US stocks finished mixed as markets digested the EU-US trade deal - Newsquawk Asia-Pac Market Open

• US stocks were mixed with markets chopping to the US/EU trade announcement which was initially hailed by markets as a step in the right direction, but sentiment on the deal swiftly turned as European officials did not seem pleased with the deal, with German Chancellor Merz warning of the significant impact it will have on the German economy, while French President Macron had been calling for the implementation of the Anti-Coercion Instrument, even after the deal was agreed. Overall, the deal is being framed as a win for the US but a loss for the EU, keeping tensions high despite the agreement. Elsewhere on trade, the third round of US/China talks resumed Monday and are set to continue for a second day, but negotiators made no remarks, while US sectors were mixed with Energy, Consumer Discretionary and Tech leading gains which helped keep the Nasdaq buoyed ahead of key tech earnings this week from AAPL, META, MSFT and AMZN. Conversely, all other sectors were red, with notable weakness in Real Estate, Materials and Utilities.
• USD strengthened notably to start the week and gained a firm footing above the 98.00 level following the trade agreement between the US and the EU, while the US also began talks with China in Stockholm which will resume on Tuesday. Nonetheless, the data calendar was quiet on Monday but comes ahead of a deluge of risk events this week.
• Looking ahead, highlights include US-China talks, Supply from Australia & Japan.

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LOOKING AHEAD

• Highlights include US-China talks, Supply from Australia & Japan.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks were mixed with markets chopping to the US/EU trade announcement which was initially hailed by markets as a step in the right direction, but sentiment on the deal swiftly turned as European officials did not seem pleased with the deal, with German Chancellor Merz warning of the significant impact it will have on the German economy, while French President Macron had been calling for the implementation of the Anti-Coercion Instrument, even after the deal was agreed. Overall, the deal is being framed as a win for the US but a loss for the EU, keeping tensions high despite the agreement. Elsewhere on trade, the third round of US/China talks resumed Monday and are set to continue for a second day, but negotiators made no remarks, while US sectors were mixed with Energy, Consumer Discretionary and Tech leading gains which helped keep the Nasdaq buoyed ahead of key tech earnings this week from AAPL, META, MSFT and AMZN. Conversely, all other sectors were red, with notable weakness in Real Estate, Materials and Utilities.
• SPX 0.00% at 6,389, NDX +0.36% at 23,356, DJI -0.14% at 44,838, RUT -0.07% at 2,259.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said the US is going to be setting a tariff for the rest of the world and that's what they have to pay, while he would love to see China open up their country. Furthermore, Trump said the world tariff would be somewhere between 15-20%.
• US President Trump said he will be announcing pharma tariffs in the "very near future" and will be dealing with the UK on pharma, while Trump added he would not use pharma tariffs as a block for the UK.
• USTR's Greer said they want to keep working on steel and on China but did not expect a big breakthrough on Monday and want to move forward in a possible way, while he said there is interest for both Trump and Xi to meet. Furthermore, Greer said the EU will accept some aspects of US auto standards, as well as noted that they continue to speak to counterparts and need more negotiations with India, while he added regarding the August 1st deadline that President Trump is more interested in good deals than quick deals.
• EU Trade Chief Sefcovic said the zero percent US-EU tariff list remains open to additions, while he noted that overcapacity is destroying the EU steel industry and that strategic cooperation with the US is better than a trade war.
• France has reportedly been pushing EU members to unload its “trade bazooka” on the US — both before and after the EU struck its deal with US President Trump, according to The New York Post.
• French wine and spirits federation said regarding the EU-US trade deal that disaster has been avoided but the coming days will be crucial for the sector and the eal is expected to confirm duty-free trade in spirits.
• Canadian PM Carney said trade talks with the US are at an intense phase and any trade deal with the US must be on fair terms for Canada, while he reiterated that a US trade deal without tariffs is not likely and that Canada is difficult in negotiations but is fighting for Canada.
• Beijing reportedly considered 20% fentanyl tariffs as “unfair”, but might accept a 10% baseline tariff on all imports if additional duties were lifted, according to SCMP sources.
• South Korean Finance Minister Koo Yun-cheol will hold high-level trade talks with his US counterpart in Washington on Thursday, according to Yonhap.

NOTABLE HEADLINES

• US President Trump reiterated the Fed has to cut rates and stated the US is doing well even without rate cuts, but will be doing better with rate cuts.
• Quarterly Financing Estimates showed US Treasury expects to borrow USD 1.007tln in privately held net marketable debt during the July-September 2025 quarter (prev. exp. USD 554bln), assuming an end-of-quarter cash balance of USD 850bln (prev. exp. USD 850bln).

FX

• USD strengthened notably to start the week and gained a firm footing above the 98.00 level following the trade agreement between the US and the EU, while the US also began talks with China in Stockholm which will resume on Tuesday. Nonetheless, the data calendar was quiet on Monday but comes ahead of a deluge of risk events this week.
• EUR underperformed amid the dollar strength and despite the EU/US trade agreement, with German Chancellor Merz warning that the German economy faces substantial damage from the tariffs agreed, while France has been pushing EU members to unload its “trade bazooka” on the US, before and after the EU-US trade deal was struck.
• GBP retreated to beneath the 1.3400 handle against the firmer buck, while UK PM Starmet met with US President Trump in Scotland but provided very little new.
• JPY weakened against the dollar with USD/JPY ascending north of the 148.00 level amid the dollar rally and widening yield differentials.

