US stocks gained with upside led by a tech surge on several bullish headlines - Newsquawk Daily Asia-Pac Market Open

• US stocks gained with outperformance in the tech-heavy Nasdaq 100 as the Tech sector was buoyed by numerous bullish stories, ahead of GOOGL and TSLA earnings on Wednesday; 1) Taiwan export orders in June +59.4% Y/Y (exp. 49.5%); 2) TSMC set to raise prices for both advanced and mature chip production services by up to 10% in 2027; 3) NVDA disclosed a 9.3% passive stake in NBIS; 4) HUT and IREN also gained after recent order news; 5) NVDA said chips are on schedule for use in AI data centres. Elsewhere, geopolitical headlines dominated the tape, as US/Iran tensions continued to escalate with no signs of abating, which saw energy benchmarks see strength of c. USD 2/bbl; some of the more notable reports were that Trump said they will hit Pickaxe Mountain very soon, and hard, while the Yemeni Houthis have warned shipping firms to avoid loading or discharging at Saudi ports. Sectors closed predominantly in the green, with only Consumer Staples and Communications in the red, with Energy the next best performing sector and supported by the aforementioned stories.
• USD was firmer on geopolitical risk increasing yet again. Recent moves in yields show markets are returning to the view that oil prices will remain higher for some time, with the US 2yr approaching its YTD high, and money markets back to pricing over 30bps of tightening by year-end from the Fed. Geopolitical developments today were net negative as reports noted Yemeni Houthis warned shipping firms to avoid loading or discharging at Saudi ports, and six Saudi ships were forced to return from Bab al-Mandab. Meanwhile, talks between Iran and Pakistan have seemingly yielded little progress.
• Looking ahead, highlights include Japanese Trade Data, Australian MI Leading Index, New Zealand Credit Card Spending, Supply from Australia & Japan.

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LOOKING AHEAD

• Highlights include Japanese Trade Data, Australian MI Leading Index, New Zealand Credit Card Spending, Supply from Australia & Japan.
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IRAN CONFLICT

• US President Trump said Iran was desperate to meet but that the US had no interest at present, adding the US was not finished with Iran and was not leaving the region. Trump said US actions had already had a significant impact on Iran and reiterated any agreement would prevent Iran from obtaining a nuclear weapon, while he warned the US would strike any site Iran considered for nuclear activity, and said Iran "hasn't seen anything yet." Furthermore, he said the US would strike Pickaxe Mountain soon and very heavily.
• US President Trump reportedly rejected a proposal for a 10-day ceasefire with Iran, according to Al Hadath citing the Jerusalem Post.
• US gave Iraqi PM Al-Sudani the green light to play a role in efforts to reduce tensions and end the conflict between the US and Iran, according to IRIB News citing Al Arabiya.
• Iran proposed the 10-day ceasefire, according to i24 News' Stein citing sources, while the US was reportedly seeking a longer ceasefire and at least partial navigation through the Strait of Hormuz. Furthermore, sources said the purpose of the proposed 10-day pause was to find a solution for the Strait of Hormuz, while mediators expanded the proposal by suggesting a "middle route to Hormuz" between Omani and Iranian-controlled waters to allow shipping to pass, although some members of the Trump administration reportedly described the Iranian proposal as "absurd" and "illogical."
• Iranian Foreign Minister Araghchi, during a call with his French counterpart, said the unconventional and unprofessional actions of two French diplomats in Tehran were unacceptable.
• IRGC said it targeted a tactical radar complex near Ali Al-Salem base and another radar system in Bubiyan Island in Kuwait, while Iran's army also said it shot down a one-way attack drone in the country's northwest, according to Tasnim.
• Explosions were reported at the US Fifth Fleet headquarters in Bahrain, and warning sirens sounded in Qatar, while explosions were reported in Jordan and in northern Kuwait. Furthermore, Kuwait's Ministry said several power and water desalination plants were attacked during the Iranian strikes on Monday.
• Two tankers carrying Saudi crude reportedly turned around in the Red Sea following Houthi threats, according to shipping data, while it was separately reported that six Saudi vessels had been forced to return from Bab al-Mandab.
• Yemen's Houthis warned shipping companies to avoid loading or unloading cargo at Saudi ports, and said any vessel travelling to or from Saudi ports could be targeted anywhere.
• Pakistan is attempting to push for a resumption of negotiations between Iran and the US, according to Al Arabiya citing sources. Separately, Iran's Interior Minister met Pakistan's Army Chief to discuss preparations for new talks with the US.
• Yemeni Houthi commander said Saudi Arabia faced two choices: lift the blockade and end its intervention or continue escalating the conflict at a significant cost, according to Al Mayadeen.
• UK PM Burnham approved the use of British military bases by the US for what the UK calls defensive strikes against Iran, in a continuation of Keir Starmer’s policy, even as US President Trump ramps up his war.

