• US President Trump said Iran wants to make a deal and is talking with their people, but he does not know if Iran is ready yet.
• US Envoy Witkoff and Iranian Foreign Minister Araghchi have reportedly been in contact over text messages in recent days; Iran denied these reports.
• US President Trump said regarding the potential Strait of Hormuz coalition that Secretary of State Rubio will announce the countries, while he added it takes a while to get to the Hormuz and that some countries are fairly local.
• The RBA hiked rates for a second consecutive meeting as expected, through a narrow majority of 5-4 votes, which dragged the currency lower. However, AUD later rebounded as RBA Governor Bullock provided a hawkish tone.
• APAC stocks eventually traded mixed, with the region initially following suit to the gains on Wall Street; European equity futures indicate a lower cash market open with Euro Stoxx 50 futures down 0.6%.
• Looking ahead, highlights include Italian HICP Final (Feb), German/EZ ZEW Economic Sentiment Index (Mar), US ADP Employment Weekly, Japanese Trade Balance (Feb), Comments from ECB's Nagel, Supply from UK & US.

SNAPSHOT

• Click for the Newsquawk Week Ahead.

IRAN CONFLICT

• US President Trump said regarding the potential Strait of Hormuz coalition that Secretary of State Rubio will announce the countries, while he added it takes a while to get to the Hormuz and that some countries are fairly local. Furthermore, he has spoken to French President Macron about Hormuz, and on a scale of 0-10, he said Macron has been an 8 and thinks Macron is going to help. Trump also stated he is not happy with the UK but thinks they will be involved.
• US President Trump said Iran wants to make a deal and is talking with their people, but he does not know if Iran is ready yet. Trump said they don't even know Iran’s leaders, and as far as they know, they are all dead. Trump said Iran has people wanting to negotiate, but they have no idea who they are, and he does not know if Khamenei is dead or not.
• US President Trump said other countries should be thanking him, and he's very proud of what they have done, while he added that had they not done this, there would have been a nuclear war. Furthermore, he said China, Japan, and South Korea should be helping them and commented that the war will be wrapped up soon, but not this week.
• US intelligence said Iran's regime will likely remain in place, albeit weakened and more hard-line, according to WaPo.
• US Special Envoy Witkoff is to brief a bipartisan group of senators on Tuesday regarding Iran, according to Axios.
• US Envoy Witkoff and Iranian Foreign Minister Araghchi have reportedly been in contact over text messages in recent days, according to Channel 12. It was separately reported that Iran and the US have been in direct contact in recent days, according to Axios sources. However, it was reported shortly after that Iran said reports of recent contacts with the US are false, and Iran's Foreign Minister Araghchi also said that his last contact with US envoy Witkoff was before the American attack on Iran.
• Iranian officials said the US has crossed the line and they signalled an intention to deliver a major lesson. It was separately reported that Tehran is to strike oil and gas facilities in any country where any US attack on oil facilities on Kharg island originates, according to state media.
• Israeli Defence Forces detected missiles launched from Iran, while it also announced large-scale strikes against Iranian infrastructure and began an additional wave of strikes on Hezbollah infrastructure in Beirut.
• UAE Ministry of Defence said air defences were intercepting missile and drone attacks from Iran, while it announced a temporary and partial closure of its airspace as an exceptional precautionary measure, but later updated that air navigation had returned to normal across its airspace.
• Several explosions were reported in Doha and Dubai following a missile alert, according to AFP.
• Kuwait's army said air defences confronted enemy missile and drone attacks.
• Saudi Arabia said more than 20 drones were intercepted and destroyed in the eastern province.
• Japanese PM Takaichi said the government is exploring SDF Middle East deployment within legal limits and will discuss SDF deployment with parliamentary parties if approval is required.

