US equity futures are down a touch, after closing in the red on Friday having tagged a new all time high earlier in the day, with small caps outperforming to start the week. As of 8:00am ET, S&P futures are down 0.1% and Nasdaq futures drop 0.2% after the benchmarks closed last week near an all-time high, with Ukraine's Zelenskiy and his European allies arriving at the White House today to find out what US President Donald Trump committed to at his summit with Vladimir Putin. Pre-mkt, Mag7 names are all lower with Semis and Cyclicals lagging Defensives. European stocks also fell 0.2%. Bond yields are lower as the curve bull flattens and the USD catches a bid. Commodities are higher with strength from crude and precious metals. Cryptocurrencies retreated. This is a light macro data week with a focus on Retailer earnings and geopolitics, though the latter is unlikely to move US markets, into Friday’s Powell presentation at Jackson Hole.

In premarket trading, Mag 7 stocks are mostly lower (Microsoft +0.07%, Alphabet +0.09%, Apple -0.2%, Meta Platforms -0.2%, Nvidia -0.3%, Amazon -0.2%, Tesla -0.6%). 

• Dayforce Inc. (DAY) jumps 26% after Bloomberg reported that Thoma Bravo is in talks to acquire the human resources management software provider.
• Soho House & Co. (SHCO) rises 16% after a group of investors agreed to take the company private in a deal that gives the members’ club an enterprise value of about $2.7 billion.
• TeraWulf (WULF) climbs 4% after saying said Google has agreed to boost its stake in the company to about 14% from around 8% as the Bitcoin miner and data center operator continues to expand its Lake Mariner data center campus in Western New York.
• Tonix Pharmaceuticals (TNXP) rises 6% after an announcement that the firm received FDA approval for Tonmya to treat fibromyalgia in adults.
• UnitedHealth Group Inc. (UNH) rises 2%, set to extend the 12% rally on Friday, after Warren Buffett’s Berkshire Hathaway Inc. and other investors bought shares in the health insurer.

Traders will be on edge today, following the latest developments in the White House where Ukrainian President Volodymyr Zelenskiy and his allies will meet with President Trump to find out what the US President committed to at his summit with Vladimir Putin. Bloomberg Economics chief geo-economics analyst Jennifer Welch says questions remain about what the US and Russian leaders discussed and how much progress was made toward ending the war. 

Besides today, traders are also staying cautious ahead of the Federal Reserve’s annual retreat at Jackson Hole later this week, with Chairman Jerome Powell’s speech keenly watched for guidance on a September interest-rate cut. Investor expectations for monetary easing next month fluctuated in recent days, pricing in more than a quarter-point cut at one point, amid mixed signals on inflation and the strength of US consumers.

Under a scenario where the Fed begins cutting later this year, combined with resilient corporate earnings, “the S&P 500 is likely to maintain its medium-term uptrend,” noted Linh Tran, market analyst at XS.com. “Nevertheless, caution is warranted in the face of unexpected political shocks, the risk of renewed trade tensions, and historically stretched valuations.” As a reminder, BofA's Michael Hartnett sees a dovish Jackson Hole as a sell-the-news event.

Elsewhere, Wall Street will also get a closer look at how American consumers are holding up in the early days of Trump’s tariff regime. Some of the biggest retailers report earnings in coming days, including Walmart, Target and Home Depot.  So far, S&P 500 firms have posted a much better-than-expected increase in quarterly profits, while margins have proved more resilient to tariffs than feared, according to Goldman's David Kostin.

