• APAC stocks were predominantly lower following the weak handover from Wall St; sentiment dampened by global debt concerns.
• European equity futures indicate a higher cash market open with Euro Stoxx 50 future up 0.3% after the cash market closed with losses of 1.4% on Tuesday.
• DXY is holding onto yesterday's gains, JPY and GBP remain softer vs. the USD after a bruising session on Tuesday.
• USTs lack direction following yesterday's bear-steepening. Bunds are a touch softer, JGB tracked recent losses in global peers.
• Crude futures lacked conviction after whipsawing yesterday, spot gold is steady after printing another fresh ATH.
• UK Chancellor Reeves has pencilled in November 26th for the date of the Budget, according to Huffington Post.
• Looking ahead, highlights include EU Producer Prices, EZ, UK, US Services PMI (Final), US Durable Goods R (Jul), JOLTS Job Openings (Jul), NBP Announcement, Fed Beige Book, BoE’s Mann, Breeden, Bailey, Lombardelli, Greene & Taylor, ECB’s Lagarde, RBA Governor Bullock, Fed’s Musalem & Kashkari, Supply from Germany.

US TRADE

EQUITIES

• US stocks declined on Tuesday as participants returned from the long Labor Day weekend and were hit by the broader risk aversion amid numerous factors including the US appeals court ruling on Trump tariffs as illegal, geopolitical uncertainty, and the US Commerce Department revoking waivers for Intel/Samsung/SK Hynix/TSMC. Meanwhile, Treasuries saw broad-based selling alongside global fixed income as the US curve bear steepened on trade rulings, global fiscal/political woes, and supply.
• SPX -0.69% at 6,416, NDX -0.79% at 23,231, DJI -0.55% at 45,296, RUT -0.60% at 2,352.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said on the tariff ruling that they're going to the Supreme Court Wednesday and need an early decision.
• US Ambassador to NATO said US President Trump has not put tariffs on China because those negotiations are ongoing and the war in Ukraine is certainly part of that discussion, while he added that Trump “certainly knows that he has those cards to play” and may impose tariffs if he deems them necessary. He also stated that while tariffs on India “have changed their calculation” about purchases of Russian energy, the US “probably not going to foster a closer relationship in trade with India".
• Japanese Trade Minister Akazawa is to visit the US this week, according to TV Tokyo.

NOTABLE HEADLINES

• US President Trump said they need a very serious rate cut, while it was also reported that the ruling on Trump's Fed firing is not expected until after September 4th.
• US Treasury Secretary Bessent is planning to start a blitz of interviews on Friday in search of a candidate to be the next Fed Chair, according to WSJ.
• US President Trump said they're going to send the National Guard to Chicago.
• Atlanta Fed GDPNow (Q3 25): 3.0% (prev. 3.5%)

APAC TRADE

EQUITIES

• APAC stocks were predominantly lower following the weak handover from Wall St, where the major indices declined on return from the extended weekend as sentiment was dampened by global debt concerns amid a higher yield environment.
• ASX 200 retreated with the declines led by underperformance in tech, utilities and financials, while slightly stronger-than-expected Australian GDP data failed to inspire.
• Nikkei 225 was pressured amid a higher global yield environment but with the downside initially cushioned by recent currency weakness.
• Hang Seng and Shanghai Comp gradually fell despite the better-than-expected RatingDog Services PMI data from China and with the attention in Beijing on the military parade, which was attended by Russian President Putin and North Korean Leader Kim, while US President Trump reacted in a post and accused them of conspiring against the US.
• US equity futures (ES +0.1%, NQ +0.2%) traded mixed after recent losses on Wall St and with Alphabet shares supported after-hours following a federal judge ruling that the Co. would not be required to sell its Chrome browser but must share data with competitors.
• European equity futures indicate a higher cash market open with Euro Stoxx 50 futures up 0.3% after the cash market closed with losses of 1.4% on Tuesday.

FX

• DXY is holding onto yesterday's gains, which were seen amid a risk-off tone that was fuelled by a global rise in bond yields amid concerns over increased debt issuances, and which outweighed the data releases. Nonetheless, participants look ahead to incoming releases including JOLTS data scheduled later, which kicks off a flurry of employment metrics culminating with Friday's NFP report, while it was also reported that Treasury Secretary Bessent is planning to start a blitz of interviews on Friday for the Fed Chair role.
• EUR/USD languished firmly beneath the 1.1700 handle after it recently gave up ground to the buck, while the mostly hotter-than-expected EU inflation data and somewhat mixed comments from ECB officials did little to inspire the single currency.
• GBP/USD remained subdued at a sub-1.3400 territory following yesterday's underperformance as debt concerns were triggered alongside a rise in the UK 30yr yield to a 27-year high.
• USD/JPY continued its upward momentum and edged closer to the 149.00 level before running into some resistance.
• Antipodeans were contained with only brief support seen following the slightly better-than-expected Australian GDP data.

FIXED INCOME

• 10yr UST futures lacked direction after bear steepening yesterday following trade rulings, global fiscal woes and supply.
• Bund futures languished beneath the 129.00 level after retreating alongside a sell-off in global bond markets as yields climbed and with a EUR 5bln Bund issuance scheduled for today.
• 10yr JGB futures tracked recent downside in global peers with demand not helped by a lack of tier-1 data from Japan.

