• 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 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.
• European bourses are mostly firmer but with trade tentative ahead of NFP; Broadcom +7% after strong results.
• USTs are incrementally firmer whilst USD dips awaiting US NFP; Gilts lead after Retail Sales.
• Crude was pressured but now flat pre-OPEC, Gold holds around USD 3,550/oz into the US jobs report.
• Looking ahead, US Jobs Report (Aug), Canadian Jobs Report (Aug).

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.
• 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.
• Indian oil skips US crude and buys Nigerian and Middle Eastern oil via tender, according to Reuters sources.
• Swiss Economy Minister set to visit the US this weekend, according to EconomieSuisse.

EUROPEAN TRADE

EQUITIES

• European bourses (STOXX 600 +0.3%) opened modestly firmer across the board but dipped slightly off best levels in early-morning trade. Currently, still displaying a positive picture in Europe, but are off best levels.
• European sectors hold a positive bias, and with the breadth of the market to the downside fairly narrow. Basic Resources takes the top spot, buoyed by strength in underlying metals prices. Tech follows closely behind, with the sector boosted by a trifecta of factors; 1) strong Broadcom results, 2) broker upgrade for STMicroelectronics, 3) broker upgrade for ASML. On the latter, ASML was upgraded to Buy from Neutral at UBS and got a 13% boost to its PT. Analysts cite recent underperformance, and note that the "overhang" from China is well understood by investors.
• US equity futures are ever so slightly firmer, as markets await the much-anticipated NFP report. Some outperformance in the NQ, boosted by Broadcom results. In terms of pre-market movers; Broadcom’s shares rise 7% in pre-market trade after it issued Q4 revenue guidance above expectations, and announced a new large AI customer. Elsewhere, Lululemon shares plunge more than 17.5% in pre-market trade after the company issued full-year guidance well below expectations.
• Foxconn (2317 TT) August Revenue +10.61% Y/Y; expects significant rise in cloud and networking product shipments, maintaining strong growth trend.
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FX

• After a resilient showing in the wake of soft labour metrics yesterday, DXY is on the backfoot in the run up to the August payrolls report. For today's release, expectations are for a modest uptick in payrolls to 75k from 73k and for the unemployment rate to rise to 4.3% from 4.2%. DXY has slipped below yesterday's trough @ 98.08 and is sat around its 50DMA at 98.05.
• EUR is currently taking advantage of the broadly weaker USD. Newsflow surrounding the Eurozone is light during today's trade and therefore the dollar is likely to be in the driving seat for EUR/USD. Traders are mindful of French political risk at the start of next week with PM Bayrou set to face a confidence vote on Monday. Betting markets are overwhelmingly expecting him to suffer a defeat. Desks have touted a move towards 90bps (2024 peak) in the event Bayour is defeated with the risk of a venture to 100bps if fresh elections are called. The follow-through into the EUR may be limited by the looming ECB rate decision and accompanying macro projections. EUR/USD has moved back above its 50DMA at 1.1664 with clean air until the 1.17 mark.
• USD/JPY has 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. On the trade front, the White House said US President Trump signed an Executive Order officially implementing the US-Japan trade agreement. On the trade front, the White House said US President Trump signed an Executive Order officially implementing the US-Japan trade agreement. Subsequently, Japanese PM Ishiba reiterated they will work to minimise the impacts on the economy. For USD/JPY, a soft NFP print could see the pair lose its footing on a 148 handle and head towards Thursday's low at 147.78.
• GBP is firmer vs. the USD but not showing much in the way of outperformance relative to peers despite a better-than-expected outturn for UK retail sales. Commenting on the release, Pantheon Macroeconomics observes that the ONS made major revisions to retail sales today by correcting seasonal factors. As such, H1 retail sales were actually softer than initially assumed. For the BoE, following the data and the MPC's appearance before the TSC earlier in the week, Investec now expects that the Bank rate will remain on hold over the remainder of the year at 4.00%. Cable has eclipsed Thursday's best at 1.3460 and is now eyeing the 50DMA at 1.3477.
• Antipodeans are both are firmer vs. the USD and towards the top of the G10 leaderboard in what has been a choppy/directionless week for AUD/USD and NZD/USD. Fresh macro drivers from Australia and New Zealand are lacking and as such, both pairs' fates are likely to be determined by events stateside and broader risk dynamics.
• CAD is marginally stronger vs. the USD in the run up to Canadian and US labour market reports, both due at 13:30BST. It is likely that the latter will deliver the greatest source of traction for the pair.
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FIXED INCOME