FIXED INCOME

• T-notes settled lower with price action choppy following the EU/US trade deal and ahead of a risk-packed week.

COMMODITIES

• Oil prices gained with the energy complex supported following US President Trump's warning to Russia and the EU/US trade deal.
• OPEC+ JMMC concluded with no policy recommendation, and it reiterated the importance of conformity, while the next meeting is on October 1st, according to Bloomberg citing delegates.
• Iraqi Kurdistan oil output is at around 120k BPD and is seen rising to 280k BPD by mid-August, according to Reuters citing Kurdish officials.
• Peru’s President announced a deal with PetroEcuador to connect the Ecuadorean oil fields with the Peruvian pipeline for transport to Peru's Talara refinery.
• Russia imposed a ban on gasoline exports for producers until August 31st with the decision made to preserve stability during a period of high demand, according to RIA.

GEOPOLITICAL

MIDDLE EAST

• US President Trump said it is difficult to deal with Hamas, while he is speaking to the Israeli PM and coming up with various plans.
• Israeli Ministers Dermer and Hanegbi travelled to the US on Sunday night and are expected to hold talks this week with White House envoy Whitkoff, Secretary of State Marco Rubio and other senior White House officials on Gaza and Iran, according to Axios’s Ravid on X.
• US President Trump said if Iran starts nuclear again "we'll wipe it out fast" and that "Iran has been sending out nasty signals".
• Iran’s President said they do not seek war and are ready for dialogue, according to Sky News Arabia.
• Iran's Foreign Minister said "If aggression is repeated, we will not hesitate to react in a more decisive manner and in a way that will be IMPOSSIBLE to cover up.". The Foreign Minister stated that "Iran knows exactly what happened during the recent American-Israeli aggression, both to us and our adversaries—including the extent of blows that are still being censored", while he added Iran will never respond to threats and intimidation.
• Iran could reconsider its nuclear weapons stance if future threats demand it, according to a senior Tehran official cited by Iran International.
• Russian President Putin held a phone call with Israel's PM Netanyahu, while Putin stressed the sovereignty and territorial integrity of Syria and discussed the Iranian nuclear programme with Netanyahu.

RUSSIA-UKRAINE

• US President Trump said he is "very disappointed" in Russian President Putin and is reducing the 50 days he gave Putin. Trump said that he's going to make a new deadline for about 10-12 days from today and does not see any progress being made. Furthermore, it was reported that President Trump said he is not so interested in talking to Russian President Putin anymore and that they are going to do secondary sanctions, unless they make a deal but added they might make a deal and might confirm the new Russia deadline on Monday night or on Tuesday.
• Russia's Medvedev said US President Trump is playing a game of ultimatums with Russia and that this is a "step towards war", while he added that Trump should remember that Russia is not Israel or Iran.
• Ukrainian President Zelensky said US President Trump's comments are timely at a point when things can change "thanks to strength used for the sake of genuine peace", while he added that Trump showed a clear position and expressed determination in remarks on Russia and Putin.

OTHER

• Malaysian PM Anwar said Cambodia and Thailand have agreed to an immediate ceasefire following talks and nations have reached a common understanding with the ceasefire commencing from midnight local time (18:00BST).
• Taiwanese President Lai Ching-Te is set to delay his proposed trip that included a stopover in the US, according to Reuters.
• China's mission to the EU accused certain EU Parliament members of violating the One-China policy and interfering in its domestic affairs, while it noted firm opposition to any form of official exchanges between the EU Parliament and Taiwan authorities.

ASIA-PAC

NOTABLE HEADLINES

• China’s market regulator said it will regulate low-price competition of enterprises in accordance with the law and will enhance the supervision of food, drugs and industrial products safety.
• US Senate Democrats, in a letter, opposed resuming China chip sales.
• China will issue a CNY 3,600 subsidy for every child per year up to three years old, according to Xinhua.
• China raised its flood emergency level in Beijing and Tianjin, while Chinese President Xi issued instructions for flood prevention and disaster relief.
• US Democrats and Republicans reportedly plan a bill to pressure China over its treatment of Taiwan and Uyghurs with the bill to stress security and rights issues.
• Japanese PM Ishiba said there is no change in his intention to stay in office, while it was reported that many called for PM Ishiba's resignation at the LDP meeting, according to Kyodo.

EU/UK

NOTABLE HEADLINES

• German government’s 2026 draft budget includes record investment of EUR 126.7bln, while it stated the German economy should noticeably improve this year compared with government forecasts of stagnation, according to Reuters sources.
• ECB's Kazimir said he does not see any significant change that would force his hand to act in September and it would take something like clear signs of unravelling the labour market for him to act. Furthermore, he sees no looming spectre of inflation undershoot and said risks are not tilted to the downside, while he noted the US-EU trade deal reduces uncertainty but it is unclear how it will impact inflation.