COMMODITIES

• Crude futures lacked conviction after whipsawing yesterday amid a stronger dollar and with the US imposing sanctions targeting Iranian oil, while participants will have to wait an additional day for this week's inventory data owing to the recent Labor Day holiday.
• Israeli PM Netanyahu ordered not to proceed with the huge gas agreement between Leviathan and Egypt without his consent, according to Al Jazeera citing Israel's Hayom.
• Spot gold was rangebound but printed fresh record highs above the USD 3,500/oz level despite recent dollar strength.
• World Gold Council said to launch a digital form of gold, according to FT.
• Copper futures pulled back from a 1-month high amid the mostly subdued overnight risk appetite including in its largest buyer, China.

CRYPTO

• Bitcoin traded indecisively with price action oscillating around the USD 111k level.

NOTABLE ASIA-PAC HEADLINES

• BoJ Governor Ueda said he exchanged views with PM Ishiba on the economy and financial markets, while they had discussions on various topics about the economy and talked about forex. Ueda said it was a regular meeting to exchange views on the economy and financial markets and there is no change to their stance of raising interest rates if the economy and prices move in line with the forecast.
• Japanese ruling party LDP's Aso is set to call for an early party election, according to Mainichi.

DATA RECAP

• Chinese RatingDog Services PMI (Aug) 53.0 vs. Exp. 52.4 (Prev. 52.6)
• Chinese RatingDog Composite PMI (Aug) 51.9 (Prev. 50.8)
• Australian Real GDP QQ SA (Q2) 0.6% vs. Exp. 0.5% (Prev. 0.2%, Rev. 0.3%)
• Australian Real GDP YY SA (Q2) 1.8% vs. Exp. 1.6% (Prev. 1.3%, Rev. 1.4%)

GEOPOLITICS

MIDDLE EAST

• Israeli PM Netanyahu said they have destroyed the Iranian axis in Gaza, Lebanon and Syria, while he said in a message to Israeli soldiers that the war in Gaza has reached a decisive stage, according to Al Arabiya and Sky News Arabia.

RUSSIA-UKRAINE

• US President Trump commented about Russian President Putin, in which he stated that he is "very disappointed in him" and will be doing something to help people live regarding the war in Ukraine, according to the Scott Jennings Radio Show.
• Ukrainian President Zelensky said Russia is engaged in a new troop buildup in certain sectors and continues to launch strikes on Ukraine.
• Ukraine's Foreign Ministry said the Zaporizhzhia nuclear power plant is a part of Ukraine and it will never agree to legalise its Russian occupation, while it added the only way to guarantee safety at the plant is the full and immediate withdrawal of Russian troops.
• Ukraine's military said Russia launched an air attack on Kyiv and it was also reported that all of Ukraine was under air raid alerts following Ukrainian air force warnings of Russian missile and drone attacks, while Poland scrambled aircraft to ensure airspace security after Russia launched strikes on Ukraine.
• Russian Foreign Minister Lavrov said Moscow expects Russia-Ukraine talks to continue and he stated that the heads of delegations are in direct contact. Lavrov said Russia expects statements from its partners in support of dialogue with the US on Ukraine, while he added that for a lasting peace in Ukraine, territorial realities must be recognised. Lavrov also said that India did not bow to US demands to stop purchasing resources from Russia, which Moscow appreciates, as well as noted the US is making active diplomatic efforts on Ukraine and that Putin–Trump contacts are substantive. Furthermore, he said a new system of security guarantees for Russia and Ukraine must be formed and that Moscow calls for ensuring a neutral, non-bloc and non-nuclear status of Ukraine, according to RIA and TASS.
• Russian Foreign Ministry spokeswoman said Kyiv and its allies reject the possibility of compromises on settlement of conflicts, according to RIA.
• Russia and the US are in the process of coordinating on dates and the venue of the next round of talks, according to RIA.
• Russia and India discussed the possibility of expanding S-400 supplies, according to TASS.

OTHER

• Chinese President Xi said at the military parade in Beijing that China is a great nation that fears no violence and is self-reliant and strong, while he added the Chinese people stand on the right side of history and are committed to peace. Xi also said the world is facing a choice of peace or war now and he called on nations to prevent historical tragedies from recurring.
• US President Trump posted on Truth Social "The big question to be answered is whether or not President Xi of China will mention the massive amount of support and “blood” that The United States of America gave to China in order to help it to secure its FREEDOM from a very unfriendly foreign invader. Many Americans died in China’s quest for Victory and Glory. I hope that they are rightfully Honored and Remembered for their Bravery and Sacrifice! May President Xi and the wonderful people of China have a great and lasting day of celebration. Please give my warmest regards to Vladimir Putin, and Kim Jong Un, as you conspire against The United States of America. PRESIDENT DONALD J. TRUMP"
• US President Trump said he is not concerned about the axis forming against the US, including among China and Russia. Furthermore, Trump said regarding Chinese President Xi hosting Russian President Putin and North Korean Supreme Leader Kim, in which he stated that this is not a challenge and "China needs us more than we need them", as well as stated that he may take a different stance on Putin if nothing comes.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Rachel Reeves has pencilled in November 26 for the date of the Budget, according to Huffington Post.
• UK is in advanced talks to build warships for Denmark and Sweden, according to FT.
• French Finance Minister Lombard urged for a compromise on the 2026 Budget and said the deficit reduction plan will inevitably be less ambitious if the government falls, while he is confident France will accomplish its GDP growth forecast of 0.6% this year and said they are on track to reduce the deficit from 5.8% in 2024 to 5.4% in 2025, according to FT.
• ECB's Muller said it makes sense to keep rates on hold for a while and watch the economy, while he added that looking at recent data, “we could still assume that we are more or less on the path that was already there during the last round of projections for the ECB". Furthermore, Muller said “In light of all of this turmoil that we have seen in the recent past, starting with the trade policy in the US, also the impact of war in Ukraine that we have now for a number of years, the economy has held up quite well in Europe”.