US Market Open: US equity futures weaker in quiet trade ahead of PCE and NVIDIA earnings

Iran's Deputy Foreign Minister Gharibabadi details a temporary arrangement between Iran and Oman concerning the Strait of Hormuz while asserting that reopening of the waterway hinges on the realisation of Tehran's demands, according to Press TV.
European bourses are mildly firmer; Intuit -11% after disappointing guidance.
USD firms against most G10s, particularly vs. high beta, though AUD and JPY lead after data.
Fixed benchmarks are mixed with USTs off by a couple of ticks, whilst Bunds and Gilts move higher.
Crude futures continue to soften amid positive, unconfirmed US-Iran reports.
Looking ahead, highlights include US Durable Goods (Jul), PCE (Jul), GDP 2nd Estimate (Q2), Atlanta Fed GDP (Q3). Supply from the US. Earnings from NVIDIA, Salesforce & CrowdStrike.

LOOKING AHEAD

Highlights include US Durable Goods (Jul), PCE (Jul), GDP 2nd Estimate (Q2), Atlanta Fed GDP (Q3). Supply from the US. Earnings from NVIDIA, Salesforce & CrowdStrike.
Click here for the Week Ahead preview

EUROPEAN TRADE

EQUITIES

European bourses (STOXX 600 +0.1%) are mostly firmer this morning, but with gains only modest in nature. The market remains clouded by ongoing geopolitical uncertainty, with traders awaiting the much-anticipated Nvidia earnings.
European sectors hold a slight positive bias. Consumer Products takes the top spot, joined closely by Basic Resources and Travel & Leisure. It appears to be the case that the cyclical sectors are benefiting the most in today’s session, aside from the Tech sector, which is the laggard. The latter is subject to pressure on three fronts: 1) SAP (-4%) received a downgrade at UBS. 2) Broader European software names drift, in a continuation of the action seen on Tuesday after Google announced Gemini Enterprise for financial services. 3) Poor Intuit results.
Key stories: Banco BPM (+0.3%, acknowledges the unsolicited offer from MPS), SoftwareOne (+15%, H1 rev. beat), Ambu (-16%, decent headline metrics, but guidance downgraded).
FTSE 100: Indicative FTSE 100 quarterly review changes show easyJet and Ithaca Energy are set to join, with Entain and Persimmon to be removed.
US equity futures (ES -0.1% NQ -0.2% RTY +0.1%) are trading mixed this morning, but ultimately trade on either side of the unchanged mark. There is some mild underperformance in the NQ this morning, dragged by pre-market losses in Intuit (-11%). The Co. reported strong quarterly earnings, but the outlook disappointed. Focus for today will be on a busy US data slate, which includes PCE and GDP 2nd Estimate.

FX

G10s show mixed performance with AUD and JPY leading after data, while high-beta currencies mostly lag but sit within yesterday’s ranges.
USD attempts to rebound today with broad based strength against high-beta cyclicals but weakness vs. Aussie and Yen after respective strong domestic data overnight. DXY attempts to rebound after modest losses on Tuesday, but remains within yesterday’s 98.86-99.11 range for now with macro catalysts light into PCE and NVIDIA earnings today.
EUR is resilient to the modest USD strength with the pair flat today; action which comes after the influential ECB’s Schnabel said the “economy looks to be gaining further momentum.”, which ING suggests “should cement expectations for a 25bp rate hike” in September. EUR/USD lost steam at 1.1680 which has proven resistance over the past few days following a brief period above 1.17 last week. GBP tracks the weaker Buck with Cable continuing to range trade above 1.3620; the Ofgem price cap is to be lifted by 4% from October 1st as expected, while Cornwall insight sees a further 9% rise in January, unwelcome news for UK Policymakers.
AUD is the G10 outperformer after Aussie CPI beat estimates, remaining above the RBA’s 3% upper inflation target with the RBA’s preferred measure, trimmed mean, unchanged at 3.6% Y/Y above expectations of 3.5%. Unwelcome news for the RBA where a hike in either Sept/Nov are not yet fully priced by markets; banks remain split on this matter with Westpac and UoB saying a November hike could be in play though others shifting calls towards November, while OIS for September doubled from 3 to 6bps. AUD/USD +0.3% on the day, the pair could look towards 0.72, a level briefly eclipsed in May, should pricing turn more hawkish. MUFG notes the risks are starting to shift to a stronger Aussie but cautions positioning is starting to look stretched, referencing the 2yr AU-US swap spread. JPY similarly outperforms after hot Services PPI data from Japan, USD/JPY around 159.00.