In Europe, the Stoxx 600 is little changed with gains in utility and health care shares offset by losses for banks and miners. Vestas Wind Systems jumps the most in three years as new US tax credit rules were better than feared, while Novo Nordisk gained after its obesity drug Wegovy won US FDA approval to treat a liver disease. Here are the biggest movers Monday:

• Vestas Wind Systems shares rose 17%, the most in three years, after guidance issued by the Treasury Department and IRS on tax credits related to clean energy projects was deemed by analysts to be far less onerous than feared
• Novo Nordisk shares gain as much as 5% after the Danish drugmaker’s Wegovy obesity drug won US FDA accelerated approval to treat a serious form of liver disease, beating rival Eli Lilly to the US market for the condition
• Boozt gains as much as 11%, more than offsetting Friday’s 5.3% earnings-triggered losses, after SEB raised its recommendation on the Swedish online retail group to buy from hold, saying the “worst may now be behind” it
• Dr Martens shares gain as much as 11%, the most in two months, after Peel Hunt raised the recommendation to buy from add, saying shares have not yet factored in the company’s growth potential
• Valneva gains as much as 13% and reaches its highest level since 2023 after the French company said Canada has granted marketing authorization for the firm’s chikungunya vaccine IXCHIQ in individuals aged 12 years and older
• Pantheon Resources shares rise as much as 17%, the most since January, after the oil and gas explorer reported that it has found hydrocarbons at the Dubhe-1 appraisal well
• Echo Investment gained as much as 5.6%, hitting an eight-year high, after the Polish real estate developer sold a portfolio of residential properties to TAG Immobilien for €565 million
• Commerzbank falls as much as 4.5% after Deutsche Bank cut its recommendation on the German lender to hold from buy, with analysts saying its valuation looks “stretched” after shares rallied 200% over the past year
• Cranswick shares fall after a newspaper report alleging animal cruelty at one of the meat supplier’s sites in eastern England; the company says in a statement on its website it was “horrified” to see “unaccaptable historic footage”

In the UK, money markets trimmed bets that the Bank of England will cut rates this year, as signs of faster inflation and a more resilient economy reduce the case for more easing. Swaps are implying a less-than-50% chance of a quarter-point cut by December. A reduction was fully priced earlier this month.

Earlier in the session, Asian stocks advanced, led by gains in India on government plans to cut consumption taxes, and in China on optimism over easing trade tensions with the US. The MSCI Asia Pacific Index rose 0.1%, with Recruit Holdings and Toyota among the key drivers. A gauge of Shanghai-listed stocks closed at its highest level in a decade, as local investors continued to pour in cash. Stocks also advanced in Australia, Taiwan, and Japan. In contrast, shares fell in South Korea, weighed by a selloff in chipmakers Samsung Electronics and SK Hynix. Donald Trump said he will hold off on raising tariffs on Chinese goods over the country’s purchases of Russian oil following his weekend meeting with Vladimir Putin. Buzz is building over mainland Chinese shares, which have underperformed Hong Kong stocks this year amid concerns over trade and the health of the economy. Shares in India jumped after Narendra Modi’s Independence Day speech, which included plans to cut the consumption tax for the first time since it was introduced nearly a decade ago. Consumer electronics and auto makers led gains.

In FX, the Bloomberg Dollar Spot Index rises 0.1%. The kiwi is the best-performing G-10 currency, rising 0.3% against the greenback.

In rates, treasuries slightly richer across the curve, following similar gains across European bonds as investors weigh potential impact of Monday’s political talks on the Russia-Ukraine war, ahead of Jackson Hole later in the week.  Treasuries’ Monday gains were concentrated at the longer end of the curve, diverging from August’s steepening. The two-year yield slipped one basis point to 3.74%, while the 10-year yield fell three basis points to 4.29%. Money markets are pricing in around an 80% likelihood of a quarter-point cut next month and at least one more by the end of the year. Treasury yields richer by 1bp to 2bp across the curve with 2s10s spread flatter by around 1.2bp as 10-year outperforms. In Europe, 30-year German yields drop around 3.5bp with the German 2s10s spread tighter by almost 3bp on the day in a wider bull flattening move. The long-end of the German curve outperforms, partially retracing Friday’s move to the highest yields since 2011. Duration events this week also include 20-year bond sale Wednesday and long-end TIPS auction Thursday.

"Close focus for many falls on moves in bond markets, and notably on the slope of the yield curves,” wrote Chris Weston, head of research at Pepperstone Group in Melbourne. “Powell’s guidance at Jackson Hole will therefore be important in showing how he balances the focus on inflation versus growth and labor markets.”

