- US stocks began the week on the front foot with outperformance in the Nasdaq 100 which was buoyed by gains in Nvidia (+4.4%) in a day of very sparse newsflow and a very quiet calendar. Nonetheless, all sectors were exclusively in the green with large-cap Technology, Communication Services, and Consumer Discretionary at the top of the pile, while Consumer Staples and Energy were the respective laggards but still finished higher with gains in the latter capped amid pressure in the crude complex owing to continued Gaza ceasefire talks and Chinese economic concerns.
- USD tumbled throughout the day amid strength in its major counterparts and the DXY slipped beneath the 102.00 level despite the thin newsflow and quiet data calendar, while there were comments from Fed's Kashkari who noted debate about potentially cutting rates in September is an appropriate one to have although he doesn't see any reason to cut rates by greater increments than 25bps.
- Looking ahead, highlights include New Zealand Trade Data, PBoC Loan Prime Rates, RBA Minutes, Supply from Japan.
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LOOKING AHEAD
- Highlights include New Zealand Trade Data, PBoC Loan Prime Rates, RBA Minutes, Supply from Japan.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks began the week on the front foot with outperformance in the Nasdaq 100 which was buoyed by gains in Nvidia (+4.4%) in a day of very sparse newsflow and a very quiet calendar. Nonetheless, all sectors were exclusively in the green with large-cap Technology, Communication Services, and Consumer Discretionary at the top of the pile, while Consumer Staples and Energy were the respective laggards but still finished higher with gains in the latter capped amid pressure in the crude complex owing to continued Gaza ceasefire talks and Chinese economic concerns.
- SPX +0.97% at 5,608, NDX +1.32% at 19,766, DJIA +0.58% at 40,897, RUT +1.2% at 1.19% at 2,168.
- Click here for a detailed summary.
NOTABLE HEADLINES
- Fed's Kashkari (2026 Voter) said a debate about potentially cutting rates in September is an appropriate one to have and in his view, the balance of risks has shifted more towards the labour market and away from the inflation side of our dual mandate. Kashkari said he doesn't see any reason to cut rates by greater increments than 25bps "because layoffs remain low and claims for unemployment benefits don’t suggest a notable deterioration", according to WSJ.
- US VP Harris proposed raising the corporate tax rate to 28%, according to NBC News.
DATA RECAP
- US Leading Index Change MM (Jul) -0.6% vs. Exp. -0.3% (Prev. -0.2%)
FX
- USD tumbled throughout the day amid strength in its major counterparts and the DXY slipped beneath the 102.00 level despite the thin newsflow and quiet data calendar, while there were comments from Fed's Kashkari who noted debate about potentially cutting rates in September is an appropriate one to have although he doesn't see any reason to cut rates by greater increments than 25bps.
- EUR benefitted from the pressure in the greenback which saw EUR/USD gain a firmer footing at the 1.1000 handle.
- GBP strengthened albeit with further advances against the dollar capped by resistance just shy of the 1.3000 territory.
- JPY was firmer although off today's best levels with USD/JPY back above the 146.00 level.
FIXED INCOME
- T-notes were choppy as a slew of corporate issuance initially weighed although prices later recovered amid a lack of conviction in the absence of any major catalysts and as participants await the key events later in the week.
COMMODITIES
- Oil prices were lower to start the week amid continued Gaza ceasefire talks and ongoing Chinese economic concerns.
- Production at Libya's Sharara oilfield rose to 85k BPD to supply the Zawia oil refinery.
GEOPOLITICAL
MIDDLE EAST
- Israel conducted a strike which targeted a Hezbollah arms depot in Lebanon's Bekaa valley, according to Reuters citing two security sources.
- Israeli PM Netanyahu told US Secretary of State Blinken he intends to send the negotiating team later this week to a follow-up summit in Cairo on the hostage deal, according to a source cited by Axios' Ravid. It was also reported that Israeli PM Netanyahu confirmed they are working to release the largest number of hostages in the first phase of the deal, according to Al Arabiya.
- US Secretary of State Blinken made it clear to Israeli PM Netanyahu that the US expects negotiations to continue until an agreement is reached, according to Al Jazeera citing Axios sources. It was separately reported that Blinken said everyone should avoid taking steps or measures that escalate tensions and expand violence, while the meeting with Netanyahu was constructive and Netanyahu assured him Israel accepted the proposal which Hamas must now accept.
- White House official said senior officials will convene for Gaza ceasefire negotiations in Cairo before the end of the week.
- Senior Hamas official said they agreed to the proposal made by US President Biden and the US administration failed to convince Netanyahu of it, while the official said the Israelis retracted issues included in Biden's paper and Netanyahu's talk about approving an updated proposal means the US failed to convince him of the agreement. Furthermore, the Hamas official said they only want to implement President Biden's proposal which they agreed to and they do not know the exact updated proposal, but the Israeli delegation that came to Doha presented conditions that contradict it, according to Al Jazeera.
- Sources close to Hezbollah told Lebanon's Al-Jadid TV that Hezbollah tied its response to the killing of Fouad Shukr in Beirut to the outcome of the negotiations which is similar to assessments made by Israeli and American officials, according to Kann News. However, the sources said that with Hamas' rejection of the latest proposal, Hezbollah felt that it was freed from the limitations of waiting for the outcome of the negotiations.
- Iran's Foreign Ministry said they affirm the right to respond to the attack on their sovereignty and will do so at the appropriate time, while it was also reported that an IRGC Deputy Commander said Haniyeh's revenge is inevitable and will be carried out in due course, according to Al Jazeera
- Iranian Defence Ministry candidate said Israel crossed red lines and we will strengthen deterrence, according to Al Arabiya.
OTHER
- Ukrainian President Zelenskiy said the Kyiv military is achieving its goals regarding the Kursk operation.
- Chinese Premier Li is to visit Russia from August 20th to August 22nd where he will meet with Russian and Belarussian counterparts and will hold in-depth exchanges on bilateral relations, according to Interfax.
ASIA-PAC
NOTABLE HEADLINES
- Singapore introduced new curbs on the public housing market, according to Bloomberg.
