• Gulf Foreign Ministers plan to meet with their Iranian counterpart in an effort by Oman and Iran to secure a deal on shipping through the Strait of Hormuz, according to FT.
• Saudi Crown Prince MBS called President Trump twice on Thursday, urging him to launch strikes against Houthis, but Trump declined.
• IEA OMR sees 2026 world oil demand falling more than prior due to the impasse in US-Iran talks.
• US equity futures are bid; Oracle shares gain after a strong earnings report.
• DXY flat heading into US CPI; G10s are mixed against the USD.
• Fixed income benchmarks stabilise following Thursday's selloff; Gilts little moved after upbeat growth figures.
• Energy benchmarks fall on hopes of a Hormuz deal.
• Looking ahead, highlights include US CPI (Aug), US University of Michigan Survey Prelim (Sep), CBR Announcement. Speakers include ECB’s Lagarde & Lane. Earnings from Kroger.

SNAPSHOT

STOCKS
Euro Stoxx 50	+0.6%	DAX40	+0.4%
Stoxx 600	+0.4%	FTSE 100	+0.5%
ES Sep'26	+0.5%	RTY Sep'26	+0.6%
NQ Sep'26	+0.6%	YM Sep'26	+0.5%

FX
DXY	U/C (99.13)	EUR/USD	-0.1% (1.1600)
USD/JPY	-0.2% (154.16)	GBP/USD	U/C (1.3508)

BONDS
US T-Note Dec'26	+1 tick	Bund Dec'26	-1 tick
US 10yr Yield	4.942%	German 10yr Yield	3.508%

ENERGY & METALS
WTI Oct'26	-2.4%	Brent Nov'26	-2.8%
Spot Gold	+0.7%	LME Copper	-0.2%

CRYPTO
Bitcoin	+0.8%	Ethereum	+1.5%

As of 10:40BST / 05:40EDT

EUROPEAN TRADE

EQUITIES

• European bourses are modestly firmer this morning (STOXX 600 +0.4%), benefiting from falling energy prices and cooling yields. For the UK specifically, the FTSE 100 (+0.5%) is largely unreactive to a strong GDP reading for July. But ultimately it will have little impact on the BoE next week, which is expected to keep rates on hold.
• European sectors hold a slight positive bias. Banks, Insurance and Telecoms form the top three; Tech, Basic Resources and Chemicals underperform.
• US equity futures (ES +0.5% NQ +0.6% RTY +0.6%) are firmer this morning, following the sentiment seen across Europe. The ES from strong Oracle (+6.9%) results. It reported a beat on headline metrics, with cloud infrastructure revenue impressing. Elsewhere, Adobe (-2.8%) moves a bit lower in the pre-market despite raising annual revenue; Morgan Stanley sees limited inflection evidence.
• Click for the sessions European pre-market equity newsflow
• Click for the additional news

FX

• Snapshot: G10s are mixed against the USD this morning. NZD is the clear outperformer, as traders increased their bets of further hikes at the RBNZ, with markets now pricing in four hikes at the Bank. Elsewhere, the CHF lags a touch.
• USD is steady and trades within a 99.00 to 99.17 range. Thursday saw the release of a mixed PPI report, which ultimately spurred little reaction in the USD. But the Dollar did strengthen in the prior session on account of higher yields. Focus today is solely on the CPI report, which will be a decisive factor into the Fed policy meeting next week. A benign report showing continued progress on underlying inflation would strengthen the case for the Fed to remain on hold, particularly given Waller's stated reaction function. Conversely, a hot report or evidence that disinflation is reversing would likely reinforce expectations for a 25bp hike.
• EUR is flat this morning and holding within a 1.1595 to 1.1617 range, in the aftermath of the ECB policy decision on Thursday. Thereafter, ECB source reports suggested that officials expect more tightening this year, with the debate potentially as soon as October. As such, sell-side banks have broadly pulled forward their bets of another hike at the ECB; the likes of Citi, Barclays and UBS see another round of tightening in December. Interestingly, Danske Bank believes that the Bank will deliver two 25bps hikes, each in October and December.
• JPY is slightly firmer this morning, with USD/JPY holding around 154.20, in a 153.96 to 154.61 range. Overnight, a Reuters source report reiterated that the BoJ will raise rates next week, and potentially signal its readiness to speed up hikes. The report, alongside some scaling back of the pressure seen in the prior session, has helped the Yen this morning. The next hurdle for the currency will be US CPI, where a hot report will likely see yield differentials widen once again.
• GBP is currently flat, but did see some mild upside following a strong GDP report earlier. In July, the UK economy grew 0.4% (exp. 0.00%), largely thanks to a boost in AI. While the data signals economic resilience, it is unlikely to alter expectations for next Thursday’s BoE policy decision. It does, however, provide the MPC’s hawks with ammunition to argue for tighter policy.

