• BoJ kept rates unchanged at 0.50%, as expected, but surprised markets with the announcement to begin selling ETF and J-REIT holdings.
• US President Trump said he will be harsh if he has to ask Russian President Putin for a ceasefire, but it doesn't feel like the time to do so.
• US President Trump reportedly seeks to speed up large power projects to meet AI demand.
• APAC stocks traded mixed as the region only partially sustained the momentum from Wall St, where the S&P 500, DJIA and NDX climbed to fresh record highs.
• European equity futures indicate an uneventful cash market open with Euro Stoxx 50 futures flat after the cash market closed with gains of 1.6% on Thursday.
• Looking ahead, highlights include UK Retail Sales (Aug), German Producer Prices (Aug), Canadian Retail Sales (Jul), Quad Witching, Trump-Xi phone call, Speakers include BoJ Governor Ueda, Speakers including ECB's Lagarde, Fed's Daly, Miran, & Former Fed President Bullard.

SNAPSHOT

• Click for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks gained albeit in a choppy fashion with sentiment helped by better-than-expected data and outperformance was seen in the small-cap Russell 2000, while the Nasdaq 100 also saw decent gains as tech led the advances across the sectors and was buoyed by NVIDIA investing USD 5bln in Intel - this provided tailwinds for most semi names, aside from AMD and TSMC, as it is seen as a threat to their competitiveness.
• SPX +0.48% at 6,632, NDX +0.95% at 24,455, DJI +0.27% at 46,142, RUT +2.51% at 2,468.
• Click here for a detailed summary.

TARIFFS/TRADE

• US House Select Committee on CCP sent a letter to US President Trump, urging action in response to China's weaponisation of critical minerals supply chains. To counter these practices, the recommended reciprocal measures include restricting or suspending Chinese airline landing rights at US and allied airports until China restores fair and open export flows, reviewing and potentially tightening export controls on commercial aircraft, parts, and services to China, as well as coordinating with allies to restrict outbound investments into China’s aviation sector.
• Mexico's President Sheinbaum said she had an excellent conversation with Canadian PM Carney and agreed with Canada to strengthen the USMCA free trade agreement, while she added they will continue to work together with respect.
• Canadian PM Carney said they are committed to a shared partnership with the US and will create a new bilateral security dialogue with Mexico, as well as commented that they can find adjustments to boost competitiveness in North America.

NOTABLE HEADLINES

• US President Trump’s administration asked the US Supreme Court to allow President Trump’s firing of Federal Reserve Governor Lisa Cook.
• Fed Governor Cook urged the US Supreme Court to reject US President Trump's request to immediately allow him to remove her, according to a filing.
• US House Republicans sent a letter to Fed Chair Powell requesting actions to curb financial fraud.
• US President Trump reportedly seeks to speed up large power projects to meet AI demand, with the administration seeking to speed the development of power plants, power lines and other energy projects that can help meet rising electricity demand from AI and manufacturing, according to Bloomberg.
• US President Trump's administration is considering a plan to spur the construction of factories and other infrastructure to boost the US manufacturing sector using the USD 550bln fund established through negotiations with Japan, according to WSJ.
• US President Trump posted that House Republicans will vote to pass a clean funding bill on Friday and that "The Leader of the Democrats, Cryin’ Chuck Schumer, wants to shut the Government down. Republicans want the Government to stay open. Every House Republican should UNIFY, and VOTE YES!"
• US House Speaker Johnson said he believes they have the votes to pass the stopgap funding bill, while US Senate Majority Leader Thune said the Senate will also vote on a House stopgap bill on Friday.
• White House is considering additional candidates for CFTC chair as the confirmation process for Brian Quintenz has stalled, while possible candidates include government officials focused on crypto policy, according to Bloomberg.

BOJ

• BoJ kept rates unchanged at 0.50%, as widely expected, with the decision made by a 7-2 vote in which Board members Takata and Tamura proposed a 25bps rate hike. Nonetheless, the central bank surprised markets with the announcement to begin selling its ETF and J-REIT Holdings at a pace of JPY 330bln per year and JPY 5bln per year, respectively, with the decision on ETF and J-REIT sales made by unanimous vote, while it stated the pace of sales may be modified at future MPMs after the start of ETF and J-REIT disposals, based on fundamental principles and experience from sales conducted.
• BoJ also stated that Japan's economy is recovering moderately, although some weakness has been seen and noted that private consumption has been resilient and inflation expectations have risen moderately, but exports and output remain more or less flat as a trend. Furthermore, it stated that Japan's economic growth is likely to slow due to the impact of trade policies on global growth, but re-accelerate, and Japan's underlying inflation to stagnate due to a slowdown in economic growth, but gradually accelerate thereafter.

