• US President Trump said he would be placing chip tariffs “very shortly,” which will be “fairly substantial”, but signalled Apple (AAPL) and others will be safe during his dinner with tech CEOs at the White House on Thursday, according to CNBC.
• Fed’s Williams (voter) reiterated that he expects gradual interest rate cuts over time, while he declined to comment if the market's September rate cut view is correct.
• US President Trump said they are going to get the war in Ukraine settled; US Defense Department said two Venezuelan military aircraft flew near a US Navy vessel in international waters.
• APAC stocks mostly took their cues from the gains on Wall Street; European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market finished with gains of 0.4% on Thursday.
• Looking ahead, highlights include German Industrial Orders (Jul), French Trade Balance, EZ Employment (Final), GDP Revised (Q2), UK Retail Sales (Aug), EZ GDP Revised (Q2), US Jobs Report (Aug), Canadian Jobs Report (Aug).

US TRADE

EQUITIES

• US stocks closed in the green with outperformance in the Russell 2000 while T-Notes firmed across the curve with the Dollar posting marginal gains. The focus was largely on data and Fed speak ahead of NFP on Friday, in which Challenger Layoffs accelerated while the ADP National Employment print fell below analyst expectations. Initial Jobless Claims also continued to rise above analyst forecasts, although Continued Claims declined to 1.94mln, beneath forecasts. Unit Labour Cost revisions for Q2 were revised down, below forecasts, while productivity was revised up, above the consensus. Trade data saw a widening deficit, while the ISM Services PMI report beat forecasts, with prices paid and employment little changed, but business activity and new orders accelerated. Fed speak saw Williams lean dovish, noting he sees reduced upside risk to inflation from tariffs, and that balancing has moved a bit more towards the Fed's job mandate. However, he declined to comment when asked if market pricing for the September meeting is correct.
• SPX +0.83% at 6,502, NDX +0.93% at 23,633, DJI +0.77% at 45,621, RUT +1.26% at 2,380.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said he would be placing chip tariffs “very shortly,” which will be “fairly substantial”, but signalled Apple (AAPL) and others will be safe during his dinner with tech CEOs at the White House on Thursday, according to CNBC.
• US President Trump is reportedly preparing to start North American trade deal renegotiations and public consultations on the key US trade deal with Mexico and Canada, which will be the first acts of a likely lengthy and contentious review, according to WSJ.
• White House said US President Trump signed an Executive Order officially implementing the US-Japan trade agreement, while it added that Japan is working towards an expedited implementation of a 75% increase of US rice procurements and the US will apply a baseline 15% tariff on nearly all Japanese imports. It was later reported that Japan and the US issued a memorandum of understanding on the USD 550bln plans with investments to be made up to January 19th, 2029.
• Japanese PM Ishiba reiterated they will work to minimise the impacts on the economy and employment, while he added the US and Japan tariff agreement is very meaningful and it is important to implement the agreement sincerely and promptly.
• Japan's top trade negotiator Akazawa said Japan agreed to issue joint statements on the US request and they signed an MOU on Japan's investment package. Akazawa said nothing had changed from the July 22nd agreement with regards to the USD 550bln investment package and the amended executive order does not mention most-favoured-nation treatment for pharma and chips, and will continue to push for the treatment. Furthermore, he said their stance that additional tariffs themselves are regrettable remains unchanged, as well as stated that lower auto tariffs will take effect within up to two weeks.
• Mexican President Sheinbaum said Mexico is considering tariffs on imports from countries that do not have trade agreements, including China.
• Ecuador’s Foreign Minister said they are working towards a trade agreement with the US after meeting with US Secretary of State Rubio, while Rubio noted they have made much progress on tariff negotiations and hopes to have a positive announcement soon.
• Anthropic is to stop selling AI services to majority Chinese-owned groups and is trying to limit the ability of Beijing to use its technology to benefit China’s military and intelligence services, while Anthropic's policy will also apply to US adversaries including Russia, Iran and North Korea, according to FT.

NOTABLE HEADLINES

• Fed’s Williams (voter) reiterated that he expects gradual interest rate cuts over time if the economy meets his forecasts. Williams also commented that they are always watching broader trends of data, not one report, and sees a gradual cooling in the job market. Williams sees reduced upside risk to inflation from tariffs and said it may take longer to gauge the full impact of tariffs in inflation data, while he added it is good to see tariffs not driving persistent inflation thus far, and he declined to comment if the market's September rate cut view is correct.
• Fed's Goolsbee (2025 voter) said the labour market might be deteriorating and inflation might be picking back up, while he added there is a bit of wait and see because of uncertainty and that rates are better indicators for the labour market than raw job growth. Goolsbee also commented that the impact of tariffs on price increases is dependent on sector and noted the September Fed meeting is a live meeting, but he hasn't made up his mind.
• Fed Governor nominee Miran said the Fed does not control the long-end of the curve, and if confirmed, he will push back on the Fed straying from the mandate, while he declined to say he would advise Trump not to fire Fed members. Furthermore, Miran said no one in the Trump administration has asked him to lower interest rates and said he has not spoken with anyone at the White House about a possible nomination for a longer Fed term.
• US President Trump made a fresh plea for a ruling allowing him to oust Fed's Cook, according to Bloomberg.
• US President Trump is to sign an order on Friday to rename the Department of Defense to the Department of War, according to a White House official. However, a CBS News reporter noted regarding President Trump signing an executive order to rename the Department of Defense to the Department of War, that it will be a secondary title as an official name change requires an Act of Congress.
• Atlanta Fed Q3 GDPNow: 3.0% (prev. 3.0%)