FIXED INCOME

A contained to modestly firmer start for fixed. USTs and Bunds are slowly inching their way back towards Tuesday’s best, but remain around five and 30 ticks shy, respectively. Gilts differ slightly, in that they opened within reach of Tuesday’s 87.15 best, but have since eased and lost the figure, though still post relative outperformance.
Today’s docket is headlined by US PCE, though any further updates to the geopolitical developments we saw late-Tuesday could ultimately overshadow. For PCE, the core M/M is seen at 0.2% (prev. 0.1%), which would be in-fitting with the CPI print. Data will help inform the Fed debate, with the inflation-side of the mandate still very much in the driving seat; however, near-term Fed bets may not shift dramatically ahead of Friday.
For reference, current Fed pricing via CME has around a 64% implied probability of unchanged in September, and around a 30% chance of unchanged by end-2026, with a 45% chance currently to one hike by the end of the year.
Bunds firmer but, as discussed, shy of Tuesday’s best. Currently holding in the green with gains of around 15 ticks, but a similar amount shy of the 124.65 peak. No move this morning to ECB’s Schnabel, who in a Bloomberg interview stuck to her known hawkish-bias, while noting the ECB’s data-dependent language. On supply, the 2048 Bund auction was well-received, but likely due to the low amount on offer. No move was seen following the auction.
Gilts marginally outperform, but are also off best. Note, coverage remains on the September contract for now, but increasingly activity is turning to the December one, as a way of fully encapsulating what could be a significant September BoE meeting given the bond update that is due, in addition to the first budget of the Burnham government thereafter.
Italy sold EUR 3.0bln vs exp. EUR 2.5-3.0bln 3.00% 2028 BTP: b/c 1.58x & average yield 3.02%.
Japan sold JPY 649bln in 10yr, 20yr and 30yr JGBs in enhanced liquidity auction; b/c 3.20 vs. Prev. 2.68. Highest accepted spread -0.011% vs. Prev. +0.004%. Allotment of bids at highest spread 58.2741% vs. Prev. 87.6152%.

COMMODITIES

In geopolitics, much of the recent US-Iran reporting has tilted positive, albeit remaining unconfirmed by either side. Yesterday, Russian press RIA citing Pakistani and Iranian sources suggested “A ceasefire between the US and Iran has been agreed upon, it includes free navigation in the Strait of Hormuz and will be announced in the coming days”, albeit with no further details. For references, the formal 60-day ceasefire window officially expired in mid-August 2026, albeit hostilities have been minimal since. On the flip side, rhetoric from Iran has been more steadfast with the Iranian side suggesting, that east of the Strait of Hormuz, north of the Indian Ocean, the Arabian Sea, and the Oman Sea are under their operational control.
WTI Oct and Brent Nov futures are softer by over 2% apiece at the time of writing, with desks citing ongoing optimism surrounding Iran and the US. Brent trades within a USD 84.56-85.99/bbl (vs yesterday’s USD 80.23-85.84/bbl range) range and WTI in a USD 79.62-81.31/bbl (vs yesterday’s USD 85.00-91.29/bbl range). Dutch TTF also pulls back amidst this optimism, clocking losses of over 3% intraday at the time of writing, with the front month contract back under EUR 64/MWh vs ~EUR 69/MWh earlier this week.
Precious metals are softer as the DXY remains resilient to the lower oil prices. Spot gold trades in a USD 4,627-4,622/oz range, within yesterday’s USD 4,605-4,697/oz parameter. Spot silver resides in a narrow USD 68.20-69.73/oz range, finding support near its 100 DMA (USD 68.32/oz) and within yesterday’s USD 67.45-69.95/oz range. Base metals are flat as the resilient Dollar is countered by ongoing Chinese stimulus hopes, with 3M LME copper in a USD 14,321.13-14,437.40/t range at the time of writing.
Shipping data shows Tankers loaded 4mln barrels of Saudi Crude in ship-to-ship transfer off Oman; cargoes heading for China.
Japan's Cabinet office confirms plans to diversify oil procurement; aims to provide support with extra shipping costs.
Russia's Novorossiysk grain terminal restoration may take between 1-4 months following suspension in August, according to reported.
Five commodity vessels pass through the Strait of Hormuz on Tuesday which is significantly below the 10-day average of 15, according to data.
South Korea plans to cut industrial power rates by up to 10% on the new regionally differentiated pricing scheme, according to Yonhap.
China's Ministry of Agriculture and Rural Affairs issued the 15th Five-Year Plan for the national farm-product origin market system, targeting improved supply–demand matching and a modern circulation network. China is to largely complete modern farm-produce origin market system by 2030.
US Weekly Private Inventory Data (bbls): Crude +4.2mln (prev. -0.3mln), Gasoline -3.2mln (prev. +1.1mln), Distillate -0.5mln (prev. -2.8mln), Cushing +1.0mln (prev. -1.4mln).