In commodities, Brent crude futures rise 0.6% to near $66.20 a barrel ahead of a meeting between US President Trump and Ukrainian President Zelenskiy. European natural gas futures are also up more than 1%. Spot gold rises about $13. Bitcoin falls more than 2% amid a retreat in major cryptocurrencies which pushed the market’s total capitalization under $4 billion after it scaled record peaks last week. Bitcoin trades just under $115k; Ethereum sinks below USD 4.3k, and underperforms vs peers, even as news hits that both Strategy at Bitminer were busy adding to their BTC/ETH treasuries, respectively.

Today's economic data slate includes New York services business activity (8:30am) and NAHB housing market index (10am). Fed speaker slate includes Bowman at 12:45pm, speaking on Bloomberg TV. On Friday at 10am Chair Powell speaks at the 2025 Jackson Hole Economic Policy Symposium on the subject of economic outlook and framework review

Market Snapshot

• S&P 500 mini -0.2%
• Nasdaq 100 mini -0.2%
• Russell 2000 mini little changed
• Stoxx Europe 600 little changed
• DAX -0.3%, CAC 40 -0.6%
• 10-year Treasury yield -3 basis points at 4.29%
• VIX +0.7 points at 15.82
• Bloomberg Dollar Index little changed at 120.49
• euro -0.2% at $1.1684
• WTI crude +0.8% at $63.28/barrel

Top Overnight News

• Volodymyr Zelenskiy and his European allies will meet Donald Trump in Washington today. The US is expected to focus on territorial concessions demanded by Russia, while Ukraine will seek details of Trump’s offer of possible US security guarantees, according to a person familiar. BBG
• Trump posted "President Zelenskyy of Ukraine can end the war with Russia almost immediately, if he wants to, or he can continue to fight. Remember how it started. No getting back Obama given Crimea (12 years ago, without a shot being fired!), and NO GOING INTO NATO BY UKRAINE. Some things never change!!!"
• White House trade adviser Peter Navarro slammed India’s Russian oil purchases as “opportunistic and deeply corrosive” in an FT op-ed. FT
• OpenAI CEO Sam Altman has reportedly said that he believes AI could be in a bubble, comparing market conditions to those of the dotcom boom in the 1990s. “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes,” he’s quoted as saying. CNBC
• China’s capital outflows hit a record $58.3 billion in July, driven by purchases of Hong Kong assets by mainland investors. BBG
• China’s exports of rare earth products — including magnets — extended their recovery in July, months after Beijing threatened a disruptive global shortage by crimping supplies to fight a trade clash with Trump. Shipments jumped last month to reach their highest since January. BBG
• The PBOC is signaling it may delay broad easing measures such as interest rate or RRR cuts until later this year. BBG
• India's government will slash the consumption tax it charges consumers and businesses by October, a top official said on Friday, hours after Prime Minister Narendra Modi announced sweeping tax reforms to boost the economy in the face of a trade conflict with Washington. RTRS
• An Air Canada union defied a government order to return to work, forcing the airline to delay plans to restart operations over the weekend. The carrier now expects to resume flights at 4 p.m. Toronto time today. BBG
• Thoma Bravo is in discussions to buy Dayforce, people familiar said. It has an enterprise value of more than $9 billion. BBG
• Fed’s Daly (2027 voter) said a couple of cuts are warranted this year and maybe a few more, while she added that they have to be ahead in order to not be behind and that Fed officials have to balance inflation and labour mandates. Daly also stated that the economy has slowed but is not slow, and there is still room to recalibrate the policy rate.