FIXED INCOME

• Global fixed income benchmarks have steadily climbed off earlier lows, as energy prices ease off best levels.
• USTs (+1 tick) reside at the upper end of its 106-04+ to 106-14+ range, with the US CPI on the docket later today. Yields remain towards elevated levels (US 10yr 4.94%), and a hot inflation report today will likely give the 10-year enough of a reason to breach the 5.00% mark; a level not seen since Oct’23.
• Bunds (-1 tick) pare some of Thursday's losses, with the 10yr yield holding around 3.50% in the aftermath of the ECB policy meeting and the surge in energy prices. To recap, the ECB meeting was largely as expected, with nothing to significantly shift market pricing as we await further data and energy developments. Thereafter, ECB source reports suggested that officials expect more tightening this year, with the debate potentially as soon as October.
• Gilts (+28 ticks) opened slightly higher, in line with their peers. Strength which comes amidst cooler energy prices, though despite a strong UK GDP report. The UK economy continues to show resilience despite higher energy prices, with July GDP printing at 0.4% (exp. 0%) while the 3-month average also held steady at 0.4% (exp. 0.3%). Manufacturing and industrial production figures were also solid. This set of data is unlikely to change expectations for the BoE rate decision next Thursday.
• Australia sells AUD 800mln 2.75% November 2029 bonds: b/c 4.47x, avg. yield 5.0396.

COMMODITIES

• WTI and Brent futures pull back slightly following a week of hefty gains on the back of escalating geopolitics. The downside today comes amid reports that Iran and Gulf states are planning to meet, pushing to iron out a deal for the Strait of Hormuz. Moreover, sources suggested Iran’s Foreign Minister and Pakistan’s Army Chief reportedly discussed ways to restore diplomatic efforts to de-escalate the conflict on all fronts. Talks reportedly focused on the US-Iran war, the possibility of returning to negotiations and Houthi attacks on Saudi Arabia. Modest downside was seen in crude prices after the IEA slashed its 2026 world oil demand forecast.
• WTI Oct resides in a USD 99.50–104.46/bbl range (vs yesterday’s USD 95.37–104.04/bbl range) compared to Monday’s USD 90.87–94.73/bbl range. Brent Nov trades in a USD 103.85–109.97/bbl range (vs yesterday’s USD 100.19–109.68/bbl range) and compared to Monday’s USD 95.97–98.06/bbl band. Dutch TTF has also pulled back from EUR 83/MWh intraday extremes before finding support just under EUR 80/MWh, oscillating on either side of the level. It’s also worth noting that US diesel prices hit a record USD 6.06 per gallon, with California approaching USD 8 per gallon.
• Metals are mixed, with precious metals cheering a slight pullback in oil prices, whilst base metals remain capped amid elevated energy levels. Spot gold trades on either side of its 100 DMA (USD 4,336/oz) in a current USD 4,300-4,361/oz range (vs USD 4,433/oz weekly high). 3M LME copper resides in a narrow USD 14,170.78- 14,356.00/t range at the time of writing.
• IEA OMR: 2026 world oil demand to fall by 2.5mln BPD (vs prev. forecast of a 1.6mln BPD fall), citing impasse in US-Iran talks on resolving their conflict; sees total world oil supply 1.74mln BPD lower than demand in 2026 (vs prev. forecast of 1.27mln BPD lower); now sees full recovery in oil supplies from Gulf producers deferred until 2027; the need for progress in resolving Middle East and Russia-Ukraine conflicts is greater than ever to avoid further oil market tightening.
• US retail diesel price tops USD 6 per gallon, according to AAA.
• US Interior Secretary Burgum said every idea is on the table when asked about diesel export controls.
• China's NDRC raised gasoline and diesel prices by CNY 435/t and CNY 420/t respectively, effective September 11th.