TRADE/TARIFFS

US President Trump's administration is discussing additional trade penalties against Canada after Canada unveiled dollar-for-dollar retaliation, according to Bloomberg.

NOTABLE EUROPEAN HEADLINES

UK PM Burnham looks at giving mayors in England the authority to suspend the “right to buy” policy and block the sale of council homes, according to FT.

NOTABLE EUROPEAN DATA RECAP

UK Ofgem energy price cap to increase by 4% from October 1st (exp. 4%), driven primarily by the Middle East.
Swedish PPI (Jul MM) 0.1% (Prev. 0.1%).
Swedish PPI (Jul YY) 6.4% (Prev. 7.4%).

NOTABLE EUROPEAN EQUITY HEADLINES

POLITICO expects UK Energy Secretary Fahnbulleh to "stick to the script" on whether to allow new North Sea drilling.

CENTRAL BANKS

Fed's Barkin (2027 voter) described the July rate decision as a close call and said officials will receive another full set of data prior to the September 15th-16th meeting. said:. Latest trade dispute with Canada was adding to uncertainty regarding how tariffs will affect prices and economy.
Fed's Barkin (2027 voter) said there will eventually be a reckoning of US debt and debt will reach a point when investors will stop buying if it continues to rise.
BoJ Governor Ueda will not attend this week's Jackson Hole meeting, with Board Member Tamura to attend on Ueda's behalf.
Major newswire poll shows 57% of economists expect the BoJ to hike its interest rate to 1.25% at the September meeting, while a slim majority of economists see the BoJ hiking rates to at least 1.5% in Q1 2027.
ECB's Schnabel said rates must increase further on inflation risks and ECB must prevent second round effects early on, Bloomberg reported.
PBoC set USD/CNY mid-point at 6.7829 vs exp. 6.7166 (prev. 6.7852).

NOTABLE US HEADLINES

Darlene Graham wins South Carolina Republican primary runoff for US Senate, according to DDHQ projection.

GEOPOLITICS

RUSSIA-UKRAINE

Ukrainian President Zelenskiy said that they struck 16 targets inside Russia in the past day, which involves oil facilities and logistics centres.
Russia's Novorossiysk grain terminal restoration may take between 1-4 months following suspension in August, according to reported.
Ukrainian President Zelensky said he is counting on China's strong diplomatic role in ending Russia's war against Ukraine, while he added that peace can be our shared achievement.
Russian President Putin advisor said Japan only needs one year to possess a nuclear weapon, according to Al Arabiya.