Russia-Ukraine: US Headlines

• Trump said they made great progress in the meeting with Russian President Putin which he said was "a 10" and there are just a few points left to agree upon and a few things left to resolve, but added there is no deal until there is a deal and there are one or two significant items left to agree on and it is ultimately up to NATO and Ukraine to agree. Trump said they negotiated on NATO, security and land, while he also stated that he could meet Putin again soon and could see a Moscow meeting possibly happening, as well as noted that Putin wants to see an end to the killing like he does.
• Trump commented on Truth Social that it was a great and very successful day in Alaska and that the meeting with Russian President Putin went very well, as did a late-night phone call with Ukrainian President Zelensky and various European leaders. Trump added it was determined by all that the best way to end the Russia-Ukraine war is to go directly to a peace agreement and not a mere ceasefire agreement which often does not hold. Furthermore, he said Zelensky will visit the Oval Office on Monday afternoon, and if all works out, they will then schedule a meeting with Putin.
• Trump posted "President Zelenskyy of Ukraine can end the war with Russia almost immediately, if he wants to, or he can continue to fight. Remember how it started. No getting back Obama given Crimea (12 years ago, without a shot being fired!), and NO GOING INTO NATO BY UKRAINE. Some things never change!!!"
• US Special Envoy Witkoff said US President Trump and Russian President Putin agreed at their summit that the US would be able to offer security guarantees to Ukraine.
• US Secretary of State Rubio said both Ukraine and Russia will have to make concessions to get a peace deal and there were things discussed in the Trump-Putin meeting that have potential for breakthroughs to end the war. Rubio suggested that to end the war, there are things Russia and Ukraine want but cannot get and it may not be possible for the US to create a scenario to end the war in Ukraine. Furthermore, he said security guarantees will be discussed in Monday’s meeting with Ukrainian President Zelensky and others, while Rubio added that he is not saying they are on the verge of a Russia-Ukraine peace deal, but they saw enough movement to justify a follow-up meeting with Zelensky.
• Trump said in a pre-recorded interview with Fox that if they have to do sanctions, they will do it and the next meeting will have both Ukrainian President Zelensky and Russian President Putin.

Russia-Ukraine: Ukraine Headlines

• Ukrainian President Zelensky said Ukraine is ready for constructive cooperation and will travel to Washington D.C. on Monday, while he added that Ukraine reaffirms its readiness to work with maximum effort to achieve peace and the call with US President Trump and Europeans discussed positive signals and lasted for more than 90 minutes. Furthermore, he said Ukraine supports President Trump’s proposal for a trilateral meeting between Ukraine, the US and Russia. It was separately reported that Zelensky said he emphasised to Trump that pressure on Russia should be stepped up and noted that security must be guaranteed reliably and in the long term.
• Ukrainian President Zelensky announced he arrived in the US and is grateful to President Trump for the invitation, while he added that they all equally want to end this war swiftly and securely, as well as hopes their shared strength with America and European friends will compel Russia to real peace.
• Ukrainian President Zelensky said Ukrainian forces saw a success for a second day in a row repelling a Russian assault near Dobropillya and Russia might step up frontline attacks in the coming days. It was separately reported that Ukraine’s military said its forces advanced up to two kilometres on the Sumy front.

Russia-Ukraine: Russia Headlines

• Russian President Putin said he is sincerely interested in ending the conflict, but all ‘root causes’ must be eliminated and all Russia’s concerns must be taken into account. Putin said negotiations were productive and useful. Putin said the personal meeting has been overdue and was necessary to rectify the situation, while he hopes that a mutual understanding will bring peace to Ukraine and he agrees with US President Trump on the need for Ukraine’s security. Furthermore, he said the agreements should be a starting point and that a Russia-US Investment partnership has huge potential. It was also reported that Putin told Trump that if Ukraine fully withdraws from eastern Donetsk and Luhansk regions, Russia would freeze the front line in the southern regions of Kherson and Zaporizhzhia. It was also reported that the Kremlin said a trilateral summit with Ukraine was not discussed yet and there is no date set for another Trump-Putin meeting.
• Senior Russian diplomat said Russia agrees any future peace agreement on Ukraine must provide security guarantees to Kyiv, but Moscow also needs guarantees, while the official said the West has not been thinking about security guarantees for Russia, and this needs to be corrected with Moscow ready to assist.
• Russia said its air defence systems intercepted and destroyed 300 Ukrainian drones, while it announced it hit a storage site for Ukrainian Sapsan operational-tactical missiles, according to IFAX. It was also reported that Russia’s FSB security service said it prevented a Ukrainian drone attack on the Smolensky nuclear power plant.