APAC TRADE

EQUITIES

• APAC stocks traded mixed as the region only partially sustained the momentum from Wall St, where the S&P 500, DJIA and NDX climbed to fresh record highs as risk sentiment was supported by encouraging data, while participants digested a surprise announcement by the BoJ to begin selling its ETF and J-REIT holdings.
• ASX 200 climbed higher with a couple of the defensive sectors leading the advances and with most industries in the green aside from telecoms.
• Nikkei 225 rallied at the open after the latest CPI data mostly matched estimates but softened from the previous, although the index has slightly pulled back from all-time highs with some jitters seen as participants awaited the 'delayed' BoJ announcement, while downside accelerated after the BoJ decided to begin selling ETF and J-REIT holdings.
• Hang Seng and Shanghai Comp were rangebound amid tentativeness ahead of the scheduled Trump-Xi call and with ongoing trade-related uncertainty, while the US House Select Committee on the CCP urged action in a letter to US President Trump in response to China's weaponisation of critical minerals supply chains.
• US equity futures took a breather after the recent choppy performance and record highs on Wall St, while quad witching also looms.
• European equity futures indicate an uneventful cash market open with Euro Stoxx 50 futures flat after the cash market closed with gains of 1.6% on Thursday.

FX

• DXY held on to recent spoils after extending on the post-Powell gains with upside facilitated by data, including a drop in initial jobless claims and a strong Philly Fed survey.
• EUR/USD traded sideways overnight following its failure to hold on to the 1.1800 status owing to the recent strength in the buck.
• GBP/USD lingered firmly beneath the 1.3600 handle after retreating yesterday in the aftermath of the US data releases and the BoE policy announcement in which the central bank kept rates unchanged and slowed the pace of QT, as expected.
• USD/JPY gradually retreated after the BoJ rate decision in which the central bank kept rates unchanged at 0.50%, as expected, but surprised markets with the announcement to begin selling ETF and J-REIT holdings.
• Antipodeans were subdued amid the mixed risk sentiment and with a lack of pertinent data for Australia, while New Zealand trade data showed a decline in exports.
• PBoC set USD/CNY mid-point at 7.1128 vs exp. 7.1174 (Prev. 7.1085).

FIXED INCOME

• 10yr UST futures languished beneath the 113.00 level after retreating yesterday following better-than-expected US data.
• Bund futures remained subdued after slipping to a weekly low, with German Producer Prices scheduled later today.
• 10yr JGB futures were pressured after the BoJ policy meeting, where the central bank kept rates unchanged but surprisingly announced to begin selling its ETF and J-REIT holdings.

COMMODITIES

• Crude futures were subdued after the choppy performance seen during the prior day, with headwinds seen following US President Trump's comments on oil and with the EU reportedly planning to phase out Russian LNG quicker than expected.
• US President Trump said there is a lot of oil left in the North Sea and needs oil prices to come down further.
• Spot gold gradually edged higher overnight after prices were recently constrained by a firmer dollar.
• Copper futures traded rangebound near this week's trough amid the ultimately mixed risk appetite in Asia.

CRYPTO

• Bitcoin lacked conviction and traded rangebound on both sides of the USD 117k level.

NOTABLE ASIA-PAC HEADLINES

• Japanese LDP lawmaker Takaichi is to propose an income tax cut and cash payout to households in a campaign pledge for the ruling party leadership race, while she will call for gradually lowering the ratio of government debt to GDP in her campaign pledge, according to Nikkei.

DATA RECAP

• Japanese National CPI YY (Aug) 2.7% vs Exp. 2.8% (Prev. 3.1%)
• Japanese National CPI Ex. Fresh Food YY (Aug) 2.7% vs Exp. 2.7% (Prev. 3.1%)
• Japanese National CPI Ex. Fresh Food & Energy YY (Aug) 3.3% vs Exp. 3.3% (Prev. 3.4%)

GEOPOLITICS

MIDDLE EAST

• Israeli Army warned of a second wave of attacks on South Lebanon, according to Bloomberg.
• Lebanese Army said Israeli aggressions and violations hinder its deployment in southern Lebanon and continued attacks and violations will hinder implementation of its plan, beginning from the southern Litani area, according to Sky News Arabia.
• German Chancellor Merz said they will have an answer to the Israel sanctions debate within the EU over the next week, and will reach a decision before the Copenhagen summit. Merz said he shares Spain's criticism of Israel's conduct, but does not share their belief that it constitutes genocide, while he shares the assessment that Israel's actions in Gaza are not proportional to their stated goals.
• French President Macron told Israel's Channel 12 that the return of UN sanctions on Iran will happen, while WSJ's Norman posted that Macron thinks a snapback is a done deal, because the latest news they had from the Iranians is not serious.
• WSJ's Norman said he was hearing that Iran might withdraw the resolution they crafted with Russia, condemning attacks on its nuclear sites, and that it was headed for defeat at the IAEA general conference.

RUSSIA-UKRAINE

• US President Trump said he will be harsh if he has to ask Russian President Putin for a ceasefire, but it doesn't feel like the time to do so. Trump also commented that drones in Poland should not have been that close, and he was unhappy with NATO when he saw they were buying oil from Russia.
• US President Trump said he wants to help the UK be strong, while it was also reported that UK PM Starmer agrees that Europe has to stop buying oil from Russia.

EU/UK

DATA RECAP

• UK GfK Consumer Confidence (Sep) -19.0 vs. Exp. -18.0 (Prev. -17.0)