US Market Open: NQ underperforms amid STM, GOOGL weakness; AUD outperforms after strong jobs data, EUR looks to ECB

US Secretary of State Rubio said Iran was intending to double missile stockpile and that it looks like Iran is not ready to make a deal. He added that the price on Iran will get higher every night until they come to their senses but that Iran is begging to reach a deal.
Yemeni Houthis targeted two Saudi oil tankers in the Red Sea, while reports noted that at least 9 ships have stopped passing through Bab al-Mandeb, following the blockade on Saudi ports by Houthis.
US equity futures are softer across the board as Alphabet raises AI Capex guidance and STMicroelectronics misses Q3 revenue guidance estimates.
DXY rangebound, AUD outperforms after a strong jobs report.
Fixed income lower but off worst levels as energy prices continue to drive price action (Brent +4.5%).
Looking ahead, highlights include Canadian Retail Sales (May), US Initial Jobless Claims (Jul/18), Chicago Fed National Activity Index (Jun), EU Consumer Confidence Flash (Jul). Policy Announcements from the ECB, CBRT, and SARB. Comments from ECB President Lagarde. Supply from the US. Earnings from Intel, Blackstone, Lockheed Martin & SAP.

EUROPEAN TRADE

EQUITIES

European bourses (STOXX 600 -0.6%) started Thursday's busy earnings day in the red, with higher energy prices and disappointing earnings weighing on indices. On the geopolitical front, the US and Iran exchanged strikes for the 12th consecutive night, while US President Trump said Iran is getting hit so hard and that they want to make a deal. Additionally, Yemeni Houthis targeted two Saudi oil tankers in the Red Sea, while reports noted that at least 9 ships have stopped passing through Bab al-Mandeb, following the blockade on Saudi ports by Houthis.
Sectors highlight the negative bias. Energy (+1.6%) tops the sector pile, with Real Estate (+0.8%) also printing decent gains. Food, Beverages & Tobacco (-2.9%) is the sector laggard, following Nestle earnings in which RIG missed estimates. Consumer Products & Services (-2.0%) and Travel & Leisure (-1.5%) rounds out the key underperformers.
A lot of big European earnings this morning, with focus concentrated on STMicroelectronics figures. Its Q2 metrics beat estimates; however, its guidance and commentary have driven the biggest drop in shares since October 2025 (-13.8%). The Co. guided Q3 net revenue of "about" USD 3.7bln, which missed analysts' expectations, and raised its revenue ambition for data centres due to continued strong demand. Citi analysts say that shares already reflect a recovery across its end markets and acceleration in revenue from data centres. Additionally, analysts say that shares may struggle in the near-term.
US equity futures are softer across the board, with downside in tech-heavy NQ weighed on by STMicroelectronics earnings. Mag-7 earnings kicked off yesterday after the bell, with Alphabet and Tesla reporting Q2 metrics. For GOOGL (-3.9% pre-market), it sharply raised its AI capex forecast (which benefited Asia-Pac chip names overnight). For TSLA (-5.6% pre-market), Q2 figures disappointed, as adj. EPS missed estimates.
Alphabet Inc. (GOOGL) Q2 2026 (USD): EPS 9.11 (exp. 2.88), Revenue 119.8bln (exp. 117.00bln), Operating income 40.77bln (exp. 40.55bln), Capex 44.92bln (exp. 44.15bln). Raises FY26 capex view to USD 195bln-205bln (prev. 180bln-190bln).
Tesla Inc. (TSLA) Q2 2026 (USD): Adj. EPS 0.33 (exp. 0.52), Revenue 28.2bln (exp. 25.99bln), Gross margin 16.8% (exp. 19.4%), Automotive revenue 20.52bln (exp. 18.68bln).
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FX

