• China is said to be conducting an assessment on US trade negotiations and urged the US to demonstrate sincerity for trade talks, while it urged the US to correct mistakes regarding tariffs and noted it is currently evaluating possible US trade talks.
• US Secretary of State Rubio said the Chinese want to meet and talk, while he added those talks will come up soon and there's a broader question about how much we should buy from China going forward
• Japanese Finance Minister Kato said Japan's huge US Treasury holdings are among the tools it can wield in trade negotiations with the US but added that whether Japan wields that card is a different question.
• EU negotiator Sefcovic said Europe is ready to make US President Trump a EUR 50bln offer, in which Brussels wants to increase purchases of US goods by EUR 50bln to address the “problem” in the trade relationship, while he said the bloc is making “certain progress” towards striking a deal.
• US equity futures were initially pressured after Apple (-3.8% after market) and Amazon's (-3.2% after market) earnings reports but later rebounded on hopes of US-China trade talks, while participants now await the latest NFP jobs data; APAC stocks traded mostly higher.
• European equity futures indicate a higher cash market open with Euro Stoxx 50 futures up 1.3% after the cash market closed flat on Wednesday.
• Looking ahead, highlights include EZ Manufacturing PMI (Final) & HICP, US NFP & Durable Goods, Earnings from Exxon Mobil, Chevron, Apollo, Brookfield, ING & BASF.
• Click for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks gained with sentiment buoyed by strong mega-cap earnings from Microsoft (MSFT, +7.6%) and Meta (META, +4.2%) in which the latter raised its CapEx views despite recent market jitters over data centre demand.
• ISM Manufacturing PMI data also added to support as the drop in the headline was not as bad as feared and with new orders and employment rising, while prices paid rose less than expected. The report offered optimism surrounding US risk assets and the dollar extended on existing strength against all G10 peers, although US equity futures gave back some of the gains after-hours following earning releases from Amazon and Apple.
• SPX +0.63% at 5,604, NDX +1.10% at 19,787, DJI +0.21% at 40,753, RUT +0.60% at 1,976.
• Click here for a detailed summary.

TARIFFS/TRADE

• US Department of Commerce launched the Section 232 steel and aluminium inclusions process which allows US manufacturers and trade associations to request the inclusion of new derivative articles under Section 232 steel and aluminium tariffs, according to a statement cited by Reuters.
• De minimis exception for products from China and Hong Kong imported to the US is now voided, as scheduled.
• US Secretary of State Rubio said the Chinese want to meet and talk, while he added those talks will come up soon and there's a broader question about how much we should buy from China going forward.
• China is said to be conducting an assessment on US trade negotiations and urged the US to demonstrate sincerity for trade talks, while it urged the US to correct mistakes regarding tariffs and noted it is currently evaluating possible US trade talks.
• China's MOFCOM said the tariff and trade war was unilaterally initiated by the US and the US should show its sincerity in talks, while it added the US has repeatedly expressed its willingness to negotiate with China on the tariff issue and has recently taken the initiative to convey information to the Chinese side through relevant parties on several occasions, hoping to talk with the Chinese side. MOFCOM added that China’s position has always been the same: 'talk, the door is open,' as well as noted the US should show sincerity if it wants to talk and that in any possible dialogue or meeting if the US does not correct its unilateral tariff measures, it has no sincerity at all. Furthermore, it stated the US should be prepared to take action in correcting erroneous practices and cancelling unilateral tariffs.
• Japanese PM Ishiba said there is no change at all to Japan’s stance of requesting the US to cancel tariffs, while he added they are not in a situation where common ground has been found yet but he received a report from Economic Minister Akazawa that talks were forward-looking. Furthermore, Ishiba commented that reaching a deal in haste is not necessarily in the best interest.
• Japanese Finance Minister Kato said Japan's huge US Treasury holdings are among the tools it can wield in trade negotiations with the US but added that whether Japan wields that card is a different question.
• Japan's Economic Minister Akazawa said that US tariff negotiations lasted for 130 minutes and they were able to have a thorough discussion in which repeated its request for a review of tariffs on Japan, while they talked about how Japan can expand trade, non-tariff measures and economic security with the US. Akazawa said they told the US that tariff measures are regrettable and they want to hold the next meeting after mid-May, while they asked the US to review tariff measures on auto parts and the negotiation was handled as a package. Furthermore, they did not talk about China during the talks and he understands that the US wants to reach some kind of agreement within the 90-day window with various countries.
• EU negotiator Sefcovic said Europe is ready to make US President Trump a EUR 50bln offer, in which Brussels wants to increase purchases of US goods by EUR 50bln to address the “problem” in the trade relationship, while he said the bloc is making “certain progress” towards striking a deal.

