev. -3.7)