US stocks were ultimately mixed with focus on earnings and trade updates amid light catalysts - Newsquawk Asia-Pac Market Open

• US stocks finished the day somewhat mixed as the tech-heavy Nasdaq 100 lagged and was weighed on by weakness in mega-cap names Nvidia, Microsoft, Broadcom, and Netflix, while the Russell 2000 pared Monday's losses. As there was a lack of tier-1 data and with the Fed in a blackout period ahead of the confab next Wednesday, focus resided around a deluge of US earnings and also remarks from US President Trump and Treasury Secretary Bessent in which Trump announced a trade deal with both the Philippines and Indonesia, which will pay 19%. Furthermore, Trump said they will probably be meeting with Chinese President Xi in the not too distant future and that Xi has invited him to China, while Bessent suggested that August 1st is a pretty hard deadline, despite saying on Monday that the quality of the deal is what matters, not the time keeping, and he will conduct talks with China next Monday and Tuesday in Stockholm.
• USD continued to weaken against G10 peers amid the ongoing softer yield environment and despite the lack of clear drivers for the move, while comments from Fed officials provided very little given the blackout period and the data calendar was non-existent aside from the Richmond Fed Composite Index which worsened in July.
• Looking ahead, highlights include Australia MI Leading Index, Singapore CPI, BoJ Core CPI, Supply from Australia & Japan.

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LOOKING AHEAD

• Highlights include Australia MI Leading Index, Singapore CPI, BoJ Core CPI, Supply from Australia & Japan.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks finished the day somewhat mixed as the tech-heavy Nasdaq 100 lagged and was weighed on by weakness in mega-cap names Nvidia, Microsoft, Broadcom, and Netflix, while the Russell 2000 pared Monday's losses. As there was a lack of tier-1 data and with the Fed in a blackout period ahead of the confab next Wednesday, focus resided around a deluge of US earnings and also remarks from US President Trump and Treasury Secretary Bessent in which Trump announced a trade deal with both the Philippines and Indonesia, which will pay 19%. Furthermore, Trump said they will probably be meeting with Chinese President Xi in the not too distant future and that Xi has invited him to China, while Bessent suggested that August 1st is a pretty hard deadline, despite saying on Monday that the quality of the deal is what matters, not the time keeping, and he will conduct talks with China next Monday and Tuesday in Stockholm.
• SPX +0.03% at 6,308, NDX -0.50% at 23,064, DJI +0.46% at 44,525, RUT +0.81% at 2,249.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said there will probably be a meeting with Chinese President Xi in the not-too-distant future and that Xi has invited him to China, while he added they are getting along with China very well and he does not mind if the Philippines gets along with China.
• US President Trump announced a trade deal with the Philippines and stated that “The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs. The Philippines will pay a 19% Tariff”. Trump separately announced a deal with Indonesia with the tariff rate set at 19%, while the US will now sell American made products to Indonesia at a tariff rate of zero.
• US Treasury Secretary Bessent said tariffs are bringing manufacturing back to the US and that August 1st is a "pretty hard deadline". Bessent also commented they will likely work out an extension regarding the August 12th deadline with China, while he hopes to see a Chinese pull back on the glut of manufacturing and said there will be talks next Monday and Tuesday with China in Stockholm.
• Chinese experts warned that Beijing will not yield to the pressure if the US attempts to weaponise trade talks and tariffs, while such moves would also risk undermining the trade negotiation mechanism between the two countries, according to Global Times.
• Swedish PM confirmed they will host the continued trade negotiations between the US and China next week.
• Canadian PM Carney said Ottawa will agree a deal with the US that is in the best interests of Canadians and Canada will use all the time that's necessary to agree a deal with the US if that's available.
• EU Trade Commissioner Sefcovic said the EU-China summit this week is an opportunity to discuss critical trade and investment issues, while he added that they must work towards a more balanced partnership.

NOTABLE HEADLINES

• US President Trump said Fed Chair Powell is going to be out soon anyway, while he added the economy is strong and that Powell keeps rates too high. Furthermore, Trump said that Powell’s got to be out in 8 months and Trump suggested that they should be at 1%.

DATA RECAP

• US Richmond Fed Composite Index (Jul) -20.0 (Prev. -7.0, Rev. -8)
• US Richmond Fed Services Index (Jul) 2.0 (Prev. -4.0, Rev. -1)
• US Richmond Fed Manufacturing Shipments (Jul) -18.0 (Prev. -3.0, Rev. -5)

FX

• USD continued to weaken against G10 peers amid the ongoing softer yield environment and despite the lack of clear drivers for the move, while comments from Fed officials provided very little given the blackout period and the data calendar was non-existent aside from the Richmond Fed Composite Index which worsened in July.
• EUR gained on the back of a softer dollar which lifted the single currency back above the 1.1700 level, while newsflow from the bloc was light although there were comments from EU Trade Commissioner Sefcovic who said the EU-China summit this week is an opportunity to discuss critical trade and investment issues.
• GBP benefitted from the weaker buck and returned to the 1.3500 territory, albeit with gains capped after the recent surprise jump in UK borrowing data which showed the second-highest June borrowing since monthly records began in 1993, and is seen to add pressure on UK Chancellor Reeves' Autumn Budget.
• JPY extended on its recent rebound with USD/JPY retreating to beneath the 147.00 handle amid the selling in the dollar and narrowing yield differentials.

FIXED INCOME

• T-notes gained as havens generally caught a bid and with prices also supported after Treasury Secretary Bessent commented that August 1st is a "pretty hard deadline".

COMMODITIES

• Oil prices trickled lower throughout most of the US session as energy-specific newsflow remained, while the focus turns to the weekly inventory data.
• US Private Inventory Data (bbls): Crude -0.6mln (exp. -1.6mln), Distillates +3.5mln (exp. -1.1mln), Gasoline -1.2mln (exp. -0.9mln), Cushing +0.3mln.

GEOPOLITICAL

MIDDLE EAST

• Israeli media quoted a political source who commented regarding the Gaza ceasefire talks and stated "There has been no response from Hamas, there is no agreement on the final issues, and negotiations on the prisoners have not yet begun", according to Iran International.
• Israeli military source told Sky News Arabia that they are currently working on building a list of future targets in Yemen, while they are ready to deal painful blows to the Houthis and have shown their ability in Iran.
• US Treasury issued sanctions on Houthi-linked petroleum smuggling and evasion network, while the sanctions target individuals and entities.
• US State Department said US Special Envoy Witkoff is heading to the Middle East.
• US is to mediate the Israel-Syria meeting on Thursday to avoid new crises, according to Axios.

ASIA-PAC

NOTABLE HEADLINES

• BoJ is likely to leave its benchmark rate unchanged next week and sees little impact from the election on the rate stance, while it is watching for trade talk impact before any hikes and sees upward price risks if there is large fiscal loosening, according to Bloomberg sources.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Reeves said the UK remains reliant on the "goodwill of strangers" with reference to purchases of government bonds and global factors are increasing borrowing costs, while she added that mandating pension funds remains only a reserve power.
• BoE Governor Bailey said they have seen a steeper yield curve but added it is a global phenomenon and that the UK experience is not out of line with other markets.