Russia-Ukraine: European Headlines

• European leaders have been invited to join US President Trump’s meeting with Ukrainian President Zelensky at the White House on Monday and it was reported that UK PM Starmer, German Chancellor Merz, French President Macron, Italian PM Meloni, Finland’s President Stubb, European Commission President von der Leyen and NATO Secretary General Rutte will join the Trump-Zelensky meeting on Monday.
• European leaders issued a joint statement on the Trump-Putin summit in which they stated that they welcome US President Trump’s efforts and support for providing security guarantees, while they added that Russia cannot have a veto on Ukraine’s pathway to the EU and NATO.
• EU Council President Costa said transatlantic unity is paramount at this moment to achieve a lasting peace in Ukraine and if no ceasefire is agreed, the EU and the US must increase pressure on Russia, while he added that Ukraine’s sovereign right to determine its conditions for peace must be respected.
• EU Commission spokesperson said Ukraine’s allies held a positive exchange ahead of Monday’s meeting with US President Trump and the video conference focused on key matters such as the need to stop the killing in Ukraine and the commitment to maintain full pressure on Russia via sanctions.
• German Chancellor Merz said the US is ready to take part in security guarantees for Ukraine, while he added they would have liked there to have been an agreement on a ceasefire and stated there are no territorial negotiations on Ukraine that are going over the heads of the Europeans. It was separately reported that Germany’s Foreign Minister said any Ukraine peace agreement requires security guarantees for Ukraine, and that Europe is ready to provide them together with the US.
• French President Macron said the situation ahead of talks in Washington is extremely serious for Ukraine and Europe, while he added they want Ukraine’s territorial integrity to be respected and want a strong and lasting peace for Ukraine. Macron said their goal for talks on Monday is to present a united front between Ukraine and its European allies, as well as warned that if they show weakness today in front of Russia, they are laying the ground for future conflicts. Furthermore, Macron said he thinks the answer is no to the question of whether he thinks Russian President Putin wants peace.
• Statement from the Nordic Baltic eight leaders noted that they will continue to arm Ukraine and enhance Europe’s defences to deter further Russian aggression, while they will continue to strengthen sanctions and wider economic measures to put pressure on Russia’s war economy.

Trade/Tariffs

• US President Trump said he will hold off on raising tariffs on Chinese goods over the country's purchases of Russian oil.
• US government officially posted the Section 232 tariff codes for steel and aluminium products on Friday, in which the BIS is adding 407 Harmonized Tariff Schedule of the United States (HTSUS) codes to the list of products that will be considered as steel or aluminium derivative products.
• White House Trade Advisor Navarro wrote in the FT that India's oil lobby is funding Russia's war machine which has to stop, while he added that if India wants to be treated as a strategic partner of the US, it needs to start acting like one.
• US negotiators’ August 25th visit to New Delhi for trade talks was called off and the current round of negotiations for a proposed US-India bilateral trade deal is now likely to be deferred to another date, according to NDTV Profit.
• EU push to prevent the US from targeting the bloc’s landmark digital rules is reportedly holding up a trade statement with the US, according to FT.
• German government spokesperson states that the US's role in potential Ukraine security guarantees will be discussed in Washington today. Chancellor Merz is among the attendees at tonight's Washington meeting.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks began the week mostly higher following the recent Trump-Putin summit which was said to have made great progress, although some of the gains were capped as the attention turned to President Trump's meeting with Ukrainian President Zelensky and various European leaders later today. Focus this week will also be on Fed Chair Powell's speech on Friday at the Jackson Hole Symposium. ASX 200 was ultimately little changed following a choppy performance and after having pulled back from an early fresh record high, with earnings releases remaining in the spotlight including the latest results from big four bank NAB. Nikkei 225 resumed its rally to fresh record highs with little fresh drivers to derail the current momentum for Tokyo stocks. Hang Seng and Shanghai Comp conformed to the mostly constructive mood in the region with sentiment also helped after President Trump said he will hold off on raising tariffs on Chinese goods over the country's purchases of Russian oil, while the PBoC Q2 Monetary Policy Implementation Report on Friday noted that China’s economic operation still faces many risks and challenges, but made numerous pledges including to further improve the monetary policy framework, implement and refine moderately loose monetary policy.