NOTABLE HEADLINES

• US President Trump said he just received an update from congressional leaders on the tax bill and said they are working very hard on a great big beautiful bill. Trump said taxes will go up 68% if the big bill does not pass, while he added that things are moving along very well and they are right on schedule on the tax bill. Furthermore, he said they'll be paying off debt and so much money will be taken in that they'll cut taxes.
• US President Trump is planning to release his FY 2026 budget on Friday, according to Axios. It was separately reported that President Trump is to propose slashing USD 163bln in government programs in budget blueprint, according to WSJ.
• US President Trump said he removed Mike Waltz as National Security Adviser but nominated Waltz to be the next US Ambassador to the UN, while in the interim, Secretary of State Rubio will serve as the National Security Advisor.

AFTER-MARKET EARNINGS

• Apple Inc (AAPL) Q2 2025 (USD): EPS 1.65 (exp. 1.62), Revenue 95.36bln (exp. 94.53bln), authorises USD 100bln buyback, Greater China rev. 16bln (exp. 16.97bln); Shares fell 3.8% after-market.
• Amazon.com Inc (AMZN) Q1 2025 (USD): EPS 1.59 (exp. 1.38), Revenue 155.7bln (exp. 154.88bln). Q2 25 revenue view 159-164bln (exp. 161.62bln); shares fell 3.2% after-market.
• Airbnb (ABNB) Q1 2025 (USD): EPS 0.24 (exp. 0.23), Revenue 2.3bln (exp. 2.26bln); shares fell 3.2% after-market.
• Reddit Inc (RDDT) Q1 2025 (USD): EPS 0.13 (exp. 0.01), Revenue 392.4mln (exp. 369.0mln); shares rose 6.5% after-market.

APAC TRADE

EQUITIES

• APAC stocks traded mostly higher as many regional participants returned from the Labor Day holiday and with some hopes for US-China trade talks.
• ASX 200 gained with the advances led by outperformance in the energy sector following the upside in oil prices and with a continuation of the status quo seen as the outcome in tomorrow's federal election with Australian PM Albanese highly favoured to win a second term.
• Nikkei 225 rallied at the open but is off intraday highs after stalling near the 37,000 level and following a surprise increase in Japan's unemployment rate.
• Hang Seng outperformed on return from the holiday closure and despite the continued absence of mainland participants, while there were reports that China is currently evaluating possible US trade talks and noted that the US has repeatedly expressed its willingness to negotiate with China on the tariff issue, although it urged the US to demonstrate sincerity for trade talks and correct its unilateral tariff measures.
• US equity futures were initially pressured after Apple and Amazon's earnings reports but later rebounded on hopes of US-China trade talks, while participants now await the latest NFP jobs data.
• European equity futures indicate a higher cash market open with Euro Stoxx 50 futures up 1.3% after the cash market closed flat on Wednesday.

FX

• DXY slightly softened but held on to most of the prior day's spoils after benefitting from increased US optimism which was facilitated by advances in USD/JPY in the aftermath of the dovish BoJ and after ISM Manufacturing PMI data printed in contraction territory but not as bad as feared. Furthermore, there was a muted reaction to the greenback from the recent trade-related headlines including reports that China is currently evaluating possible US trade talks and that the US has repeatedly expressed its willingness to negotiate with China on the tariff issue, while participants now await the NFP report.
• EUR/USD nursed some of its recent losses and just about reclaimed the 1.1300 handle with price action contained amid light newsflow although there were comments from EU's top trade negotiator Sefcovic that Europe is ready to make US President Trump a EUR 50bln offer.
• GBP/USD rebounded from a weekly low and returned to the 1.3300 territory but with the recovery limited by the absence of any major UK-specific catalysts.
• USD/JPY initially extended on the prior day's BoJ-spurred upward momentum but then pulled back from resistance just shy of the 146.00 level, while there was little reaction seen following reports of US-Japan tariff talks or from comments from Japanese Finance Minister Kato who said Japan's huge US Treasury holdings are among tools it can wield in trade negotiations with the US but added whether Japan wields that card is a different question.
• Antipodeans traded firmer alongside the strength in CNH and despite disappointing Australian Retail Sales, while Australia is set for a federal election on Saturday with PM Albanese seen as likely to secure a second term as a major YouGov poll showed the ruling Labor party is on track to win an increased majority of 84 seats in the 150-seat lower house.

