US stocks rallied to claw back some of last week's losses - Newsquawk Asia-Pac Market Open

US stocks were bid on Monday and pared some of the weakness seen last week with outperformance in the small-cap Russell 2000 index, while gains were led by Communication, Utilities and Technology sectors. Conversely Energy, Consumer Staples and Consumer Discretionary lagged with energy the only sector in the red amid lower crude and natgas prices after crude prices sold off throughout the morning before bouncing off lows in response to a post from US President Trump who announced he will be substantially raising the tariff paid by India to the US due to buying massive amounts of Russian oil and then selling it on the open market for big profits
USD was little changed with the DXY contained just beneath the 99.00 handle amid the mixed performance against G10 peers and as markets await US President Trump's announcement regarding the replacements for the BLS head and Fed Governor Kugler. In terms of the trade-related headlines, President Trump noted frustration with India's oil purchases from Russia and announced he will be substantially raising tariffs on India.
Looking ahead, highlights include South Korean CPI, Australian & Japanese Services PMI (Final), Philippines CPI, Chinese Caixin Services PMI, BoJ June Meeting Minutes, Supply from Australia & Japan.

More Newsquawk in 2 steps:

1. Subscribe to the free premarket movers reports

2. Trial Newsquawk’s premium real-time audio news squawk box for 7 days

LOOKING AHEAD

Highlights include South Korean CPI, Australian & Japanese Services PMI (Final), Philippines CPI, Chinese Caixin Services PMI, BoJ June Meeting Minutes, Supply from Australia & Japan.
Click for the Newsquawk Week Ahead.

US TRADE

US stocks were bid on Monday and pared some of the weakness seen last week with outperformance in the small-cap Russell 2000 index, while gains were led by Communication, Utilities and Technology sectors. Conversely Energy, Consumer Staples and Consumer Discretionary lagged with energy the only sector in the red amid lower crude and natgas prices after crude prices sold off throughout the morning before bouncing off lows in response to a post from US President Trump who announced he will be substantially raising the tariff paid by India to the US due to buying massive amounts of Russian oil and then selling it on the open market for big profits.
SPX +1.47% at 6,330, NDX +1.87% at 23,189, DJI +1.34% at 44,174, RUT +2.10% at 2,212.
Click here for a detailed summary.

TARIFFS/TRADE

US President Trump said he will be substantially raising the tariff paid by India to the US due to it buying massive amounts of Russian oil and then selling it on the open market for big profits.
EU is said to suspend trade countermeasures on the US by six months, according to Bloomberg sources.
EU said to be awaiting US President Trump's actions on its car tariffs and exemptions this week, according to Bloomberg.
Germany’s Finance Minister said it is a positive that there is a deal but there is a lot to clarify with the US, while he added the EU was too weak in negotiations and cannot be satisfied. Furthermore, it was stated that the Finance Minister and US Treasury Secretary Bessent are in constant communication and he wants to have a good relationship.
Swiss government said it is not considering any countermeasures against the US at this point and is ready to make a more attractive offer to the US.
Brazil's government has set aside for now plans for direct retaliation against steep US tariffs taking effect this week and is focusing instead on a relief package for industries hit the hardest by the levies. It was separately reported that Brazil's labour minister said the government would announce its US tariff response from August 6th.
Brazil’s Finance Minister Haddad believes he will speak to US Treasury Secretary Bessent this week and understands that the PIX payment system must be kept under the responsibility of the BCB.
China rejected the US request to stop importing oil from Iran and Russia, according to Al Hadath.

NOTABLE HEADLINES

Fed's Daly (2027 voter) said she is comfortable with the Fed's July decision, but is less comfortable in making that same decision again and again, while she added that they can't wait to be certain there is no inflation persistence and need to make a call based on what's most likely. Daly said there is still a lot of uncertainty over whether a September rate cut would be appropriate and she was willing to wait another cycle regarding the July Fed decision, but cannot wait forever. Furthermore, she said every meeting going forward is 'live' for thinking about policy adjustments and they may do fewer than two rate cuts, but the more likely thing is that they need to do more, and two rate cuts this year still seems to be the appropriate amount of recalibration.
US President Trump reiterated that last week's jobs numbers were "rigged", with record revisions and the move was politically motivated, while he will pick an exceptional replacement.
US NEC Director Hassett said BLS data have become very unreliable and must get a fresh set of eyes at the BLS, while he thought labour market revisions last week were a "typo" and noted that large revisions in data require transparent explanations.

DATA RECAP

US Factory Orders MM (Jun) -4.8% vs. Exp. -4.8% (Prev. 8.2%, Rev. 8.3%)
US Durable Goods R MM (Jun) -9.4% (Prev. -9.3%)

FX

USD was little changed with the DXY contained just beneath the 99.00 handle amid the mixed performance against G10 peers and as markets await US President Trump's announcement regarding the replacements for the BLS head and Fed Governor Kugler. In terms of the trade-related headlines, President Trump noted frustration with India's oil purchases from Russia and announced he will be substantially raising tariffs on India.
EUR traded choopy beneath resistance near the 1.1600 level with the EU said to suspend trade countermeasures on the US by six months and is awaiting Trump's actions on car tariffs and exemptions this week, while Germany’s Finance Minister said it is a positive there is a deal but there is alot to clarify with the US and noted the EU was too weak in negotiations.
GBP was ultimately flat on the day with little pertinent drivers and after failing to sustain a brief return to the 1.3300 handle.
JPY strengthened against the dollar which saw USD/JPY test the 147.00 level to the downside alongside the softer US yield environment.

FIXED INCOME

T-notes rebounded from an early trough with prices also lifted as US trade got underway to add to the post-NFP gains.

COMMODITIES

Oil prices extended on Friday's post-NFP declines and after the latest OPEC confab during the weekend, where the eight members decided to raise output by 547k bpd.
Nigeria’s oil regulator said Nigeria's oil production is at over 1.8bln bpd with the current average oil output hovering around 1.78mln bpd.
Chile's Codelco said it will have to submit four reports so the mining regulator can lift the suspension of its underground operation after an accident at the El Teniente mine.

GEOPOLITICAL

MIDDLE EAST

Israeli PM Netanyahu said he will instruct the military this week on how to proceed in Gaza to meet war goals. It was separately reported that Netanyahu is leaning towards expanding the Gaza offensive and seizing the entire enclave, according to Israel's N12.
Israel is reportedly threatening to expand military offensive in Gaza and the Israeli government is said to be in dialogue with the US admin over proposals, according to FT.
A senior official from the IAEA will visit Iran within the next 10 days, according to Iran International cited by the Iranian Foreign Ministry.

RUSSIA-UKRAINE

US Special Envoy Witkoff to visit Russia on Wednesday, according to Reuters citing sources.
Russia's Kremlin said they are not talking about any kind of nuclear escalation and it’s "obvious that US submarines are already on combat duty anyway", while it added that US mediation efforts in the Ukraine conflict are very important and contacts with Witkoff are always useful and important. Furthermore, it stated that President Putin may meet Trump’s envoy Witkoff this week and that everyone should be very, very careful with nuclear rhetoric.
Russia's Foreign Ministry said Russia no longer considers itself bound by the moratorium on the deployment of short and medium-range missiles.
Dutch Defence Ministry said the Netherlands will be the first to contribute to NATO's new "Priority Ukraine Requirements List (PURL)" financing mechanism for Ukraine with the Netherlands to pay EUR 500mln under the new mechanism.

ASIA-PAC