TRADE/TARIFFS

• Canadian PM Carney said the latest US trade measures against Canada are modest and he reiterated that Canada is always ready to sit down and negotiate with the US.
• South Korea's PM Han said talks on strategic investment projects with the US are progressing, and that the government will ease regulations and improve conditions for foreign investment. Han added that South Korea does not discriminate against companies based on nationality, and that US strategic investment talks must deliver mutual benefits and commercial returns.

NOTABLE EUROPEAN HEADLINES

• The French Finance Minister said the government has lowered the 2026 GDP forecast to 0.5% (prev. 0.7%), sees 2027 GDP at 1%, and that debt service costs are seen at EUR 65bln (EUR 4.5bln above original plans).
• ECB’s Moulin said France is not in economic danger. The heatwaves cost the economy 0.1ppts of growth, and the economy will restart at a moderate pace.
• BoE/Savanta Quarterly Attitude Survey (Aug): 1-year ahead 3.2% (prev. 4%), 2-year ahead 2.9% (prev. 3.5%), 5-year ahead 3.2% (prev. 3.9%).

NOTABLE EUROPEAN DATA RECAP

• UK GDP (Jul MM) 0.4% vs. Exp. 0% (Prev. 0.3%).
• UK GDP (Jul YY) 1.6% vs. Exp. 1.2% (Prev. 1.1%).
• UK GDP 3-Month Avg (Jul) 0.4% vs. Exp. 0.3% (Prev. 0.4%).
• UK Manufacturing Production (Jul YY) 2.6% vs. Exp. 2% (Prev. 0.5%).
• UK Manufacturing Production (Jul MM) 0.9% vs. Exp. 0.2% (Prev. -0.5%).
• UK Industrial Production (Jul YY) 0.6% vs. Exp. 0.2% (Prev. -0.2%).
• UK Industrial Production (Jul MM) 0.2% vs. Exp. -0.2% (Prev. -0.2%).

CENTRAL BANKS

• ECB's Nagel told CNBC that it is too early to speculate on rate hikes and that the recent rate hike is a clear commitment on inflation. Nagel added they would not exclude going into mildly restrictive territory.
• ECB's Kocher said that it is too early to say anything about the next ECB decision.
• ECB's Simkus said inflation is too high in both the EU and Lithuania.
• ECB's Kaasik said he would not describe current ECB interest rates as very high.
• The BoJ is set to raise interest rates next week, most likely by 25bps, and may signal readiness to speed up hikes, but has no preset view on terminal rate, or timing of further rate increases, according to sources.
• NBP's Kotecki said that rate cuts are not currently an option, but could consider rate hikes in November.

NOTABLE US HEADLINES

• US President Trump reiterated a pledge to provide a USD 5,000 Trump dividend to adults if Republicans win the Midterms and will make Trump tax cuts permanent, while he separately commented that the Trump dividend won't be a big problem at all and that he is doing it as a reward and not for the vote.
• US President Trump said in a recorded interview with Fox News that they're going to take care of USD 40tln debt through growth, while he spoke with Johnson and Thune regarding USD 5,000 dividends.
• US Treasury Secretary Bessent said they have the best-performing bond market in the world and will get to the other side of the energy supply shock, while he added that the Treasury market is in very good shape and term premium is at the lowest differential in many years. Bessent stated regarding the Treasury buyback operation that they didn't buy back as many as he said, because they buy cheap.
• US Pentagon is in talks to get into AI infrastructure funding with a USD 5bln loan, according to WSJ.