G10s are mixed after initial losses for the Greenback were reversed as energy prices continue to determine bias. Action which has benefitted energy exporters CAD and NOK, the sole currencies firmer against the Buck.
USD erased earlier modest losses as energy lifted to session highs with the Brent Sept’26 contract approaching levels not seen since May. Geopolitics remains constructive for the Buck, and there are no signs of immediate de-escalation - focus on Houthi attacks on Saudi Arabian vessels alongside flows through Bab al-Mandeb. Elsewhere, US earnings after the NY close were received poorly, with Google and Tesla slipping between 3-5% premarket, hitting indices and potentially increasing appetite for the Buck’s haven status. DXY rose from beneath the 21DMA @101, to mark a high at recent resistance near 101.20/1.
EUR is lacklustre against the Buck ahead of the ECB meeting, where just 4bps of tightening is implied by markets. The Governing Council is likely to convey a hawkish message after the recent energy pressures. Should the bank stand pat on rates as analysts/markets expect, focus will be on guidance which could spur a move above two fully priced 25bp hikes by year-end. EUR/USD is well off highs made early in the domestic session, though found support towards 1.14. ING says this morning its near-term bias is tilted to the downside, noting if Gulf newsflow lacks signs of de-escalation, it looks for the pair to slip towards 1.1380 in the coming days.
AUD is resilient against the Buck after strong jobs numbers overnight. The data saw headline Employment Change smash estimates at 76.3k (exp. 15k), and the Unemployment Rate remained at 4.4% despite higher Participation. It appears NZD is used as a funder to express AUD hawkishness given USD swings on geopolitics, with AUD/NZD +0.4%, while AUD/USD is flat.
TRY looks to the CBRT meeting, where analysts have shifted calls for easing in exchange for a hold amid the recent energy pressures. Turkish inflation eased to 32.1% Y/Y in June from 32.6% in May, as energy prices fell following the US-Iran MoU, which has since broken down. Despite the softer print, most analysts still forecast year-end inflation above the CBRT’s 26% target (incl. GS, MUFG at 30%), suggesting rates will remain higher for longer, particularly after the recent resurgence in Gulf tensions. Banks mostly expect the bank to stand pat on its key rate; HSBC said it could instead adjust its funding policy, lowering the average funding cost for commercial banks without formally changing the policy rate; JPMorgan expects the CBRT to resume one-week repo auctions, while Garanti BBVA, which recently shifted its call, expects a hold, but does not rule out easing. USD/TRY is lacklustre ahead of the decision.

FIXED INCOME

A bearish start for fixed income as energy climbed overnight and into the European morning after the 12th consecutive evening of action by the US in the Middle East. Action that has taken Brent above USD 98/bbl and weighed on global yields.
Overnight, JGBs reacted to the above and also a Reuters source report from Wednesday that the BoJ is alert to inflationary risks that could result in tightening taking place faster than the market is pricing. JGBs down to a 127.04 base, lower by just over 20 ticks.
USTs hold at a 108-09 low, with downside of just a few ticks on the day. Today’s docket features weekly claims (initial claims coincide with the BLS survey window), before a 10yr TIPS auction and the latest Chicago Fed.
Bunds under pressure as above, down to a 124.17 base at worst but currently holding around 15 ticks clear of that but still lower by over 20 ticks on the day. Action that has pushed the 10yr yield to a 3.2% peak, just above May’s best to a new YTD high, a dynamic that is also reflected at the short-end, where the 2yr has notched a new YTD peak of 2.88%.
Energy has driven much of this, but the short-end is also likely being spurred further by the associated implications for the ECB. While a hold is the base case today, the accompanying guidance may well be more hawkish and explicit than the usual no-signal, data-dependent and meeting-by-meeting approach we have become accustomed to. Note, given the moves in recent days, more hawkish guidance may only spark a modest hawkish reaction, while a reiteration of the above non-committal language could see a relatively more pronounced dovish move. However, again, any such reaction would likely be limited in nature as geopolitics and, by extension, energy dictate the narrative.
Gilts opened lower and underperformed, in the typical action seen when energy is bid. Opened with losses of 15 ticks and then slipped to an 86.07 base, just above the 86.03 low from April but some way clear of May’s 84.98 contract trough. No real reaction to commentary from UK Chancellor Healey this morning, who stuck with familiar language. The day ahead for UK rates may take direction from the ECB as outlined above, as any hawkish nod from Europe would be in contrast to the on hold for the foreseeable narrative which remains around the BoE, despite the dissenters and clearly contrasting views on Threadneedle Street.