• USTs are contained into NFP. Holding in a very thin 112-28 to 113-00 band, but at a WTD high and comfortably above the week’s 112-15+ opening mark. NFP is expected to inch higher to 75k (prev. 73k) in August, though revisions to the series will undoubtedly draw attention, particularly as Trump has replaced the BLS head since the last report.
• OATs are firmer counting down to Monday’s confidence vote. The base case remains that PM Bayrou will lose. Thereafter, President Macron is likely to try and appoint a new PM in an attempt to bring the centrist bloc and the Left closer; current Finance Minister Lombard is a potential candidate. The bias for OAT-Bund 10yr spread is likely some further widening, though the fall of Bayrou itself is likely already priced at this stage.
• Bunds are trading in-line with USTs. Specifics for the EZ light, aside from more updates (downgrades) to the German growth outlook from domestic bodies. Elsewhere, China has announced preliminary anti-dumping measures on the EZ, though this has had no discernible effect. Currently at the upper end of a 128.52-74 band, at a fresh WTD high and looking to 128.81 and 128.87 from last week.
• Gilts are outperforming, higher by just over 40 ticks at most in 90.65-87 parameters. Despite the stronger-than-expected UK retail metrics for July, the ONS’ revision YTD data has trimmed the H1 monthly average by 10bps. Revisions which have seemingly provided some bullish impetus for Gilts. Though, ultimately, the revision is unlikely to change the BoE’s trajectory and the strength may just be more a case of Gilts continuing the move seen in the last few days and paring some of the recent pressure spurred by fiscal jitters.
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COMMODITIES

• Crude futures were lower but now flat 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. In geopolitics, Russia's Kremlin says the next round of Russian President Putin and US President Trump talks are possible in the near future, via Ria. This follows on from Trump saying he will speak to Putin to get the war in Ukraine settled. WTI currently resides in a 63.04-63.42/bbl range while Brent sits in a USD 66.59-66.97/bbl range.
• Spot gold is kept afloat in rangebound trade after yesterday's sideways price action and with the NFP report on the horizon. Spot gold resides in a USD 3,540.01-3,561.28/oz range at the time of writing, yesterday's range between USD 3,511.75-3,564.15/oz, and with the all-time-high set on Wednesday at USD 3,578.66/oz.
• Copper futures steadily gain alongside the mostly positive risk appetite in the Asia-Pac region and then Europe. 3M LME copper remains under USD 10k after recently topping the level. The contract currently trades in a USD 9,895.30-9,991.45/t range awaiting the US jobs report.
• 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.
• Aluminium producers seek USD 98-103/t in Oct-Dec premiums in talks with Japan, down 5-9% from current quarter levels, via Reuters citing sources.
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NOTABLE DATA RECAP

• UK Retail Sales MM (Jul) 0.6% vs. Exp. 0.2% (Prev. 0.9%, Rev. 0.3%); Ex-Fuel MM (Jul) 0.5% vs. Exp. 0.4% (Prev. 0.6%)
• UK Retail Sales YY (Jul) 1.1% vs. Exp. 1.3% (Prev. 1.7%, Rev. 0.9%); Ex-Fuel YY (Jul) 1.3% vs. Exp. 1.2% (Prev. 1.8%, Rev. 1.3%)
• French Trade Balance, EUR, SA (Jul) -5.56B (Prev. -7.623B, Rev. -7.16B); Imports, EUR (Jul) 57.67B (Prev. 58.253B, Rev. 57.969B); Exports, EUR (Jul) 52.12B (Prev. 50.63B, Rev. 50.81B)
• Italian Retail Sales NSA YY (Jul) 1.8% (Prev. 1.0%); SA MM (Jul) 0.0% (Prev. 0.6%)
• EU GDP Revised QQ (Q2) 0.1% vs. Exp. 0.1% (Prev. 0.1%); Employment Final QQ (Q2) 0.1% (Prev. 0.1%)

NOTABLE EUROPEAN HEADLINES

• German GDP growth is exp. to grow by 0.2% in 2025 (prev. saw 0.3%); sees growth of 1.7% in 2026 and 1.8% in 2027, via DIW.

NOTABLE US HEADLINES

• 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.
• 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.
• US House Speaker Johnson has, in an interview with Punchbowl, opened the door somewhat to extending Obamacare subsidies that are scheduled to expire at end-2025.

GEOPOLITICS

RUSSIA-UKRAINE

• Russia's Kremlin says the next round of Russian President Putin and US President Trump talks are possible in the near future, via Ria
• 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.
• 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.
• Russian President Putin says "we have open dialogue with US President Trump"; have not yet spoken to Trump. Russia assumes military contingents in Ukraine will be legal targets for strikes and sees no sense in their deployment if there is a peace deal. Adds, "we are ready for a summit with Ukraine, please come to Russia, we will provide security"; says the best place for a summit is Moscow.
• Iranian delegation will be in Vienna for IAEA talks today, via WSJ's Norman.
• EU Energy Commissioner says if there is a Russia-Ukraine peace deal, "we should still not return to Russian energy", adding this is not a temporary sanction; US supports that EU stops Russian energy imports. Will meet US Energy Secretary next week to discuss the trade deal.
• Ukrainian President Zelensky says he has spoken with NATO's Rutte, security guarantee work needs to be accelerated.

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.

CRYPTO

• Bitcoin is firmer today and trades around USD 113k, whilst Ethereum also moves higher and marginally tops USD 4.4k.

APAC TRADE

• 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.

NOTABLE ASIA-PAC HEADLINES

• PBoC may inject reasonably ample liquidity into the money markets this month, according to China Securities Journal.
• Japanese PM Ishiba says they are to compile an economic package this autumn.

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%)