US TRADE

• US stocks gained with outperformance in the tech-heavy Nasdaq 100 as the Tech sector was buoyed by numerous bullish stories, ahead of GOOGL and TSLA earnings on Wednesday; 1) Taiwan export orders in June +59.4% Y/Y (exp. 49.5%); 2) TSMC set to raise prices for both advanced and mature chip production services by up to 10% in 2027; 3) NVDA disclosed a 9.3% passive stake in NBIS; 4) HUT and IREN also gained after recent order news; 5) NVDA said chips are on schedule for use in AI data centres. Elsewhere, geopolitical headlines dominated the tape, as US/Iran tensions continued to escalate with no signs of abating, which saw energy benchmarks see strength of c. USD 2/bbl; some of the more notable reports were that Trump said they will hit Pickaxe Mountain very soon, and hard, while the Yemeni Houthis have warned shipping firms to avoid loading or discharging at Saudi ports. Sectors closed predominantly in the green, with only Consumer Staples and Communications in the red, with Energy the next best performing sector and supported by the aforementioned stories.
• SPX +0.89% at 7,509, NDX +1.93% at 29,155, DJI +0.74% at 52,230, RUT +1.53% at 2,987.
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TARIFFS/TRADE

• US officials are reportedly preparing options that would allow President Trump to impose new tariffs on countries as soon as this week, according to FT.
• US President Trump announced a trade agreement with Jordan. Under the agreement, Jordan will continue to provide duty-free access for almost all US exports, improve trade by enforcing environmental laws, protecting labour rights, prohibiting imports produced with forced labour, strengthening intellectual property protections, ensuring fair trade practices and improving customs procedures. Jordan will also remove non-tariff barriers and expand market access for US goods, including agricultural products and motor vehicles.
• US Treasury Secretary Bessent said the US approach towards Canada was "just reciprocity", adding that Canada remained highly discriminatory on dairy, alcohol and beverages.
• USTR Greer said Canada offered more favourable trade deals to other countries and that the measures proposed by President Trump were tailored specifically to Canada. Greer said Canada's trade retaliation had been significant and that the US was not proposing to ban goods in the way Canada had, while Washington had been asking Canada for a year to remove retaliatory measures against Trump's tariffs, and Trump had already taken actions relating to the USMCA.
• Canadian Prime Minister Carney said President Trump's latest tariff threats violated the USMCA and that he and Trump had agreed to intensify negotiations in the coming weeks following a conversation on Tuesday morning. Carney stated Canada would consider all options if the US proceeded with the threatened tariffs, and wanted a comprehensive trade agreement covering all critical sectors rather than a partial deal, while he added that provinces should only remove restrictions on US alcohol as part of a broader agreement.

NOTABLE HEADLINES

• US Treasury Secretary Bessent said the underlying US economy remained very strong, core prices were stable and 3% growth during the second half of the year was "not unreasonable", while he added that government equity stakes were intended to create market signals. Bessent also said the US did not need another government shutdown and that he would like the Clarity Act to pass before Congress adjourned.
• US War Secretary Hegseth told the Senate Panel that the Pentagon needs funds urgently and requests USD 2bln for equipment lost or damaged in combat, while he added that the Senate must pass USD 67bln supplemental.

