• APAC stocks traded mixed following the ultimately flat performance stateside amid a lack of fresh macro catalysts, as focus centred on geopolitical updates and amid cautiousness ahead of Powell's speech at Jackson Hole on Friday.
• Russia's Kremlin said US President Trump and Russian President Putin held a phone call in which they discussed the idea of exploring the possibility of raising the level of Russian and Ukrainian representatives in the negotiations.
• S&P affirmed the US at AA+; Outlook Stable, S&P added that the revenue from President Trump's tariffs will offset the fiscal hit from his recent tax-cut and spending bill.
• European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market finished with losses of 0.3% on Monday.
• Looking ahead, highlights include US Building Permits & Housing Starts, Canadian CPI, Atlanta Fed GDPNow, Comments from Fed's Bowman, Earnings from Home Depot, Supply from UK & Germany.

US TRADE

EQUITIES

• US stocks were rangebound to start the week, although the Russell 2000 (+0.4%) outperformed in thin newsflow and typical summer trading conditions as focus resided around geopolitical updates amid a meeting between US President Trump, Ukrainian President Zelensky and various European leaders, while both Trump and Zelensky had earlier touted a possible trilateral meeting with Russia. In terms of the sectors, price action was mixed with Industrials and Consumer Discretionary sitting atop of the pile, while Real Estate and Energy were the laggards.
• SPX -0.02% at 6,449, NDX +0.01% at 23,713, DJI -0.08% at 44,910, RUT +0.40% at 2,296.
• Click here for a detailed summary.

TARIFFS/TRADE

• Brazil's government submitted its response to the US Section 301 investigation and said it urges the USTR to reconsider the initiation of the Section 301 investigation and to engage in constructive dialogue. It was separately reported that Brazil's Finance Minister Haddad said Brazil is deadlocked with the US over 50% tariffs and reduction in high levies depends on Washington being open to talks, according to FT.
• India exempted import duty on cotton between August 19th to September 30th, according to a government order.

NOTABLE HEADLINES

• S&P affirmed the US at AA+; Outlook Stable, while it stated the US outlook indicates fiscal deficit outcomes will not meaningfully improve, but does not project persistent deterioration over the next several years. S&P added that the revenue from President Trump's tariffs will offset the fiscal hit from his recent tax-cut and spending bill.
• US President Trump's administration is reportedly considering taking a 10% stake in Intel (INTC) and is considering converting the Co's Chips Act grants into equity, according to Bloomberg citing sources, while a source added that the exact size of the stake and whether the White House moves ahead or not is still in flux.

APAC TRADE

EQUITIES

• APAC stocks traded mixed following the ultimately flat performance stateside amid a lack of fresh macro catalysts, as focus centred on geopolitical updates and amid cautiousness ahead of Powell's speech at Jackson Hole on Friday.
• ASX 200 pulled back from record highs with heavy losses in healthcare as CSL shares fell by a double-digit percentage after the announcement to spin-off its flu vaccine business and cut 15% of its workforce, while tech was at the other end of the spectrum and miners also gained post-BHP earnings despite the mining giant reporting a 26% drop in FY underlying profit.
• Nikkei 225 swung between gains and losses after failing to sustain the initial upward momentum that had lifted the index to a fresh record high.
• Hang Seng and Shanghai Comp kept afloat following a firm liquidity effort by the PBoC which injected CNY 580bln through its 7-day reverse repo operation, while there were also comments yesterday by Chinese Premier Li who said the nation should consolidate and expand the positive trend in the economy, as well as stabilise market expectations and should continue to stimulate consumption potential.
• US equity futures were lacklustre after yesterday's tentative mood and in the absence of any major drivers, while participants also await retailer earnings this week.
• European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market finished with losses of 0.3% on Monday.

FX

• DXY marginally extended on recent gains after having returned to above the 98.00 level amid a lack of tier-1 data and absence of Fed speak, with participants awaiting Fed Chair Powell at Jackson Hole later in the week, while headline-driven trade was thin and focus resided around geopolitics.
• EUR/USD remained lacklustre after trickling further beneath the 1.1700 handle with very little newsflow from the bloc aside from the comments from various European leaders following the multilateral meeting on Ukraine at the White House.
• GBP/USD mildly breached through the prior day's lows and briefly slipped beneath support at the 1.3500 level, while newsflow from the UK remained very quiet, although there were reports that UK Chancellor Reeves is considering replacing stamp duty with a new property tax.
• USD/JPY took a breather after recently advancing alongside a firmer dollar and with further gains limited by a lack of data releases and resistance at the 148.00 level.
• Antipodeans traded little changed amid the tentative mood, lack of pertinent data and after proceeding sideways for the majority of the previous US trading session.
• PBoC set USD/CNY mid-point at 7.1359 vs exp. 7.1846 (Prev. 7.1322)

FIXED INCOME

• 10yr UST futures attempted to nurse losses but was ultimately thwarted amid light catalysts ahead of FOMC Minutes on Wednesday and Fed Chair Powell's speech at the Jackson Hole Symposium on Friday.
• Bund futures clawed back some of losses and briefly returned to the 129.00 level, but lost steam ahead of supply.
• 10yr JGB futures were subdued amid a lack of data releases and with pressure seen following weaker demand and lower accepted prices at the 20yr JGB auction.