COMMODITIES

Middle Eastern geopolitics continues to dominate price action, with the US and Iran exchanging strikes for the 12th consecutive night, whilst US President Trump said Iran is getting hit so hard and that they want to make a deal. He added that Iran will be ready very soon but is not ready for a deal yet. Hostilities across the region have also expanded, as Yemeni Houthis targeted two Saudi oil tankers in the Red Sea, while reports noted that at least 9 ships have stopped passing through Bab al-Mandeb, following the blockade on Saudi ports by Houthis. On that note, Pakistan's Foreign Ministry, on the Yemeni Houthi threat, said, "If our ships are attacked, it will be treated as an attack on Pakistan, and we will retaliate”. As a reminder, Pakistan and Saudi Arabia signed a mutual defence pact in September 2025. The treaty states that an attack on one nation is considered an attack on both. If the Houthis launch severe ballistic missile strikes on Saudi territory or fully disrupt its vital energy exports, Riyadh could formally trigger this pact. This could further complicate the picture as Pakistan is the main mediator in US-Iran talks. Further on this front, Pakistani PM Sharif held a call with Saudi Crown Prince MBS; the two condemned the Houthi militia’s attacks against Saudi oil tankers in the Red Sea; and reaffirmed Pakistan's "complete solidarity" with Saudi Arabia. Elsewhere, reports noted the sound of an explosion was heard in Qatar and Jordan, whilst an explosion was also heard in Iran around Qeshm city near Konarak. Elsewhere in geopolitics, US Secretary of State Rubio said he had a good and frank conversation with the Russian Foreign Minister; the US is prepared to take a constructive role to end the war in Ukraine. Meanwhile, EU Ambassadors have reached a political agreement on the 21st sanctions package against Russia, according to diplomats; additionally, the bloc is to freeze the oil price cap for a 12-month period.
WTI and Brent futures at session highs. WTI Sep’26 trades beyond the USD 90/bbl mark, currently at the top end of its USD 87.32-90.35/bbl range. Brent Sep’26 resides near USD 98.50/bbl in a USD 94.89-98.75/bbl range. Dutch TTF prices have waned after hitting resistance near EUR 64/MWh before dipping sub-62.50/MWh. This morning, sources reported that buyers of LNG from Qatar and the UAE are seeking lower prices and stronger supply guarantees as risks to shipments through the Strait of Hormuz increase.
Precious metals are softer as rising oil prices once again hit by the rising oil prices. Spot gold trades in a USD 4,087-4,141/oz range, within yesterday’s USD 4,076-4,166/oz range. Spot silver briefly dipped under yesterday’s 58.73/oz low to currently trade towards the bottom end of a USD 58.66-60.07/oz range.
Base metals are mostly lower amid the inflationary impact of higher oil prices. 3M LME copper trades towards the lower end of a USD 13,709.00-13,873.70/t range.
Buyers of LNG from Qatar and the UAE are seeking lower prices and stronger supply guarantees as risks to shipments through the Strait of Hormuz increase, according to sources.
Kazakhstan's daily oil production fell after loading operations were suspended at the CPC export terminal on the Black Sea, sources say, output down 21% on Wednesday vs July average

TRADE/TARIFFS

China's MOFCOM said China and the US are working towards the tariff cut plan; to maintain close communication.
UAE Foreign Trade Minister said imports of high-end US AI chips expected soon, Bloomberg reported.

NOTABLE EUROPEAN HEADLINES

The UK PM announced that pubs, clubs and live music venues are set to receive a 20% cut to their business rates bills, saving the typical pub an estimated GBP 1,100/yr.
UK Chancellor Healey said he is as concerned about the cost of business as the cost of living.

NOTABLE US HEADLINES

US President Trump said the government will face a shutdown in September.
Some Trump admin officials and allies have privately discussed whether an external review of the 2023 failure of Silicon Valley Bank could provide a legal basis to remove Fed Governor Barr, according to Bloomberg.
US is investigating Chinese AI firm Moonshot over chip access, with the BIS probing if the Co. used US chips for model training, according to The Information.
Trump admin is reportedly divided about restricting Chinese AI models, with the White House mulling preventing Chinese labs from distilling US models, and Commerce Department favours incentivising US companies to develop open models to counter China