FIXED INCOME

• 10yr UST futures lingered around the prior day's trough after prices were pressured by the better-than-feared ISM data and as the focus now shifts to the NFP report.
• Bund futures mildly gapped lower on return from the holiday closure and with very little in the way of fresh pertinent drivers.
• 10yr JGB futures were choppy following the post-BoJ advances and with increased demand at the enhanced-liquidity JGB auction.

COMMODITIES

• Crude futures remained underpinned after climbing yesterday amid the positive risk sentiment and US President Trump's warning of secondary sanctions on Iran oil purchases.
• US President Trump said they put sanctions on Iranian oil yesterday and whoever takes oil from Iran cannot do business with the US. Trump later posted that all purchases of Iranian oil, or petrochemical products must stop now and any country or person who buys any amount of oil or petrochemicals from Iran will be immediately subject to secondary sanctions.
• China is to seek renegotiated terms on its Venezuela oil contracts, according to Bloomberg.
• A second Chevron (CVX)-chartered vessel begins to return oil cargo in Venezuela, according to ship tracking data and a Reuters source.
• Spot gold gradually edged higher amid a softer dollar and heading into the key US jobs data.
• Copper futures were eventually lifted amid the positive risk environment and as both the US and China suggested a willingness by the other side for talks.

CRYPTO

• Bitcoin extended on its recent mild gains and rose to back above the USD 97,000 level.

NOTABLE ASIA-PAC HEADLINES

• China-linked group was accused of meddling in Australia's election with the Chinese Communist Party-linked Australia Hubei Association said to have mobilised volunteers to support an independent candidate ahead of Saturday's federal election in Australia, according to Nikkei.

DATA RECAP

• Japanese Unemployment Rate (Mar) 2.5% vs. Exp. 2.4% (Prev. 2.4%)
• Japanese Jobs/Applicants Ratio (Mar) 1.26 vs. Exp. 1.25 (Prev. 1.24)
• Australian PPI QQ (Q1) 0.9% (Prev. 0.8%)
• Australian PPI YY (Q1) 3.7% (Prev. 3.7%)
• Australian Retail Sales MM Final (Mar) 0.3% vs. Exp. 0.4% (Prev. 0.2%)
• Australian Retail Trade (Q1) 0.0% vs. Exp. 0.3% (Prev. 1.0%)

GEOPOLITICS

MIDDLE EAST

• Israeli PM Netanyahu said Israel attacked a target last night near the Syrian presidential palace in Damascus.
• Israeli Home Front said Northern Israel is under rocket attack from Yemen, according to Al Jazeera.
• Houthi-affiliated media reported US warplanes targeted the Yemeni capital Sana'a, according to Sky News Arabia.
• US Secretary of State Rubio said this is the best opportunity for Iran and that Iran should not be afraid of inspectors including Americans, according to a Fox News interview.

RUSSIA-UKRAINE

• Ukrainian President Zelensky said Ukraine is interested in ratifying the minerals deal with the US ASAP and said the deal is "indeed equal agreement" with the US.
• Ukraine's First Deputy PM said parliament will ratify the minerals deals with the US in the next few weeks and the Ukraine-US fund is to become operational within a few months after ratification.
• US VP Vance said Russia's war in Ukraine is not going to end anytime soon. It was separately reported that US Secretary of State Rubio said Ukraine and Russia's positions are still a little far apart, while he added it's going to take a breakthrough soon on Ukraine to make this possible or else the President will have to decide how much time to dedicate to this.