COMMODITIES

• Crude futures pulled back overnight after the prior day's choppy mood and following talks between US President Trump, Ukrainian President Zelensky and European leaders which Trump described as a very good meeting, while he also called Russian President Putin to begin arrangements for a Putin-Zelensky meeting, which would be followed by a trilateral meeting with Trump.
• Spot gold traded little changed after yesterday's indecision amid little fresh macro drivers and with geopolitics in focus.
• Copper futures struggled for direction amid the mixed risk appetite in the Asia-Pac region and tentativeness ahead of Jackson Hole.

CRYPTO

• Bitcoin continued to retreat overnight and fell beneath the USD 115k level.

NOTABLE ASIA-PAC HEADLINES

• China’s Foreign Minister Wang Yi held talks with his counterpart in India and said their countries should establish a correct strategic understanding, as well as regard each other as partners and opportunities, not as rivals or threats, while he added that China is ready to uphold the principle of cordiality and mutual benefit.
• China lifts curbs on export of rare earth magnets to India, according to local media.

GEOPOLITICS

RUSSIA-UKRAINE

• US President Trump posted that he had a very good meeting with Ukrainian President Zelensky and European leaders, which ended in a further meeting in the Oval Office and during the meeting, they discussed security guarantees for Ukraine, which would be provided by the various European countries with coordination with the US. Trump added everyone is very happy about the possibility of peace for Russia and Ukraine, and at the conclusion of the meetings, he called Russian President Putin and began the arrangements for a meeting, at a location to be determined, between President Putin and President Zelensky. Furthermore, Trump said after that meeting takes place, they will have a trilat between Trump, Putin and Zelensky, as well as noted that this was a very good, early step for a war that has been going on for almost four years and that VP Vance, Secretary of State Rubio, and Special Envoy Witkoff are coordinating with Russia and Ukraine.
• US President Trump had earlier commented that they will be meeting for a while and in a week or two, they will know if they can solve it, but added that it is possible it might not be able to get done.
• Russia's Kremlin said US President Trump and Russian President Putin held a phone call which lasted 40 minutes and they discussed the idea of exploring the possibility of raising the level of Russian and Ukrainian representatives in the negotiations, while Putin warmly thanked Trump for the hospitality and well-organized meeting in Alaska, as well as for progress achieved at the summit. Furthermore, Putin and Trump spoke in favour of the continuation of direct talks between the Russian and Ukrainian delegations, while they agreed to continue close contact with each other on the Ukrainian crisis and other issues.
• Ukrainian President Zelensky said we need not a pause in the war but real peace and territorial issues will be decided between Russia and Ukraine. Zelensky said he discussed security guarantees with Trump and European leaders, and received an important signal from the US on being part of security guarantees and help in coordinating it. Furthermore, he said the US offers to have a trilateral meeting as soon as possible and that Ukraine is ready for any format to meet with Putin.
• Ukrainian President Zelensky said they spoke about sensitive matters including security guarantees, and all of them want to finish this war and stop Russia, while he added it is important that the US gives a strong signal on security. Zelensky also earlier commented that they need to stop the war and are ready for a trilateral engagement, as well as noted he is open to holding elections after peace but can't hold an election during war.
• Ukraine reportedly offered a USD 100bln weapons deal to US President Trump in an effort to win security guarantees, according to the Financial Times citing documents laying out Kyiv's proposal to Trump at the White House meeting.
• US Secretary of State Rubio told Fox News that they will work with European allies and non-European countries to build security guarantees for Ukraine. Rubio said he was in the room when Trump and Putin spoke, while he added that Trump suggested to Putin that he meet with Zelensky.
• NATO Secretary General Rutte said it was a very successful day in Washington where security guarantees were discussed and more details on security guarantees will be discussed in the coming days, while he added it is a breakthrough that the US will get involved and they are discussing some Article 5-type arrangement.
• European Commission President Von der Leyen said after the White House meeting that they are here as allies and friends for peace in Ukraine and in Europe, while she added this is an important moment as they continue to work on strong security guarantees for Ukraine.
• German Chancellor Merz that he feels these are decisive days for Ukraine and is not sure if Russian President Putin will have the courage to come to a summit with Zelensky present, while he added that expectations were not only met but were exceeded from this meeting. Merz also stated that US President Trump spoke with Russian President Putin and agreed that a Putin-Zelenskiy meeting will happen within two weeks, while the location is yet undecided, and that will be followed by a three-way meeting involving Trump.
• Finland's President Stubb said they agreed on security guarantees and steps forward, as well as noted that talks were constructive and the Coalition of the Willing has already worked on security guarantees which they will build upon. Stubb also stated there is nothing concrete about US participation in security guarantees and that US President will inform them, with details of security guarantees to be ironed out in the next week or so.
• Debris from a destroyed Ukrainian drone sparked a fire at an oil refinery and hospital in Russia's Volgograd, according to the regional administration.

MIDDLE EAST

• Latest Gaza ceasefire proposal includes the temporary suspension of military operations for a 60-day period and includes a path to reach a comprehensive deal to end the war, according to Reuters citing Egyptian sources.

OTHER

• North Korea leader Kim said joint US-South Korea military drills show willingness for war provocation, while he also stated that the security environment requires North Korea to expand its nuclear armament rapidly.