• Poland said its airspace was repeatedly violated by drones during today's attack by Russia on Ukraine; Poland shot down Russian drones after 'unprecedented airspace violation'.
• US President Trump reportedly asked the EU to hit China and India with 100% tariffs to pressure Russian President Putin to end the war.
• US judge temporarily blocked President Trump from removing Federal Reserve Governor Cook.
• French President Macron appointed Sebastien Lecornu as new PM, according to BFM.
• European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market closed with gains of 0.1% on Tuesday.
• Looking ahead, highlights include Norwegian CPI (Aug), US PPI (Aug), Wholesale Sales (Jul), Comments from SNB’s Schlegel, Supply from UK, Germany & US.

SNAPSHOT

• Click for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks were mixed, which saw the SPX and NDX notch slight gains, while the RUT lagged and was weighed down by higher US yields. The US highlight on Tuesday was the Preliminary BLS Benchmark total payroll revisions for March 2025, which were revised down by 911k, a steeper drop than the median estimate compiled by Bloomberg of -682k, and also outside of the BBG forecast range. The revisions initially triggered Dollar weakness and underpinned Treasuries, but with the moves later pared, while geopolitical headlines were also in focus after Israel attacked a Hamas delegation in Qatar.
• SPX +0.27% at 6,513, NDX +0.33% at 23,840, DJI +0.43% at 45,711, RUT -0.55% at 2,382.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump reportedly asked the EU to hit China and India with 100% tariffs to pressure Russian President Putin to end the war, while a US official said that Washington was prepared to mirror any tariffs on China and India imposed by the EU, according to FT.
• US President Trump posted that India and the US are continuing negotiations to address trade barriers and he looks forward to speaking with his very good friend, Indian PM Modi, in the upcoming weeks, while Trump added that he feels certain that there will be no difficulty in coming to a successful conclusion for both nations.
• Indian PM Modi said he is confident India and US trade negotiations will pave the way for unlocking the limitless potential of the India-US partnership, while he added that their teams are working to conclude discussions at the earliest and he looks forward to speaking with US President Trump. It was separately reported that India and US officials are likely to have an exchange of trade delegations soon and an in-person meeting later in September, according to CNBC-TV18.
• US Supreme Court agreed to hear the Trump administration's appeal of the judicial ruling that invalidated most of President Trump's tariffs and it fast-tracked the appeal in the tariffs case.
• US Treasury Secretary Bessent is confident that the Supreme Court will back Trump tariffs, while he added there is a fallback tariff plan, though it is more cumbersome.

NOTABLE HEADLINES

• US President Trump is to crack down on pharmaceutical adverts on TV and social media, while he signed a memo requiring pharma ads to disclose all risks.
• US judge temporarily blocked President Trump from removing Federal Reserve Governor Cook.
• US House Majority Leader Scalise said the White House seeks an extension of current federal funding until January 31st, although the proposal is not finalised.
• US VP Vance said it is difficult to overstate how useless BLS data has become, and a change was necessary to restore confidence.
• US Treasury Secretary Bessent said 2024 job gains were exaggerated by nearly 1mln workers, while he stated President Trump inherited a far worse economy than reported and he is right to say the Fed is choking off growth with high rates.
• Apple (AAPL) announced AirPods Pro 3, Apple Watch Series 11, iPhone 17 and iPhone Air.

APAC TRADE

EQUITIES

• APAC stocks followed suit to the mostly positive handover from Wall St, where the major indices shrugged off large downward job revisions and geopolitical escalation, to approach record levels.
• ASX 200 eked mild gains as outperformance in financials, tech and telecoms atoned for the losses in the mining and materials sectors.
• Nikkei 225 edged higher despite the recent hawkish source reports that the BoJ sees some chance of hiking this year, despite the political situation, with some officials even said to view that a hike could be appropriate as early as October.
• Hang Seng and Shanghai Comp gained with the Hong Kong benchmark led higher by strength in tech, while the mainland lagged after deflationary CPI data and with US President Trump said to have asked the EU to hit China and India with 100% tariffs to pressure Russian President Putin.
• US equity futures held on to recent spoils but with further upside capped ahead of the approaching US PPI and CPI data
• European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market closed with gains of 0.1% on Tuesday.

FX

• DXY paused overnight after strengthening yesterday in a rebound from the two-day post-NFP selling, despite the worse-than-feared BLS revisions, while the announcement that a US judge temporarily blocked US President Trump from removing Fed Governor Cook spurred little reaction as participants now await incoming inflation data including PPI data later, followed by CPI tomorrow.
• EUR/USD lacked firm demand and briefly dipped beneath the 1.1700 handle after it recently gave up ground to the rebound in the dollar, while the single currency was also not helped by the geopolitical backdrop with Poland responding to violation of its airspace by Russian drones and with US President Trump reportedly calling for the EU to impose 100% tariffs on China and India to pressure Russian President Putin.
• GBP/USD struggled for direction after yesterday's price swings, whereby early upward momentum stalled just shy of the 1.3600 territory before reversing course.
• USD/JPY took a breather after its recent oscillations through the 147.00 level with headwinds for the pair stemming from hawkish BoJ sources.
• Antipodeans edged higher amid the mostly positive risk appetite but with gains capped after softer-than-expected and deflationary Chinese CPI data.
• PBoC set USD/CNY mid-point at 7.1062 vs exp. 7.1359 (Prev. 7.1008)

FIXED INCOME

• 10yr UST futures were lacklustre after fading the knee-jerk reaction to the BLS revision, ahead of supply and inflation data.
• Bund futures eked mild gains after rebounding from the 129.00 level, but with upside capped ahead of today's Bund supply.
• 10yr JGB futures were subdued after recent hawkish BoJ source reports, but later saw some mild support after a stronger 5yr JGB auction.