APAC TRADE

EQUITIES

• APAC stocks mostly took their cues from the gains on Wall Street where participants digested soft labour metrics and dovish Fed speak ahead of today's NFP report.
• ASX 200 was led higher by outperformance in real estate, tech and consumer discretionary, although gains were capped with the commodity-related sectors, consumer staples and utilities at the other end of the spectrum.
• Nikkei 225 rallied at the open and briefly returned to above the 43,000 level after US President Trump signed an Executive Order to officially implement the US-Japan trade deal in which the US will apply a baseline 15% tariff on nearly all Japanese imports, although some of the gains were pared amid a firmer yen and an acceleration in Labour Cash Earnings.
• Hang Seng and Shanghai Comp conformed to the constructive mood following recent tech-related support pledges by Beijing and with DeepSeek targeting an AI agent release by year-end, while reports also noted the PBoC may inject reasonably ample liquidity this month and that cities in China are said to examine new tactics to buy unsold homes.
• US equity futures mostly lingered around this week's best levels after recent dovish tailwinds and as key US jobs data looms.
• European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market finished with gains of 0.4% on Thursday.

FX

• DXY marginally softened overnight as participants braced for the incoming Non-Farm Payrolls report, which follows predominantly weaker jobs-related data releases on Thursday. There were also recent dovish-leaning comments from Fed's Williams who expects gradual interest rate cuts over time if the economy meets his forecasts, while he also sees a gradual cooling in the job market and reduced upside risk to inflation from tariffs, but declined to comment on whether the market's September rate cut view is correct.
• EUR/USD rebounded from yesterday's trough to gain a firmer footing at the 1.1600 handle but with further upside capped by a lack of major catalysts from the bloc.
• GBP/USD mildly gained amid the softer dollar and with participants also awaiting UK Retail Sales data scheduled later.
• USD/JPY trickled closer towards the 148.00 level to the downside after mixed data including the hotter-than-expected Labour Cash Earnings which showed the fastest pace of increase in seven months, while Real Cash Earnings unexpectedly grew for the first time in seven months.
• Antipodeans eked modest gains alongside the mostly constructive mood, but with the upside capped in the absence of data from both Australia and New Zealand.

FIXED INCOME

• 10yr UST futures slightly extended on the prior day's rally owing to soft labour gauges and dovish Fed speak.
• Bund futures held on to gains after EU Retail Sales missed and heading into German Factory orders data.
• 10yr JGB futures tracked the gains in global counterparts despite mixed data releases from Japan including firmer-than-expected Labour Cash Earnings.

COMMODITIES

• Crude futures were contained after recent declines and reports that OPEC-8 are mulling another production hike at the meeting on Sunday, while demand was also not helped by the surprise build in the weekly EIA headline crude stockpiles.
• US EIA Weekly Crude Stocks w/e 2.415M vs. Exp. -2.031M (Prev. -2.392M).
• OPEC August Oil output +360k BPD from July to 27.84mln BPD, according to the Reuters survey.
• Russian Deputy PM Novak said OPEC-8 are not discussing production increase now and no agenda has been set for the upcoming OPEC+ meeting yet, while he added that current market conditions and forecasts are to be considered. Novak also said the OPEC+ deal shows its effectiveness and the level of implementation of OPEC+ deal is 102% in January-August.
• Spot gold kept afloat in rangebound trade after yesterday's sideways price action and with the NFP report on the horizon.
• Copper futures steadily gained alongside the mostly positive risk appetite in the Asia-Pac region.

CRYPTO

• Bitcoin gradually edged higher after returning to above the USD 111k level.

NOTABLE ASIA-PAC HEADLINES

• PBoC may inject reasonably ample liquidity into the money markets this month, according to China Securities Journal.

DATA RECAP

• Japanese Overall Lab Cash Earnings (Jul) 4.1% vs. Exp. 3.0% (Prev. 2.5%, Rev. 3.1%)
• Japanese Real Cash Earnings YY (Jul) 0.5% vs Exp. -0.6% (Prev. -1.3%, Rev. -0.8%)
• Japanese All Household Spending MM (Jul) 1.7% vs. Exp. 1.3% (Prev. -5.2%)
• Japanese All Household Spending YY (Jul) 1.4% vs. Exp. 2.3% (Prev. 1.3%)

GEOPOLITICS

MIDDLE EAST

• IDF spokesperson said their forces are operating within Gaza City and currently control 40% of the city's territory, according to journalist Amichai Stein.
• White House envoy Witkoff met with Qatari officials in Paris and discussed with them efforts to reach a hostage deal that would end the war in Gaza, according to Axios' Ravid citing sources.

RUSSIA-UKRAINE

• US President Trump said he will speak to Russian President Putin in the near future and they are going to get the war in Ukraine settled.
• US is to cut some security funds for European countries bordering Russia, as Washington pushes NATO allies to pay more towards their own defence, according to FT.
• Kremlin's Peskov said security guarantees for Ukraine cannot be provided by foreign military contingents, while the Kremlin said the level of the Russian negotiating team with Ukraine is already quite high and a huge amount of work needs to be done before there could be a meeting between Russia and Ukraine at a higher or the highest level, according to RIA.

OTHER

• South Korea, Japan and US militaries will conduct a joint aerial, naval and cyber defence exercise from September 15th.
• North Korean leader Kim returned to North Korea following a summit with Chinese President Xi, while Kim told Xi about strengthening strategic cooperation and protecting common interests in international and regional issues. Furthermore, the leaders exchanged candid opinions on strengthening high-ranking strategic communication and Kim said that North Korea will continue to support China to protect its sovereignty, territory and development interests, according to KCNA.
• US Secretary of State Rubio announced a new US visa restriction policy and will restrict US visas for Central American nationals who act on behalf of China.
• US and Taiwanese defence officials held secret talks in Alaska, according to FT.
• US Defense Department said two Venezuelan military aircraft flew near a US Navy vessel in international waters.