Top Asian News

• Chinese authorities have increased calls on investors to pay taxes on their global gains, forcing wealthy individuals to reassess their trading strategies as Beijing tries to boost its funds to counter economic pressures, according to FT.
• India's federal government proposes reducing the GST rate on small cars to 18% from 28% and proposes lowering GST rate on health and life insurance premiums to a maximum of 5% from the current 18%, according to a source cited by Reuters.
• China's Commerce Ministry is to extend the investigation into EU dairy products to 21st February 2026.

European bourses (STOXX 600 -0.1%) opened modestly lower across the board, and the risk tone continued to deteriorate as the morning progressed, with all major indices falling into negative territory; currently at lows. European sectors are split down the middle, in quiet trade. Utilities takes the top spot, joined closely by Real Estate and Health Care; the latter has been buoyed by upside in heavy-weight Novo Nordisk (+5.2%). The Co. benefits after receiving accelerated US FDA approval for liver disease MASH. Elsewhere, Vestas Wind Systems (+16%) gains after the US provided new guidance on renewable tax credits, essentially clarifying that projects can qualify under the One Big Beautiful Bill’s safe-harbor provision if they show physical work and not just early spending, to then access the Inflation Reduction Act credit.

• UK government discounts for electric vans and trucks have been extended with plug-in van and truck grants extended to at least 2027.
• Universities & Colleges Employers Association warned that UK ministers risk exacerbating staff job cuts at post-1992 universities in England and Wales unless they allow institutions more flexibility with their pension offerings, according to FT.
• ECB's Holzmann called for more transparency on the ECB's policy decisions in a last suggestion before departing the central bank this month.
• Moody’s affirmed Ireland at Aa3; Outlook Positive.

FX

• DXY initially traded rangebound after last Friday's mixed data releases and with little fresh catalysts aside from the geopolitical headlines, while participants also look ahead to Fed Chair Powell's speech at the Jackson Hole Symposium on Friday. However, EUR-led weakness led to saw some modest upside in the Dollar index, to make a fresh peak at 98.06 (more below). Do note that there were comments from Fed's Daly over the weekend, who said a couple of cuts are warranted this year and maybe a few more, while she noted that they have to be ahead to not be behind. DXY resides in a 97.78-98.06 range, vs Friday's 97.72-98.21 parameter. DXY today sees its 50 DMA at 98.08.
• EUR takes a breather from recent advances and trades on either side of 1.1700 with various European leaders set to visit the White House on Monday for talks with Trump and Zelensky. On this front, "European leaders have 3 main goals in DC today: 1) pin down more details on possible US security guarantees; 2) work on preparations for the possible trilateral Putin, Zelensky & Trump meeting, and 3) push back forcefully on the idea of “land swaps", via Eurasia. EUR/USD resides in a current 1.1672-1.1716 range with the 50 DMA at 1.1637.
• USD/JPY gradually edged higher north of the 147.00 level overnight with the Japanese currency marginally pressured amid the outperformance in Japanese stocks. USD/JPY trades in a current 147.06-147.58 range, well within Friday's 146.74-147.89 range, with the 50 DMA at 146.54 and the 200 DMA at 149.25.
• GBP continues to struggle for direction amid quiet pertinent newsflow and with very little scheduled for the UK at the start of the week before Wednesday's inflation data. GBP/USD trades in a 1.3532-1.3565 range.
• Antipodeans remain afloat despite the firmer dollar and downward tilt in risk sentiment, and losses across most base metals, with traders also eyeing the widely expected rate cut at the RBNZ meeting scheduled mid-week. There is nothing obvious to explain the resilience in the non-US dollars.
• PBoC set USD/CNY mid-point at 7.1322 vs exp. 7.1793 (Prev. 7.1371).

