EU Market Open: Brent a back below $100/bbl, benefitting European equity futures

US and Iran continued to exchange strikes, with CENTCOM conducting a 13th night of attacks on Iranian military targets; US President Trump said Iran wants to reach an agreement but is not yet ready.
Iran reportedly rejected a US ceasefire proposal presented by Iraq’s PM, while Tehran also refused to amend a separate 10-day ceasefire plan linked to discussions over the Strait of Hormuz.
The Trump administration imposed new tariffs of 10%-12.5% on imports from 60 countries over claims that they had failed to prevent forced labour.
APAC stocks followed Wall Street lower, DXY mildly softened, 10yr UST futures remained near contract lows, and crude futures slightly pulled back after Brent rose above USD 100/bbl.
European equity futures indicate a slightly positive cash market open, with Euro Stoxx 50 futures up 0.1%;
Looking ahead, highlights include Global Flash PMIs (Jul), German GfK Consumer Confidence (Aug), UK Retail Sales (Jun), Canadian PPI (Jun), BoE DMP (Jul). Comments from ECB's Lane. Scope Ratings update on Norway.

SNAPSHOT

Click for the Newsquawk Week Ahead.

IRAN CONFLICT

US President Trump posted, "Please let this statement serve to represent, until further notice, that from this point forth, any and all damages done to Ships, Cargo, or anything related thereto, will be paid for by Iranian Money that the United States has in its possession, and controls. These damages may be very substantial but, nevertheless, this is the fair and equitable thing to do."
US President Trump said they are doing very well against Iran and that Iran would like to do something, but isn’t ready yet.
US President Trump is said to be losing patience over an Iran war with no clear end in sight, while he has grown sceptical of diplomacy and is in ‘revenge mode’ against Tehran, according to a senior administration official cited by WSJ.
US President Trump reportedly gave Lebanese President Aoun an ultimatum during the latter's visit to Washington, stating either coordinate and destroy Hezbollah or return to Netanyahu's nightmare, according to IRIB.
US Central Command conducted the 13th night of strikes on Iranian military targets, aimed to hold Iran accountable and diminish threats from the IRGC to commercial shipping. CENTCOM stated that the Strait of Hormuz remains open for transit despite recent attacks from Iran's IRGC, and that commercial vessels continue to freely navigate the strait with US military support. CENTCOM separately commented that it redirected 12 commercial vessels and disabled 1 to prevent ships from entering or leaving Iranian ports or coastal areas.
Iranian media reported explosions in Qeshm, Larak Island and Khorramabad. Explosions were also heard in Bandar Abbas, Omidiyeh, Taft, Shirkuh, Anarak Nain, Jask, Konarak and Ahvaz, while Iran activated air defences in Tehran to counter a hostile threat.
Arab sources report drone and missile attacks from Iran on the Ali Al-Salem base in Kuwait, and explosions were also reported at US bases in Jordan, according to Tasnim.
Iran's Foreign Minister Araghchi said the mindless aggression that the US advocates will only ensure that POTUS pays a heavier price for the deal he's trying to achieve. Araghchi also posted comments from a previous conversation stating Iran's sovereignty over the Strait exists, and nobody denies it, while he added that if they decide to exercise their sovereignty and even close the Strait, they will do it. Furthermore, he said seizing another nation's assets to pay for unrelated future claims is an incendiary precedent and "Those who celebrate or profit from such funds should remember: once governments normalize confiscation, no one's assets are safe. Ensuing chaos will not be pretty or peaceful."
Iraq’s PM was in Tehran carrying a proposal for a ceasefire between Iran and the US, according to NYT, citing Iranian and Iraqi officials. However, it was later reported that Iran rejected the US ceasefire deal presented by the Iraqi leader.
Iran refuses to "improve" the diplomatic proposal currently on the table, which concerns a 10-day ceasefire for the purpose of discussing Hormuz, according to two sources cited by i24NEWS.
Iran’s increasingly precise attacks — including strikes that evaded US air defences and killed American troops last week — are fueling fears inside the Pentagon that Tehran is getting help from US adversaries such as Russia and China, reports NYP.
Israel was awaiting President Trump's decision on both a significant expansion of military operations against Iran and possible Israeli involvement, according to Kann News. Israeli sources said that if Trump authorised an attack, Israel was prepared to proceed and also wanted approval to strike additional targets remaining in the Israeli Air Force's target bank, including energy infrastructure.
Israeli IDF Minister said Israel was preparing for all eventualities and warned Iran would receive a crushing blow if it attacked Israel.
UK said its armed forces were ready to protect the country from any attack after Iran threatened to target British bases used by the US in its war with Tehran.

