US stocks finished mixed and the dollar softened after Trump picked CEA Chair Miran to the Fed board - Newsquawk Asia-Pac Market Open

• US stocks finished mixed with a mostly downward bias in the major indices, while sectors were varied as defensive names generally outperformed with Utilities and Staples leading gains, albeit healthcare lagged amid Eli Lilly's (LLY, -14.1%) oral GLP-1 Orforglipron Phase 3 trial disappointing expectations, despite later topping expectations on its Q2 report. Major updates for the day came via the White House, where US President Trump announced CEA Chair Miran as the temporary replacement to fill Kugler's seat on the Fed's board of governors, which becomes available on Friday through 31st January 2026. The announcement sparked upside in equities, gold, and T-notes, while the dollar was sold as dovish bets on the Fed increased as Trump's push for lower rates moves into the next stage. Additionally, Bloomberg reported that Fed Governor Waller is the favourite for the Fed Chair role, albeit a muted reaction was seen across markets.
• USD saw two-way trade with early upside seen and reports noted that Fed Governor Waller has emerged as the frontrunner in Trump's team as the next Fed Chair, although the greenback pared its gains after US President Trump announced that CEA Chair Miran as the temporary replacement to fill Fed Kugler's seat until end-January. There were also several data releases but were ultimately mixed with a rise in Jobless Claims and firmer-than-expected labour costs.
• Looking ahead, highlights include Japanese Household Spending & Current Account, BoJ Summary of Opinions from July Meeting, Supply from Australia.

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LOOKING AHEAD

• Highlights include Japanese Household Spending & Current Account, BoJ Summary of Opinions from July Meeting, Supply from Australia.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks finished mixed with a mostly downward bias in the major indices, while sectors were varied as defensive names generally outperformed with Utilities and Staples leading gains, albeit healthcare lagged amid Eli Lilly's (LLY, -14.1%) oral GLP-1 Orforglipron Phase 3 trial disappointing expectations, despite later topping expectations on its Q2 report. Major updates for the day came via the White House, where US President Trump announced CEA Chair Miran as the temporary replacement to fill Kugler's seat on the Fed's board of governors, which becomes available on Friday through 31st January 2026. The announcement sparked upside in equities, gold, and T-notes, while the dollar was sold as dovish bets on the Fed increased as Trump's push for lower rates moves into the next stage. Additionally, Bloomberg reported that Fed Governor Waller is the favourite for the Fed Chair role, albeit a muted reaction was seen across markets.
• SPX -0.08% at 6,340, NDX +0.32% at 23,390, DJI -0.51% at 43,969, RUT -0.30% at 2,215.
• Click here for a detailed summary.

TARIFFS/TRADE

• US Commerce Secretary Lutnick expects the China deadline to be extended for another 90 days, while Lutnick said he told tech companies that he will not charge tariffs if they build semiconductors in the country.
• Tougher transhipment penalties are not expected immediately as Trump tariffs kick in, according to Reuters citing sources.
• Japanese PM Ishiba said there is no discrepancy with the US that the 15% tariffs will not be added to existing levies for goods imported from Japan, while Ishiba said Japan is requesting the US to tweak executive orders regarding the tariffs for Japan.
• Swiss government said the Federal Council is to continue negotiations with the US and at present, tariff countermeasures in response to the US tariff increases are not being considered.

NOTABLE HEADLINES

• Fed's Waller emerged as the favourite for Fed Chair among the Trump team, according to Bloomberg. The Trump team reportedly supports Fed's Waller amid calls for rate cuts and favours him for Fed chair role, while he reportedly meets with the Trump campaign team, not the President.
• Fed's Bostic (2027 voter) reiterated the view of one cut being appropriate for this year, but added there is a lot of data before the September meeting.
• US President Trump announced CEA Chair Miran as a temporary replacement to fill Fed Kugler's seat until January 31st, 2026, and in the meantime will continue to search for a permanent replacement.
• US Treasury Secretary Bessent said something is wrong when the Fed does not cut and then jobs are revised, while he noted that Trump has said he is not going to fire Fed Chair Powell and asked Bessent two days ago about the Fed, although Bessent said he prefers the Treasury.
• US President Trump signed an executive order that aims to allow Private Equity, Real Estate, Crypto and other alternative assets in 401k(s).
• NY Fed SCE (July): 1-year ahead inflation expectation 3.1% (prev. 3.0%), three-year ahead 3.0% (prev. 3.0%), five-year ahead 2.9% (prev. 2.6%).