US TRADE

EQUITIES

• US stocks were firmer as oil prices moved lower after the US targeted Kharg Island over the weekend, but avoided any oil infrastructure, while US President Trump reiterated he thinks the war could be over soon and suggested that Iran has been speaking to the US. Furthermore, it was reported that Iran's Foreign Minister Araghchi and US Special Envoy Witkoff have been in contact by text messaging over recent days which further weighed on oil, although Iran denied this shortly after, and Araghchi said his last contact with Witkoff was prior to the US attack on Iran.
• SPX +1.05% at 6,702, NDX +1.13% at 24,655, DJI +0.83% at 49,946, RUT +0.96% at 2,504.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump's administration has started discussing a new "board of trade" with China to try to balance what US officials see as an unequal economic relationship, according to NYT.
• Mexico's Economy Ministry said the deputy minister is to meet with USTR officials today for USMCA review talks.
• European Union said it is close to finalising a trade deal with Australia after years of negotiations, while EU Commission President Von der Leyen may travel to Australia as soon as this weekend to sign the deal, according to sources.

NOTABLE HEADLINES

• US President Trump signed executive orders to bring more community banks back into the mortgage business and to lower construction costs for building more affordable homes.
• US President Trump reiterated criticisms against Fed Chair Powell, and called for him to have a special meeting and cut rates.
• DoJ asked judge Boasberg to reconsider the ruling that quashed the subpoenas against Fed Chair Powell.
• US Commerce Dept. announced a new AI export program phase and asked for AI export package proposals.
• US SEC is preparing a proposal to eliminate the quarterly earnings report requirement and instead give companies the option to share results twice a year, according to WSJ citing sources.

APAC TRADE

EQUITIES

• APAC stocks eventually traded mixed, with the region initially following suit to the gains on Wall Street, where sentiment was underpinned amid softer yields and oil price declines, although gains were capped overnight as oil prices partially rebounded and with participants bracing for this week's central bank bonanza, which was kicked off by the RBA, which delivered a widely expected back-to-back 25bps rate hike.
• ASX 200 was kept afloat as gains in miners, utilities, and financials offset the losses in tech and consumer discretionary, although the upside was limited amid the RBA rate decision, in which the central bank hiked rates for the second consecutive meeting in a 5-4 vote split.
• Nikkei 225 briefly reclaimed the 54,000 status but later fell into the red as oil partially rebounded from an early trough.
• Hang Seng and Shanghai Comp were mixed with the Hong Kong benchmark outperforming in early trade amid strength in consumer stocks, while the mainland lagged after US President Trump revealed the US asked to delay the Trump-Xi summit by a month or so due to the Iran war.
• US equity futures slightly pulled back following Monday's gains, with recent price action largely driven by oil swings.
• European equity futures indicate a lower cash market open with Euro Stoxx 50 futures down 0.6% after the cash market closed with gains of 0.4% on Monday.

FX

• DXY regained some composure after weakening yesterday with recent price action largely at the whim of oil prices, while the focus remained on geopolitics, although there was nothing too escalatory, and President Trump said that Iran wants to make a deal and is talking to their people. Furthermore, it was reported that Iran's Foreign Minister Araghchi and US Envoy Witkoff were in contact over text messages in recent days, although Iran has since refuted the reports of recent contacts.
• EUR/USD retraced some of the prior day's advances and returned to beneath the 1.1500 handle as the dollar regained some composure, while there was little reaction seen to reports that the EU is close to finalising a trade deal with Australia after years of negotiations.
• GBP/USD partially faded its gains and retested the 1.3300 level to the downside, where it found some slight support, but with price action contained amid the lack of fresh catalysts for the UK.
• USD/JPY rebounded from a brief dip to sub-159.00 territory with upside facilitated as the dollar and oil partially recovered.
• Antipodeans were mixed after recent outperformance and with AUD/USD choppy following the RBA decision to hike rates for a second consecutive meeting, through a narrow majority of 5-4 votes, which dragged the currency lower. However, AUD later rebounded as RBA Governor Bullock provided a hawkish tone during the press conference as she stated that the rise in oil prices is not the reason for the rate increase and that inflation was already too high, while she added that the dissenters voted to hold in a hawkish sense and that the discussion was about the timing, and not the direction of policy and hike.
• PBoC set USD/CNY mid-point at 6.8961 vs exp. 6.8874 (Prev. 6.9057)