COMMODITIES

• Crude futures were higher following recent geopolitical developments including Israel striking Hamas officials in Qatar, while US President Trump reportedly asked the EU to hit China and India with 100% tariffs to pressure Russian President Putin to end the war in Ukraine. Furthermore, Poland announced it conducted a military operation to neutralise targets after its airspace was repeatedly violated by Russian drones attacking Ukraine.
• US Private Energy Inventory Data (bbls): Crude +1.3mln (exp. -1.0mln), Distillates +1.5mln (exp. +0.0mln), Gasoline +0.3mln (exp. -0.2mln).
• Spot gold recovered overnight after retreating yesterday alongside a firmer buck despite dovish BLS revisions.
• Copper futures gradually climbed alongside the mostly positive risk tone.

CRYPTO

• Bitcoin recouped early losses and returned to flat territory after finding support at the USD 111k level.

NOTABLE ASIA-PAC HEADLINES

• Japan's economic revitalisation minister Akazawa said wage gains should be prioritised over tax cuts.
• South Korea may scrap the plan for a capital gains tax rule revision, while it was separately reported that South Korea will establish 15 task forces made up of members from both the public and private sectors to lead individual projects aimed at creating new growth engines.

DATA RECAP

• Chinese CPI MM (Aug) 0.0% vs. Exp. 0.1% (Prev. 0.4%)
• Chinese CPI YY (Aug) -0.4% vs. Exp. -0.2% (Prev. 0.0%)
• Chinese PPI YY (Aug) -2.9% vs. Exp. -2.9% (Prev. -3.6%)

GEOPOLITICS

MIDDLE EAST

• Israel's ambassador to Washington told Fox News if they can't eliminate Hamas leaders now, they will succeed next time.
• Hamas said Israel failed in its attempt to assassinate the group's negotiation delegation in Doha, while it stated that five members were killed in the attack and it holds the US as jointly responsible for Israel's Doha attack, while it added that Israel's Doha attack will not change their demands to reach a Gaza ceasefire. Furthermore, a Hamas official told Al Jazeera the group leadership survived Israel's attack on Doha, although the son of Hamas leader Al-Hayya was killed.
• US President Trump said the attack on Hamas officials in Doha was a decision made by Israeli PM Netanyahu and not a decision made by himself, while he added that unilaterally bombing inside Qatar, which is a close ally of the US, does not advance Israel or America’s goals and he views Qatar as a strong ally and friend to the US.
• White House said the US was notified by the Pentagon that Israel was attacking Hamas in Qatar on Tuesday morning, which was a unilateral bombing in a sovereign nation, while it added this did not advance Israel or US goals and envoy Witkoff was told to inform Qataris of an impending attack.
• Qatar said reports about being informed of an Israeli attack on Doha beforehand are false, and the call received from a US official came when the sound of an explosion was heard in Doha. It was also reported that Qatar's PM said they reserve the right to respond to the Israeli attack which is treachery and noted the US called Qatar ten minutes after the attack.
• Algeria asked the UN Security Council to meet after Israeli strikes on Qatar.
• IAEA Chief Grossi said he agreed with Iran's Foreign Minister on practical modalities to resume inspection activities in Iran and noted this is an important step in the right direction.
• Iran's Foreign Minister said on a new agreement with the IAEA that in the event of any hostile action against Iran, including the reinstatement of repealed UN Security Council Resolutions, Iran will consider these practical steps as completed, while he added the agreement fully complies with the law issued by Iran's parliament on cooperation with the agency.

RUSSIA-UKRAINE

• Ukraine's military said Kyiv was under a drone attack and air defence units are trying to repel strikes, while Ukraine's Air Force also warned that Russian drones entered Poland's airspace and that the city of Zamosk was under threat.
• Poland's Defence Minister said aircraft have deployed weapons against hostile objects and territorial defence forces have been activated for ground searches of downed drones, while it was later reported that Polish PM Tusk informed NATO Secretary General Rutte about actions they've taken regarding objects that violated their airspace.
• Poland's Army said Polish airspace was repeatedly violated by drones during today's attack by Russia on Ukraine and an operation was conducted to identify and neutralise the targets, while it noted the most vulnerable areas are the Podlaskie, Mazowieckie, and Lublin voivodeships. Polish Army said as a result of Russia’s attack on Ukrainian territory, there was an unprecedented violation of Polish airspace by drone-type objects and that this was an act of aggression that posed a real threat to the safety of citizens.
• Warsaw's main airport and the Rzeszow airport were closed due to unplanned military activity related to ensuring state security.

EU/UK

NOTABLE HEADLINES

• French President Macron appointed Sebastien Lecornu as new PM, according to BFM.
• UK PM Starmer’s "Budget board" is set to meet weekly and has been tasked with coordinating pro-growth policies in the run-up to the November 26 Budget and with keeping business and City leaders engaged, according to officials cited by the FT.
• UK Chancellor Reeves has told her cabinet colleagues that government departments will have their access to the Treasury's emergency funds limited ahead of the budget, according to BBC sources. Note: "The GBP 9bln Treasury Reserve, designed to be used for "genuinely unforeseen, unaffordable and unavoidable pressures" has recently been used to fund higher public sector pay and compensation payouts", BBC writes.