DATA RECAP

• US Wholesale Sales MM (Jun) 0.3% vs. Exp. 0.1% (Prev. -0.3%, Rev. -0.4%)
• US Wholesale Invt(y), R MM (Jun) 0.1% vs. Exp. 0.2% (Prev. 0.2%)
• US Unit Labour Costs Prelim (Q2) 1.6% vs. Exp. 1.5% (Prev. 6.6%, Rev. 6.9%)
• US Productivity Prelim (Q2) 2.4% vs. Exp. 2.0% (Prev. -1.5%, Rev. -1.8%)
• US Initial Jobless Claims w/e 226.0k vs. Exp. 221.0k (Prev. 218.0k, Rev. 219k)
• US Continued Jobless Claims w/e 1.974M vs. Exp. 1.95M (Prev. 1.946M, Rev. 1.936M)

FX

• USD saw two-way trade with early upside seen and reports noted that Fed Governor Waller has emerged as the frontrunner in Trump's team as the next Fed Chair, although the greenback pared its gains after US President Trump announced that CEA Chair Miran as the temporary replacement to fill Fed Kugler's seat until end-January. There were also several data releases but were ultimately mixed with a rise in Jobless Claims and firmer-than-expected labour costs.
• EUR was ultimately flat on the day with little pertinent catalysts from the bloc to spur price action.
• GBP outperformed following the hawkish BoE rate cut which was made by 5-4 vote split and required two rounds of voting to reach a decision for the first time.
• JPY traded indecisively in which USD/JPY retested the 147.00 level to the downside where support just about held.
• Banxico cut rates by 25bps as expected to 7.75%, with the decision split as 4/5 voted for 25bps cut, and Heath voted for unchanged rates, while the Governing Board deemed it appropriate to continue the rate-cutting cycle and said the decision was consistent with the assessment of the current inflationary outlook.

FIXED INCOME

• T-notes were lower and the curve flattened on reports that Waller is the Trump team's favourite for Fed Chair.

COMMODITIES

• Oil prices were choppy but ultimately finished lower as geopolitical updates largely pressured the space with Kremlin Aide Ushakov stating an agreement has been reached to hold a meeting with US President Trump and Russian President Putin in the next few days, although the White House later pushed back on Kremlin claims Trump and Putin agreed to a meeting.
• Chevron (CVX) chartered tankers began returning to Venezuela and are to pick up oil cargoes later this month, according to shipping data and Reuters sources.

GEOPOLITICAL

MIDDLE EAST

• Israeli PM Netanyahu said Israel intends to take control of all of Gaza and wants to hand it over to Arab forces that will govern Gaza properly, while he added that Gaza should be governed by a civilian authority that is not Israel, according to a Fox News interview.
• Lebanese government discussed a four-phase US plan for disarming Hezbollah by the end of the year and which would end Israeli military operations in Lebanon and bring about a withdrawal of Israeli forces from the south. However, it was reported moments after that Lebanon's Hezbollah ministers and Muslim Shi'iite allies in the Lebanese cabinet withdrew from the meeting in protest against the discussion of the proposal to disarm Hezbollah, according to Reuters citing sources.
• US issued new Iran-related sanctions which target several individuals and entities.

RUSSIA-UKRAINE

• Russian President Putin said regarding a potential meeting with US President Trump that the interest was mutual and he has nothing against meeting Ukrainian President Zelensky, according to Interfax. Furthermore, the UAE is being considered as a venue for the meeting between Trump and Putin.
• Kremlin Aide Ushakov said an agreement has been reached to hold a meeting with US President Trump and Russian President Putin in the next few days.
• White House pushed back on Kremlin claims that US President Trump and Russian President Putin agreed to a meeting, according to ABC News.
• A Putin-Trump meeting is likely to take place next week, according to Russia's Interfax and RIA.
• A Trump-Putin meeting would reportedly not happen if the Russian leader does not agree to meet with Ukrainian President Zelensky, according to AP citing a White House official

OTHER

• US President Trump plans to announce a pact for peace between Azerbaijan and Armenia, at the White House on Friday, according to CBS citing sources.

ASIA-PAC

NOTABLE HEADLINES

• China's Finance Ministry said it will strive to meet annual economic goals.
• US President Trump said most likely to be going in the not too distant future, maybe before the year is out, regarding a visit to China.
• S&P affirmed China's Sovereign rating at A+/A-; Outlook Stable.

EU/UK

NOTABLE HEADLINES

• BoE cut the Bank Rate by 25bps to 4.00%, as expected, in a 5-4 vote (exp. 7-2), while it reiterated 'careful and gradual' language, but dropped language that 'monetary policy needs to remain restrictive'. BoE’s Taylor initially argued for a 50bps rate cut, but voted for a 25bps cut to avoid a 'hold' decision, while it was the first time the MPC conducted two rounds of voting to reach a majority on the rate decision. Furthermore, Greene, Lombardelli, Mann and Pill voted for a hold and the dissenters said that recent inflation pressure is driven by "highly salient" food and energy prices, as well as noted there was a higher risk of second-round effects from inflation expectations.
• BoE Governor Bailey (post-meeting statement) said there has been substantial disinflation, domestic price and wage pressures have continued to abate. Bailey said it is important that the MPC does not cut the Bank Rate too quickly or too much but also commented they stand ready to adjust course if the MPC sees shifts in the balance of inflation risks.
• BoE Governor Bailey said in the Q&A that rates are definitely still on a downward path and policy is still restrictive, while he added the neutral rate is too uncertain to speculate on, and the path for rates has become more uncertain. Bailey also noted that uncertainty is elevated, but not quite as high as it was in May and the tariff situation is not over, and that it is UK factors shaping BoE policy.
• BoE Governor Bailey said the message to markets is the situation is "finely balanced" and the rate path is still downwards over time, while there is more uncertainty now about when steps are taken. BoE Governor Bailey later said the market's 50-50 pricing of rate outlook reflects a finely balanced situation, according to Bloomberg TV.