Fixed Income

• A morning of modest gains for the complex. Driven higher by the apprehensive risk tone after the fallout of the Alaska summit. In brief, no ceasefire was agreed upon, but we did see Russian President Putin say that they would be willing to freeze the southern front lines in exchange for Ukraine withdrawing from certain regions. USTs are firmer by a handful of ticks so far, at a 111-26+ peak. If the move continues, then we look to the 111-30+ peak from last Friday before the figure and then last week’s peak at 112-14.
• Bunds are firmer, in-fitting with USTs. Reacting to the risk tone and more so than USTs at this moment in time, perhaps as the geopolitical equation directly adds in European leaders today. As it stands, Bunds have notched a 129.18 peak with upside of almost 40 ticks at most. While relatively pronounced, we remain some way shy of 129.62 from last Friday and then the 130.06 peak from last week.
• Gilts again, echoes of the above, but caught between USTs and Bunds in terms of magnitude. The UK is also exposed to the evening’s meetings as PM Starmer is in attendance. Into the meeting, Gilts have eased ever so slightly from a 91.32 peak where they notched gains of just over 20 ticks. As is the case with peers, this has stalled before Friday’s 91.68 peak before the figure and then last week’s 92.37 best.

Commodities

• Oil was little changed with demand constrained following the Trump-Putin meeting in Alaska, which President Trump said had made great progress, while he is to meet with Ukrainian President Zelensky and European leaders at the White House today. More recently, oil prices have caught a slight bid, and currently reside at the top-end of recent ranges. Nothing really behind the latest bout of upside, but potentially as traders digest the weekend's Russia/Ukraine developments. WTI currently resides in a USD 61.65-62.52/bbl range while Brent sits in a USD 65.47-66.31/bbl range.
• Two-way trade across precious metals and gained after rebounding from an initial dip, with few catalysts outside of geopolitics. Price action this morning sees the precious metals complex eking mild gains, with spot gold trading on either side of its 50 DMA (3,349.60/oz) in a USD 3,323.68-3,358.49/oz range.
• Copper eked out marginal gains overnight amid the mostly positive risk appetite in the Asia-Pacific region. However, dollar strength and a worsening of sentiment in the European morning prompted the base metals complex to trade mostly in negative territory. 3M LME copper prices reside in a USD 9,727.55-9,770.30/t range.
• Indian Oil Corp Exec says processed 24% Russian oil in June quarter (prev. 14% in March quarter)
• UBS reiterates its end-2025 and March 2026 Brent crude oil view to USD 62/bbl, on higher supply front South America and resilient output from sanctioned countries.
• Iran's Foreign Ministry spokesperson says Tehran will continue talks with the IAEA.
• Exxon Mobil (XOM) reports a heavy rain event caused the release at 236k bpd, Joliet Illinois Refinery.
• Hungarian Foreign Minister says Russian oil flows to Hungary are halted after the Ukrainian attack on pipeline transformer station.
• NHC says Category 4 Hurricane Erin located just east of the Southeast Bahamas; Life-threatening surf and rip currents likely across the US Eastern Seaboard this week.
• Ukraine's foreign minister states that Hungary has made efforts to sustain its dependence on Russian oil.

Geopolitics

• Israel’s navy carried out an attack against a power station south of the Yemeni capital Sanaa on Sunday.
• Israel’s military began providing tents and shelter equipment for Gazans in preparation for relocating residents from combat zones to southern Gaza.
• Hamas said the entry of tents by Israel into the southern Gaza Strip under ‘humanitarian arrangements’ is blatant deception and the new Israeli relocation plan is a new wave of genocide and displacement.
• Israel PM Netanyahu has "recently intensified his meetings with close associates in preparation for the possibility of early elections", via Al Jazeera citing sources.
• "Hamas has received a new offer from the mediators for a ceasefire agreement in Gaza and is expected to respond to it today", according to Israeli journalist citing Qatar's Al-Arabi TV.
• "A diplomatic source involved in the negotiations between Egypt and Qatar and Hamas told me that in light of the fact that there was not enough progress in yesterday's talks in Cairo", according to Axios' Ravid.
• US President Trump said he believes that Chinese President Xi will not act on Taiwan, while it was separately reported that Trump said Chinese President Xi told him that he would never invade Taiwan while Trump is President, while he also said that he and China are very patient, according to a Fox News interview.
• Chinese Foreign Ministry on US President Trump's comments on China, says will not allow anyone or any force to separate Taiwan from China in any way.