DATA RECAP

• US ADP Employment Change (Weekly) 16.5K (Prev. 19.3K)

FX

• USD was firmer on geopolitical risk increasing yet again. Recent moves in yields show markets are returning to the view that oil prices will remain higher for some time, with the US 2yr approaching its YTD high, and money markets back to pricing over 30bps of tightening by year-end from the Fed. Geopolitical developments today were net negative as reports noted Yemeni Houthis warned shipping firms to avoid loading or discharging at Saudi ports, and six Saudi ships were forced to return from Bab al-Mandab. Meanwhile, talks between Iran and Pakistan have seemingly yielded little progress.
• EUR marginally weakened following two-way price action and amid a firmer buck, while newsflow was light from the bloc, although there were reports that the European Commission will impose its first Digital Markets Act fine on Google (GOOGL) on Thursday.
• GBP weakness continued in the aftermath of UK PM Burnham announcing John Healey as the new Chancellor. Additionally, funding concerns have already arisen after the new government announced they would remove VAT on electricity bills, while participants now look ahead to UK CPI data.
• JPY suffered amid the firmer buck, higher US yields and upside in oil prices which lifted USD/JPY above the 163.00 level.

FIXED INCOME

• T-notes bear flattened as rising oil prices reinforced expectations for further Fed tightening.

COMMODITIES

• Oil prices gained as US/Iran tensions continued to escalate with no signs of abating.
• Iraq’s Oil Minister said the total value of deals signed between Iraq's Oil Ministry and US companies during the Iraqi PM's visit is estimated at USD 200bln, while he added that agreements with US companies will add significant production capacity and investment in associated gas.
• Russian Deputy PM Novak said the fuel market had partially stabilised, although conditions remained difficult in some regions.
• Egypt is reportedly in talks with major energy companies on a multi-year LNG supply agreement, seeking 15-18 cargoes per month for three to five years.

ASIA-PAC

NOTABLE HEADLINES

• PBoC increased its relending quota for agriculture and small businesses by CNY 100bln.
• US Treasury Secretary Bessent said the US could sanction any open-source AI model found to have used stolen intellectual property and that Chinese AI models would be reviewed in the coming days. Bessent stated the key question was whether Chinese models were trained on stolen material, while he added the US supported open-source AI development but not intellectual property theft and was beginning to see domestic open-source AI models emerge.
• US and China are reportedly set to hold AI talks in September, according to sources.
• China's Moonshot was reportedly in discussions to raise pre-IPO funding at a USD 50bln valuation.
• Japan's government is considering raising the gasoline subsidy threshold to JPY 175 per litre in September from the current JPY 170 per litre.

EU/UK

NOTABLE HEADLINES

• UK PM Burnham is reportedly set to cut business rates for the hospitality sector by 20% within days, according to the Huffington Post, while a GBP 2 cap on bus fares is expected to be announced as soon as Wednesday.
• UK PM Burnham said the government had to demonstrate its commitment to the fiscal rules and be prepared to make difficult decisions, according to Bloomberg's Wickham. It was also reported that PM Burnham’s spokesperson said the government would not issue war bonds to finance defence spending.
• Reform UK leader Farage is to demand that Prime Minister Burnham call a general election, arguing he had no mandate to govern Britain, according to The Telegraph.
• European Commission will reportedly impose its first Digital Markets Act fine on Google (GOOGL) on Thursday, according to Handelsblatt, while the penalty could reach up to 10% of the company's annual global revenue.

DATA RECAP

• UK Employment Change (May) 147K vs. Exp. 85K (Prev. 100K)
• UK Unemployment Rate (May) 4.9% vs. Exp. 4.9% (Prev. 4.9%)
• UK Claimant Count Change (Jun) 6.7K vs. Exp. 28.3K (Prev. 31.2K)
• UK Average Earnings Incl. Bonus (3M/Yr) (May) 4.3% vs. Exp. 4.5% (Prev. 4.4%)
• UK Average Earnings Ex. Bonus (3M/Yr) (May) 3.4% vs. Exp. 3.4% (Prev. 3.4%)
• German ZEW Current Conditions (Jul) -77.6 vs. Exp. -77.8 (Prev. -81.0)
• German ZEW Economic Sentiment (Jul) 26.3 vs. Exp. 18.0 (Prev. 10.0)
• Eurozone ZEW Economic Sentiment (Jul) 23.4 vs. Exp. 11.5 (Prev. 9.5)