GEOPOLITICS

MIDDLE EAST

US Secretary of State Rubio said Iran was intending to double missile stockpile and that it looks like Iran is not ready to make a deal. He added that the price on Iran will get higher every night until they come to their senses but that Iran is begging to reach a deal.
US CENTCOM said the US completed the 12th consecutive night of strikes against Iran, in which the US struck Iranian military targets including maritime capabilities, missile and drone storage facilities, surveillance sites and defence assets.
US military has started using B-1 long-range bombers in its strikes against Iran, according to i24's Stein citing a source that stated the first strike using the bomber was conducted on Tuesday.
A senior US official said negotiations continue but the decisive moment for expanding hostilities is rapidly approaching, N12 reported.
There were several explosions heard in Kuwait, Qatar and Jordan while sirens were sounded in Bahrain. In Iran, explosions were heard in Bushehr, Bandar Mahshahr, Sirik, Konarak City and Ramshir. Additionally, Iranian media reported that a power station was hit by a missile near the Bushehr nuclear power plant in the south of the country, according to Sky News Arabia.
IRGC said one of three offending ships attempting to pass the Strait of Hormuz caught fire and the other two quickly turned back, while it also targeted US bases in Jordan, and declared the Strait of Hormuz closed. Additionally, the IRGC said it targeted US military in Kuwait's Al-Adiri camp and Ali Al-Salem Airbase.
Yemen's Houthis announced they targeted two Saudi oil tankers in the Red Sea. In other reports, at least 9 ships have stopped passing through Bab al-Mandeb, following the blockade on Saudi ports by Houthis.
Two Chinese supertankers carrying Saudi crude are heading to Bab al-Mandeb, according to reports citing data.
Pakistani PM Sharif held a call with Saudi Crown Prince MBS. The two condemned the Houthi militia’s attacks against Saudi oil tankers in the Red Sea and reaffirmed Pakistan's "complete solidarity" with Saudi Arabia.
Pakistan's Foreign Minister, on US-Iran talks, said they can not confirm 10-15 days or anything because these are confidential communications but they have not lost hope even during the darkest days of this escalation cycle.
Pakistan's Foreign Ministry, on the Yemeni Houthi threat, said that if Pakistani ships are attacked, it will be treated as an attack on Pakistan and will retaliate.
UKMTO said it received a report of an incident 70NM of Al-Shuqaiq, Saudi Arabia, with a tanker reported to have been struck by an unknown projectile, causing a fire on board.
Oman’s Foreign Ministry said it is working with Saudi Arabia and Yemeni parties and the UN special envoy to resume the political process aimed at achieving regional security and stability.
The US is on course to get no new military spending before the election and they are warning it could be a huge problem for them amidst the war with Iran, according to Semafor.

RUSSIA-UKRAINE

US Secretary of State Rubio said he had a good and frank conversation with the Russian Foreign Minister and the US is prepared to take a constructive role to end the war in Ukraine.
Russia's Foreign Minister Lavrov confirmed that Russia is prepared to resolve the conflict in Ukraine through political and diplomatic means, according to the Russian Foreign Ministry.
EU Ambassadors have reached a political agreement on the 21st sanctions package against Russian, according to diplomats. Additionally, to freeze the oil price cap for a 12 month period.

OTHER

China is conducting live fire, military drills in some areas of the Taiwan Strait on Thursday and Friday.

CRYPTO

Bitcoin continues to pare back Tuesday's gains but remains firmly above the USD 65k mark.

APAC TRADE

APAC stocks were predominantly in the green as semiconductor strength helped the region shrug off the lacklustre lead from Wall Street and the widening geopolitical escalation in the Middle East.
ASX 200 was lifted amid outperformance in the commodity-related and materials sectors, while sentiment was also helped by strong jobs data.
Nikkei 225 rallied at the open but is well off today's best levels amid higher oil prices and after hitting resistance around the 67,000 level.
KOSPI remained driven by semiconductor advances with both Samsung Electronics and SK Hynix in the green, while chaebols dominated the list of biggest gainers and participants also digested stronger-than-expected South Korean GDP data.
Hang Seng and Shanghai Comp were mixed, with Hong Kong led higher by strength in mining names, while the mainland was lacklustre as trade-related frictions lingered, with the US investigating Chinese AI firm Moonshot over chip access and whether the Co. used US chips for model training.

NOTABLE APAC DATA RECAP

Australian Employment Change (Jun) 76.3K vs. Exp. 15K (Prev. 40.3K).
Australian Unemployment Rate (Jun) 4.4% vs. Exp. 4.4% (Prev. 4.4%).
South Korean GDP Growth Rate QoQ Adv (Q2) Q/Q 0.6% vs. Exp. 0.5% (Prev. 1.8%).
South Korean GDP Growth Rate YoY Adv (Q2) Y/Y 3.7% vs. Exp. 3.3% (Prev. 3.8%).