MIDDLE EAST

Iran's Deputy FM Ghalibaf refiles a post, which said,"Based on negotiations with Oman, the southern route will be completely closed, if Iran's requirements are not met".
Iranian President Pezeshkian and Russian President Putin will meet on the sidelines of the upcoming Shanghai Cooperation Organization summit in Kyrgyzstan (31st Aug-1st Sep), Iran International reported.
Iran and Oman outlined a joint proposal for a temporary shipping lane and launch a demining effort in the Strait of Hormuz, according to CNN.
Iran's Deputy Foreign Minister Gharibabadi details temporary arrangement between Iran and Oman concerning the Strait of Hormuz while asserting that reopening of the waterway hinges on realisation of Tehran's demands, according to Press TV.
Iran official said only Tehran knows Hormuz mine locations, reported Fars.
Iran Deputy FM Gharibabadi said understanding with Oman on the Strait of Hormuz does not mean opening the Strait of Hormuz. Before taking any action to reopen the Strait of Hormuz, the US must fully implement all its violated commitments. In the understanding with Oman, the route into the strait is completely at our disposal, and part of the exit route is also in Iranian waters; also, the distance between the two routes is not long. US minesweepers are very good targets for us if they enter the region. If US goes ahead with its new sanctions against Iran, Iran will divulge new measures against US interests.
Iranian Army said areas east of the Strait of Hormuz, north of the Indian Ocean, the Arabian Sea, and the Oman Sea are under our operational control, Al Jazeera reported. Iranian military said ships are under our surveillance hundreds of kilometers before they reach the Strait of Hormuz and can cross if they get our permission.
Iranian Army Spokesperson Akraminia said in a possible future war, new issues could be raised, such as regional energy infrastructure.
US President Trump sends nuclear agreement with Saudi Arabia to Congress, while he still insists the agreement is contingent on Saudi Arabia normalising relations with Israel, according to WSJ.
US Secretary of State Rubio told foreign counterparts the US is shifting from strikes to sanctions on Iran and that for the time being, US is not expected to initiate new strikes against Iran, according to a US official and a second source cited by Axios. "U.S. officials say the clearing of mines from most of the Strait of Hormuz, coupled with the fact that more and more tankers have been moving through the southern lane of the strait in recent weeks, significantly reduces Iran's leverage over global energy markets.".
Houthi military leader states "We reaffirm our unwavering commitment to our principled and faith-based stance in support of the oppressed Palestinian people and their just cause, which is the cause of the entire nation". said:. "- We will spare no effort in supporting the Palestinian people and their resistance fighters until the inevitable divine promise of the fall of the Zionist entity is fulfilled.".
US Ambassador to Lebanon said "there is progress in the pilot areas, but what is on paper requires time for implementation", Al Hadath reported.
IRIB news agency noted Palestinian sources report that Israeli forces raid two other settlements in the West Bank.
Israeli force of 10 vehicles stormed the village of Jamla in the Daraa countryside in Syria.
Israeli forces strike targets in multiple areas in southern Lebanon.
Israeli PM Netanyahu said it is not possible to reach a diplomatic agreement with Iran.

OTHERS

China's military said naval and air forces conducted routine patrol in South China Sea on August 21st-25th.

CRYPTO

Bitcoin is a little lower this morning after facing resistance at USD 80k; Ethereum holds below USD 2.5k.

APAC TRADE

APAC stocks were mostly in the green following the gains on Wall Street, where sentiment was underpinned amid Strait of Hormuz optimism, lower oil prices and a drop in yields, while participants await NVIDIA earnings.
ASX 200 traded lower following another deluge of earnings releases and hotter-than-expected CPI data, while Construction Work disappointed with a surprise contraction, feeding into next week's GDP release.
Nikkei 225 declined at the open following the firmer-than-expected Services PPI data, but then gradually rebounded and returned to above the 66,000 level.
KOSPI saw two-way trade, but ultimately outperformed, with the price moves in the index largely driven by tech heavyweights, which were initially choppy.
Hang Seng and Shanghai Comp were underpinned as participants digested a deluge of earnings, and with Alibaba shares supported after its founder Jack Ma bought more than HKD 600mln of the Co.’s Hong Kong-listed shares over two consecutive days, signalling confidence in its long-term AI prospects.

NOTABLE ASIA-PAC HEADLINES

Japanese PM Takaichi said they are considering incentives for firms to diversify fuel sources.
Japan's Ministry of Justice has finalised its request of over JPY 80.7bln in its budget estimate, which is more than double this year's initial budget, NHK reported.
Japan's Economy Minister Kiuchi said expect CPI to gradually rise due to conditions in the Middle East.
Shinhan Financial Group (055550 KS) and Visa (V) signed a strategic partnership to test stablecoin issuance, remittances, redemption and card settlement, while jointly developing AI-powered payment models for South Korea.
Japan Atomic Energy Agency and others have developed technology that can extract rare-earth elements from water and oil, reported Nikkei.

NOTABLE APAC DATA RECAP

Australian CPI (Jul MM) 1% vs. Exp. 0.8% (Prev. -0.1%).
Australian CPI (Jul YY) 3.5% vs. Exp. 3.3% (Prev. 3.8%).
Australian RBA Weighted Median CPI (Jul MM) 0.4% (Prev. 0.3%).
Australian RBA Trimmed Mean CPI (Jul MM) 0.5% vs. Exp. 0.3% (Prev. 0.3%).
Australian RBA Trimmed Mean CPI (Jul YY) 3.6% vs. Exp. 3.5% (Prev. 3.6%).
Australian RBA Weighted Median CPI (Jul YY) 3.6% (Prev. 3.7%).
Australian Construction Work Done (Q2 QQ) -2.1% vs. Exp. 0.5% (Prev. 3.4%).
Australian Westpac Leading Index (Jul MM) 0.0% (Prev. 0.0%, Rev. 0.1%).
Japanese Services PPI YY (Jul) 3.6% vs Exp. 3.2% (Prev. 3.2%, Rev. 3.4%).