• US President Trump said he spoke with Fed Chair Powell on rates and the meeting was productive, while he noted that there was no tension and he repeated several times that he believes Powell will do the right thing.
• US Treasury Secretary Bessent said the US is in a pretty good place with China on trade, and he will talk to China about them buying sanctioned oil from Russia and Iran.
• Thailand's acting PM said escalation and progression of military exchanges with Cambodia is moving towards war.
• APAC stocks were lower after the mixed performance in the US; European equity futures indicate a flat cash market open with Euro Stoxx 50 futures unchanged after the cash market finished with gains of 0.2% on Thursday.
• Looking ahead, highlights include UK Retail Sales, German Ifo, US Durable Goods, Atlanta Fed GDPNow, ECB Survey of Professional Forecasters, Earnings from SGS, Rightmove, NatWest, Volkswagen, Eni, Centene, AutoNation & AON.

SNAPSHOT

• Click for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks ended the day mixed as the tech-heavy Nasdaq 100 (+0.3%) outperformed, buoyed by Alphabet and broad-based Mag 7 strength (ex. TSLA), although the small-cap Russell 2000 (-1.4%) lagged and pared some of its weekly gains.
• Alphabet (GOOGL) (+1.0%) and Tesla (TSLA) (-8.2%) saw mixed fortunes following their earnings, and as such, resulted in a contrast between the performances of Communications and Consumer Discretionary, while most sectors saw a downside bias with Materials also a laggard which was hit by Dow’s (DOW) (-17.5%) dismal report.
• SPX +0.07% at 6,363, NDX +0.25% at 23,220, DJI -0.70% at 44,694, RUT -1.36% at 2,252.
• Click here for a detailed summary.

TARIFFS/TRADE

• US Treasury Secretary Bessent said the US is in a pretty good place with China on trade and he will talk to China about them buying sanctioned oil from Russia and Iran, while Bessent separately commented that he met with Singapore's Trade Minister.
• UK PM Starmer is to press US President Trump over a deal to cut tariffs on UK steel imports, according to FT.
• India’s Commerce Minister said he was optimistic that India could reach an agreement with the US ahead of the August 1st deadline and he had some wonderful engagement with his “friend and colleague from the US”. Furthermore, he said they are making fantastic progress with the US on a trade deal and hopes they'll be able to conclude a "very consequential partnership".
• Brazil's Finance Minister Haddad said he will present a contingency plan for higher US tariffs to President Lula on Monday which includes credit lines.

NOTABLE HEADLINES

• US President Trump said during his visit to the Federal Reserve in Washington that it is a tough construction job, while Trump and Powell briefly voiced disagreement over renovation figures and he reiterated that he wants Powell to lower interest rates. Trump later commented that he talked with Fed Chair Powell on rates and the meeting was productive, and noted that there was no tension, while he repeated several times that he believes Powell will do the right thing. Trump also said he has maybe three names in mind for Powell's replacement but stated it is not necessary to fire Powell which would be a big move.
• US President Trump posted "It was a Great Honor to tour the Renovation (and some new Construction!) of the Federal Reserve Building with Chairman Jerome Powell, Senator Tim Scott, and others. It’s got a long way to go, would have been much better if it were never started, but it is what it is and, hopefully, it will be finished ASAP. The cost overruns are substantial but, on the positive side, our Country is doing very well and can afford just about anything — Even the cost of this building! I’ll be watching and, hopefully, adding some expertise. As everyone knows, I renovated the Old Post Office on Pennsylvania Avenue, and it was a roaring SUCCESS. The total Construction cost was a small fraction of the Fed Building’s cost, and it is many times the size. With all of that being said, let’s just get it finished and, even more importantly, LOWER INTEREST RATES!"

APAC TRADE

EQUITIES

• APAC stocks were lower after the mixed performance in the US and with light catalysts for markets outside of earnings.
• ASX 200 mildly retreated with the downside led by underperformance in key industries including mining, materials, resources and financials, while Whitehaven Coal failed to benefit despite posting higher quarterly output and sales.
• Nikkei 225 gave back some of this week's gains amid profit taking despite a weaker currency and mostly softer Tokyo CPI.
• Hang Seng and Shanghai Comp conformed to the downbeat mood but with the downside in the mainland cushioned after a firm PBoC liquidity effort which resulted in a net daily injection of around CNY 602bln via 7-day reverse repos, while participants await next week's US-China trade discussions in Sweden.
• US equity futures traded with mild gains, albeit with price action muted in the absence of fresh major catalysts and ahead of next week's key events.
• European equity futures indicate a flat cash market open with Euro Stoxx 50 futures unchanged after the cash market finished with gains of 0.2% on Thursday.

FX

• DXY edged marginally higher after notching its first daily gain so far this week on Thursday and with little fresh developments on the trade front, although there was a slew of data releases stateside, including mixed PMIs and a continued decline in Initial Jobless Claims. Attention was also on President Trump's visit to the Federal Reserve in Washington which spurred little reaction as Trump reiterated calls for lower rates and with Trump and Powell voicing some disagreement over renovation figures, while Trump later stated he talked with Powell about rates and the meeting was productive, as well as repeated several times that he believes Powell will do the right thing.
• EUR/USD languished around the prior day's lows after post-ECB whipsawing with brief tailwinds yesterday spurred by comments from ECB President Lagarde that policy is in a good place, although the gains later faded owing to the firmer buck and as the outcome of US-EU talks remained unclear heading closer to the August 1st deadline. Towards the European close on Thursday, Bloomberg and Reuters sources suggested that ECB policymakers set a high bar for a September rate cut, a rate cut would require a deterioration in data, and that those seeking another rate cut will face a battle.
• GBP/USD trickled lower from this week's peak amid the absence of pertinent drivers and after recent soft PMIs.
• USD/JPY gradually extended on its rebound and reverted to above the 147.00 level which also follows the mostly softer-than-expected Tokyo inflation data.
• Antipodeans marginally extended on the previous day's retreat amid a lack of data from both sides of the Tasman and after risk appetite in Asia petered out.
• PBoC set USD/CNY mid-point at 7.1419 vs exp. 7.1609 (Prev. 7.1385).