US TRADE

EQUITIES

US stocks were lower with tech leading the downside following a flurry of earnings, as both Alphabet (GOOGL) and Tesla (TSLA) posted extensive losses. Alphabet was weighed on after it raised its CapEx plans, reigniting concerns around elevated spending among the tech giants, alongside negative free cash flow and further margin pressures. The higher CapEx outlook, however, supported memory names, which stand to benefit from increased tech spending. Meanwhile, Tesla (TSLA) was hit after a profit miss. Adding to the risk-off sentiment was the sharp rally in crude prices amid further geopolitical escalation. The Houthis attacked Saudi Arabian tankers in the Red Sea, and Iran is reportedly refusing to budge on its current proposal for a 10-day ceasefire, while President Trump said he was considering a massive attack greater than anything before and was close to making a decision.
SPX -1.21% at 7,408, NDX -1.87% at 28,455, DJI -0.97% at 51,717, RUT -0.67% at 2,940.
Click here for a detailed summary.

TARIFFS/TRADE

US Trade Representative Greer announced 10%-12.5% new tariffs related to forced labour, with oil, gas, fertiliser and foodstuffs exempted from the labour tariffs, while the tariffs began as the 10% global tariff expired.
US official said the new forced labour tariffs largely track the June proposal, while the countries that implemented a forced labour prohibition get a 10% tariff rate, and those that have not get a 12.5% rate. The new Section 301 tariffs started at 00:01EDT/05:01BST on July 24th, while new tariffs are effective for goods in transit at 00:01EDT/05:01BST on July 28th.
EU's Kallas said the new US tariffs on EU goods are not really grounded, and questioned the forced labour rationale, while she stated the US tariff move is a negative surprise after the EU kept its side of the trade deal. Furthermore, she said the EU was not expecting to be included in new US tariffs and that officials will seek clarifications from Washington on the new tariffs.
Canadian PM Carney said interactions with the US this week show a level of engagement and a breadth of engagement that reflects the seriousness of the trade relationship. Carney said everything is on the table if Canada and US fail to reach a deal on the latest US tariff threats, while he added that Canada has not signed a partial USMCA deal as talks remain focused on critical sectors, with some elements of the discussions expected to run through the end of 2026.
Mexico's President Sheinbaum said Mexico and the US are making progress regarding the USMCA review, while Mexico's Economy Minister Ebrard said that they see no change in the effective tariff that Mexico pays, following the US announcing new tariffs.
Brazil's government rejected the US 12.5% tariffs on Brazilian goods related to forced labour, calling the tariffs completely arbitrary and unjustified, while it will start procedures to use its reciprocity law and will take the matter before the WTO's dispute settlement mechanism.
Japan's Trade Minister Akazawa said the US's latest move on tariffs is regrettable, and confirmed that the US will not go beyond the 2025 tariff deal.

NOTABLE HEADLINES

US Treasury said no major US trading partner manipulated its currency to gain an unfair trade advantage in 2025, while 10 leading trading partners remained on a list for enhanced monitoring of their foreign exchange practices.

APAC TRADE

EQUITIES

APAC stocks followed suit to the losses on Wall Street where the Nasdaq was heavily pressured following Alphabet and Tesla earnings, while sentiment was also weighed on by rising oil prices and yields as geopolitical escalation continues.
ASX 200 retreated with underperformance in tech and miners leading the downside, while the improvement in Australian flash PMIs did little to spur a rebound.
Nikkei 225 fell beneath the 65,000 level with tech stocks heavily pressured and over-represented in the list of worst performers, while inflation data did little to shift the dial and printed in line with expectations.
KOSPI suffered the brunt of the tech selling with sidecars activated on the KOSPI and KOSDAQ.
Hang Seng and Shanghai Comp conformed to the broad downbeat mood with notable pressure in miners and tech stocks.
US equity futures were lacklustre following the tech selling on Wall St.
European equity futures indicate a slightly positive cash market open with Euro Stoxx 50 futures up 0.1% after the cash market closed with losses of 1.7% on Thursday.