FIXED INCOME

• 10yr UST futures slightly pulled back after gaining yesterday as yields softened alongside lower oil prices and weak US data, while demand is constrained overnight ahead of a looming flurry of central bank activity and with US supply scheduled later.
• Bund futures were rangebound following the recent choppy, but positive performance, in which prices returned to above the 126.00 level, although further upside was capped heading into German ZEW data.
• 10yr JGB futures traded indecisively but are off the initial lows after rebounding from a brief dip beneath the 131.00 level and following the mixed 20yr JGB auction which resulted in a higher-than-previous bid-to-cover but lower accepted prices.

COMMODITIES

• Crude futures rebounded overnight after declining yesterday as the Iran war dragged on, but with no major escalation, while there was pressure seen in late US trade on reports that US Special Envoy Witkoff and Iranian Foreign Minister Araghchi have been in contact in recent days. However, Iran denied this shortly after, which alongside Iranian attacks on its neighbouring energy assets, facilitated a recovery in oil.
• Gulf Cooperation Council's regional emergency plan committee for petroleum products held an urgent meeting to discuss regional developments and maintain continuity of refined product supplies, according to Saudi state TV.
• Two explosive drones hit Iraq’s Southern Majnoon oilfield.
• UAE's Fujairah confirmed a fire in its petroleum industrial area, while Abu Dhabi's Shah gas field operations were suspended pending damage assessment, after a drone attack caused a fire earlier.
• Spot gold gradually edged higher after rebounding from a brief dip beneath the USD 5,000/oz level.
• Copper futures plateaued overnight after gaining throughout the prior day alongside the positive risk sentiment.

CRYPTO

• Bitcoin wiped out early gains and more, after stalling just shy of the USD 76,000 level.

NOTABLE ASIA-PAC HEADLINES

• China's Ministry of Finance said more proactive fiscal policy is to continue in 2026, while it is to support the domestic market and self-reliance in tech, as well as ensure necessary expenditure levels.
• BoJ Governor Ueda said the price trend is rising gradually and underlying inflation is gradually accelerating towards the 2% target. Ueda added that they will implement appropriate policy to maintain stable prices and will guide monetary policy suitably to steadily and durably achieve the 2% price target. Furthermore, he expects underlying inflation to approach the target in the latter half of fiscal 2026 through fiscal 2027 and reaffirmed the stance that the BoJ will act flexibly in exceptional situations when JGB yields suddenly rise.
• RBA hiked the Cash Rate by 25bps to 4.10%, as expected, with the decision made by a majority decision in which five members voted for a 25bps hike, and four voted to leave the Cash Rate unchanged. RBA noted a material risk that inflation will stay above target for longer and that inflation risks have tilted further to the upside, while it added that the Board will do what’s necessary to deliver price and jobs goals. RBA stated short-term inflation expectations have already risen and that the conflict in the Middle East poses substantial risks in both directions and has resulted in sharply higher fuel prices, which, if sustained, will add to inflation. Furthermore, it will be attentive to data, the evolving outlook, and risks in its decisions.
• RBA Governor Bullock said in the post-meeting press conference that the rise in oil prices is not the reason for the rate increase and that inflation was already too high, while she added that risks to inflation are to the upside and the Cash rate was not high enough to bring inflation back to the target. Bullock stated that all members agreed inflation was too high and they had a very robust meeting in which the discussion was about timing, not the direction of policy and hike. Furthermore, she said members that voted to hold, voted in a hawkish sense and that the difference was timing, as those who voted against a hike still felt the need for an eventual rate increase.

GEOPOLITICS

OTHER

• US President Trump said he believes he'll have the honour of 'taking Cuba'. It was also reported that the Trump administration was said to tell Cuba its president has to go for there to be meaningful progress in negotiations, according to NYT.
• Pakistan confirmed it carried out airstrikes on Kabul and Nangarhar, while the Afghan government said the death toll from a Pakistani raid targeting a hospital has risen to 400.