FIXED INCOME

• 10yr UST futures lacked conviction after the prior day's curve flattening amid a drop in jobless claims and mixed PMI figures.
• Bund futures traded subdued after recently tumbling amid mixed trade-related headlines and dampened hopes for a near-term ECB cut.
• 10yr JGB futures kept afloat but were confined within tight parameters after mostly softer-than-expected Tokyo CPI data, which showed the headline and core readings retreated beneath the 3% level for the first time since March, while the latest enhanced-liquidity JGB auction resulted in a weaker demand ratio.

COMMODITIES

• Crude futures edged higher but with gains limited after yesterday's choppy performance and reports Chevron is resuming oil pumping in Venezuela.
• US President Trump’s administration green-lighted Chevron (CVX) to resume pumping oil in Venezuela, according to WSJ citing sources. It was also reported that the US government considers limited authorisations for Venezuela's PDVSA's foreign oil partners, including Chevron, according to Reuters sources. However, the US State Department said it cannot speak about any specific licenses to PDVSA partners and noted the US will not allow the Maduro regime to profit from the sale of oil.
• Spot gold was lacklustre with prices contained after the dollar snapped this week's losing streak.
• Copper futures remained lacklustre after yesterday's pullback and amid the mostly subdued mood across the Asia-Pac.

CRYPTO

• Bitcoin was pressured throughout the session and approached near the USD 115k level.

NOTABLE ASIA-PAC HEADLINES

• PBoC Deputy Governor Zou Lan wrote that the PBoC will promote the Treasury's role in cash and liquidity management, according to PBoC-backed Financial News.
• Japanese PM Ishiba held meetings with party leaders, although Japan's CDP leader Noda said PM Ishiba did not mention his future in talks with party leaders, while Japan Innovation Party co-Leader Maehara said he is not considering joining PM Ishiba's coalition.

DATA RECAP

• Tokyo CPY YY (Jul) 2.9% vs Exp. 3.0% (Prev. 3.1%)
• Tokyo CPY Ex. Fresh Food YY (Jul) 2.9% vs Exp. 3.0% (Prev. 3.1%)
• Tokyo CPY Ex. Fresh Food & Energy YY (Jul) 3.1% vs Exp. 3.1% (Prev. 3.1%)
• Japanese Services PPI (Jun) 3.20% vs Exp. 3.20% (Prev. 3.30%)

GEOPOLITICS

MIDDLE EAST

• French President Macron announced that France will recognise a Palestinian state in September at the UN General Assembly.
• Israeli PM Netanyahu condemned French President Macron's decision to recognise a Palestinian state and stated that such a move rewards terror and risks creating another Iranian proxy. Furthermore, Israel's Defence Minister said Macron's announcement of his intention to recognise the Palestinian state is a disgrace and a surrender to terrorism, while they will not allow the establishment of a Palestinian entity that would harm their security and endanger their existence.
• US Secretary of State Rubio posted the US strongly rejects French President Macron's plan to recognise a Palestinian state.
• Israeli official told Reuters that Hamas’s response to ceasefire talks does not allow for progress without a concession by Hamas and Israel intends to continue talks.
• Israeli official said the Israeli delegation will return to Qatar only when there is a feasible prospect of finalising an agreement and Hamas's response does not allow for progress unless they show flexibility, while mediators were surprised by Israel's decision and stated that "It would have been better if they had stayed and closed a deal", according to Journalist Stein.
• US special envoy Witkoff decided to bring his team home from Doha for consultations after the latest response from Hamas, and will now consider alternative options to bring the hostages home.
• Hamas said it is surprised by the remarks from US Envoy Witkoff over the group's position in ceasefire negotiations, while it added that mediators welcomed the group's constructive and positive stance in negotiations, and it is keen to continue Gaza ceasefire negotiations.
• European states are prepared to offer Iran an extension on a looming deadline to reimpose international sanctions, if it agrees to conditions, according to FT.
• Iran's Foreign Minister said Tehran will defend its nuclear rights, including uranium enrichment, in talks with E3 on Friday, while it was stated that Iran's positions are still "strong" and enrichment will continue, according to state media.
• Explosions were heard at a weapons depot in Yemen's Al-Anad military base.

OTHER NEWS

• Thailand's acting PM said escalation and progression of military exchanges with Cambodia is moving towards war.
• Thailand's military said border clashes took place with Cambodia early on Friday in two Thai provinces and that Cambodian forces have conducted sustained bombardment with heavy weapons, field artillery and rocket systems, while Thai forces have responded with appropriate supportive fire and advised civilians to leave the conflict areas. Furthermore, Thailand's military condemned Cambodia's use of long-range weapons to target civilian areas and said Cambodia's barbaric acts have senselessly claimed lives and injured numerous innocent civilians.
• UK Foreign Ministry said it advises against all but essential travel to parts of Thailand.
• US issued new North Korea-related sanctions, according to the Treasury Department website.

EU/UK

NOTABLE HEADLINES

• UK and Australia are to sign a GBP 20bln nuclear-powered submarine deal, according to The Times.

DATA RECAP

• UK GfK Consumer Confidence (Jul) -19.0 vs. Exp. -20.0 (Prev. -18.0)