GEOPOLITICS

MIDDLE EAST

• Gulf Foreign Ministers plan to meet with their Iranian counterpart in an effort by Oman and Iran to secure a deal on shipping through the Strait of Hormuz, according to FT.
• US President Trump said Iran has some missiles, but most were knocked out, while he maybe won't go full into Iran because of the election. Trump also stated that the Iran war will end after the US midterm elections and that Iran is waiting for political change in America.
• US VP Vance privately sought assessments from US military commanders who warned that the Iran war was draining critical stockpiles of Patriot interceptors and long-range missiles, and could weaken US deterrence against China, Russia and North Korea, NYT reported. It added that commanders told Vance that Iran was more resilient than expected and willing to absorb heavy damage without collapsing, prompting Vance to advise President Trump and become more involved in efforts to end the conflict.
• US Treasury Secretary Bessent said they are going to sanction a large bank on Monday.
• Iran’s Foreign Minister and Pakistan’s Army Chief reportedly discussed ways to restore diplomatic efforts to de-escalate the conflict on all fronts, according to sources. The talks were focused on the US-Iran war, the possibility of returning to negotiations and Houthi attacks on Saudi Arabia.
• Al Jazeera reported the entirety of Yemen’s Red Sea coastline is now under Houthi control. It was later reported that the Houthis captured Dhabab and that Yemeni government forces have reportedly withdrawn from Peim Island.
• Iranian sources said that Tehran ordered the Houthis last week to intensify attacks on Saudi Arabia and promised to provide more funding, weapons and senior officers, according to Iran International. Furthermore, Yemen military sources said the IRGC directed a recent Houthi campaign along the Red Sea coast.
• Iranian President Pezeshkian said that he does not support the continuation of the war, and Iran must withstand the coming circumstances so that negotiations with the "enemy" are not under other conditions, Al Jazeera reported.
• Saudi Crown Prince MBS called President Trump twice on Thursday, urging him to launch strikes against Houthis, but Trump declined, and US officials stressed the administration has no plans to intervene directly against the Houthis for now, according to Axios.
• Houthis launched a missile attack on southern Saudi Arabia, according to IRNA.
• UAE is reportedly revising plans for its 5GW AI campus following Iranian attacks, according to sources.

RUSSIA-UKRAINE

• The European Commission resumed work on options that could persuade governments in the bloc to approve the use of Russia’s frozen assets for Ukraine, according to FT.

CRYPTO

• Bitcoin has steadily climbed throughout the European morning and currently trades at the upper end of its USD 76.52k-77.46k range.

APAC TRADE

• APAC stocks were pressured with global risk sentiment weighed by a further surge in oil prices and upside in yields, as the geopolitical escalation in the Middle East threatens shipping in the Bab al-Mandab Strait, while there were social media reports citing satellite images that suggested a potential strike by Houthis on Saudi's East-West pipeline.
• ASX 200 declined amid higher yields, with the Australian 3yr yield at its highest in over 15 years, while Citi revised its call and now sees two more rate hikes by the RBA this year.
• Nikkei 225 underperformed owing to higher oil prices and yields, while participants also brace for a widely expected BoJ rate hike next week.
• KOSPI was dragged lower amid tech-related pressure, with notable losses in the industry heavyweights.
• Hang Seng and Shanghai Comp conformed to the broad risk-off mood in the region, with underperformance seen in miners, while recent comments from PBoC Deputy Lu Lei that they will refine the RRR framework and conduct open-market operations more flexibly and precisely failed to provide inspiration, with today's OMO remaining at an inconsequential amount.

NOTABLE ASIA-PAC HEADLINES

• The Japanese Trade delegation is reportedly preparing a China visit in September, according to Kyodo.
• Fitch assigns Softbank (9984 JT) a "BB+" rating; outlook stable.

NOTABLE APAC DATA RECAP

• Japanese PPI (Aug MM) -0.2% vs. Exp. 0% (Prev. 0.1%).
• Japanese PPI (Aug YY) 7.6% vs. Exp. 7.4% (Prev. 7.2%).