FX

DXY took a breather after strengthening yesterday as US yields climbed to fresh YTD highs in the short and belly of the curve, which coincided with the continued sharp rise in oil prices, and with no signs of imminent de-escalation, while the recent USD strength was also likely facilitated by the risk-off tone and after the latest initial claims data, which dropped to the lowest level in almost 60 years. Nonetheless, the dollar has since pared some of the gains, but with the price action relatively muted overnight and with little reaction seen to the US Treasury's FX manipulation report, nor to the announcement of a fresh wave of 'forced labour' blanket tariffs of between 10%-12.5% on dozens of the US's trading partners.
EUR/USD got some slight reprieve after recently suffering against the firmer buck, with the ECB meeting not providing any surprises and largely stuck to the data-dependent, meeting-by-meeting and no-commitment language, despite recent energy upside, while a source report later noted that officials are said to be ready to raise rates again in September.
GBP/USD remained lacklustre following the prior day's retreat but with further downside cushioned by support at the 1.3300 level and with participants looking ahead to UK Retail Sales data.
USD/JPY paused overnight after climbing yesterday to just shy of the 164.00 handle, while there was a muted reaction to the in-line Japanese CPI data and comments from the US Treasury, which stated that yen weakness has persisted despite narrowing of US-Japan interest rate differentials, and excess volatility in the yen is unwanted.
Antipodeans attempted to nurse some losses, albeit with the recovery contained alongside the negative risk sentiment.
PBoC set USD/CNY mid-point at 6.7939 vs exp. 6.7795 (prev. 6.7906)

FIXED INCOME

10yr UST futures were stuck near contract lows after Treasuries were sold off across the curve and yields advanced alongside higher oil prices, while jobless claims fell to a multi-decade low.
Bund futures are off yesterday's worst levels but with the rebound limited amid oil-related inflationary pressures and with a source report suggesting ECB officials are ready to hike rates again in September.
10yr JGB futures remained pressured after trickling lower throughout the week amid higher oil prices and source reports that suggested the BoJ is open to a faster pace of hikes, while the latest Japanese CPI data printed in-line with expectations and showed an acceleration in the headline and core YY figures.

COMMODITIES

Crude futures slightly pulled back after rallying again yesterday, in which Brent climbed above USD 100/bbl amid the ongoing geopolitical escalation in the Middle East, with US President Trump also said to be "considering a massive attack greater than anything before" and was close to making a decision.
OPEC+ was reportedly likely to raise September oil production quotas by around 188k BPD at its August 2 meeting, according to Reuters citing sources.
Spot gold languishes at the prior day's trough after declining alongside higher oil prices and yields.
Copper futures remained subdued amid the broad risk-off mood across global markets.

CRYPTO

Bitcoin gradually edged higher throughout the session to above the USD 65,000 level.

NOTABLE ASIA-PAC HEADLINES

US President Trump said he will discuss AI with Chinese President Xi, who is visiting on September 24th, while he added that the US is leading China and others on AI.
China's Vice Foreign Minister Ma visited the US on July 22nd-23rd and held talks with US Deputy Secretary of State Landau, while they discussed US-China strategic ties.
Japanese Finance Minister Katayama said the US Treasury's FX report cited a US-Japan joint statement that stated excessive FX volatility is undesirable, while she added that Japan and the US are closely communicating 24 hours. Furthermore, she wouldn't comment on specific FX levels, but reiterated they are ready to respond appropriately to currency moves at any time as needed and are ready to take decisive action on FX.

DATA RECAP

Japanese Inflation Rate YY (Jun) 1.7% vs. Exp. 1.7% (Prev. 1.5%)
Japanese Core Inflation Rate YY (Jun) 1.6% vs. Exp. 1.6% (Prev. 1.4%)
Japanese Inflation Rate Ex-Food and Energy YY (Jun) 1.7% vs. Exp. 2% (Prev. 1.8%)

GEOPOLITICS

RUSSIA-UKRAINE

US Senate eyes a vote on a Russia sanctions package next week, according to Axios.

OTHER

China's Coast Guard said it imposed control measures on several Philippine vessels operating "illegally" in the waters around Scarborough Shoal.

EU/UK

NOTABLE HEADLINES

ECB policymakers were set to debate higher reserve requirements, a tiered deposit rate and fees, while Reuters sources said the politically sensitive debate over ECB losses had become increasingly fractious.

DATA RECAP

UK GfK Consumer Confidence (Jul) -17 vs. Exp. -21 (Prev. -23)