US Event Calendar

• 10:00 am: Aug NAHB Housing Market Index, est. 34, prior 33

Central Banks (All Times ET):

• 12:45 pm: Fed’s Bowman Speaks on BTV

DB's Jim Reid concludes the overnight wrap

As we arrive at a new week, the focus is still on Ukraine this morning, as the world reacts to the Trump-Putin summit in Alaska last Friday. The main headline was that no deal was reached on a ceasefire, but multiple outlets reported that Putin wanted Ukraine to withdraw from the Donetsk and Luhansk regions, and he offered Trump a freeze across the rest of the frontline in return. Moreover, Trump himself posted that he now wanted to “go directly to a Peace Agreement, which would end the war, and not a mere Ceasefire Agreement, which often times do not hold up.” 

After the summit, Trump then spoke with European leaders, although the joint statement from the European leaders made clear that “It will be up to Ukraine to make decisions on its territory.” Then today, Trump is meeting President Zelensky at 13:15 ET, before a multilateral leading with European leaders at 15:00 ET. That group will include UK PM Starmer, French President Macron, German Chancellor Merz and Commission President Von der Leyen. In his post, Trump also said that “If all works out, we will then schedule a meeting with President Putin.”

Clearly, we’ll have to wait and see what happens today, but Trump was saying yesterday morning that there had been “BIG PROGRESS ON RUSSIA. STAY TUNED!” And separately, Trump’s envoy Steve Witkoff said on CNN that “We got to an agreement that the US and other nations could effectively offer Article 5-like language to Ukraine”, which is the NATO article which says that an attack on one member will be considered an attack on all. Trump has also been calling on Zelensky to make a deal, and just a few hours ago, he posted that Zelensky “can end the war with Russia almost immediately, if he wants to, or he can continue to fight.” However, US Secretary of State Marco Rubio downplayed expectations of a deal yesterday, saying that “We are not at the precipice of a peace agreement.” 

Aside from the geopolitical situation, markets find themselves in an interesting position as we begin the week. On the one hand, there’s been incredible buoyancy across risk assets that’s seen valuations become increasingly stretched. Indeed, the S&P 500 hit another record last Thursday, whilst US IG credit spreads ended last week at their tightest level since 1998. But at the same time, futures are pricing in over 100bps of Fed rate cuts over the next 12 months, even with inflation widely expected to pick up given the tariffs. So that’s contributed to a significant curve steepening, with the US 5s30s curve ending last week at its steepest since 2021. And long-end yields have continued to creep higher more broadly, with the German 30yr yield reaching its highest since 2011 on Friday, at 3.35%. So those fiscal concerns from earlier in the year haven’t gone away either. 

Overnight in Asia, that risk-on move has continued for the most part. For instance, Japan’s Nikkei (+0.77%) is currently on track for a record high, the Shanghai Comp (+1.18%) is on course for its highest close since 2015, whilst the CSI 300 (+1.50%) is on track for its highest close since July 2022. South Korea is the exception, as the KOSPI is down -1.16% this morning amidst losses among chipmakers. But futures in the US and Europe are pointing towards modest gains too, with those on the S&P 500 (+0.11%) and the DAX (+0.16%) both up this morning. 

In terms of the week ahead, the main focus away from the White House will be the Fed’s symposium at Jackson Hole, where we’ll hear central bankers including Fed Chair Powell and ECB President Lagarde. Bear in mind that the Fed Chair’s speech at Jackson Hole has often been used to send important policy signals, and it was last year that Powell said the “time has come for policy to adjust” before they then cut rates at the next meeting for the first time since the pandemic. This time around, we don’t have the full agenda yet, but the subtitle for Powell’s speech on the Fed’s website says “Economic Outlook and Framework Review”, so we can expect some insight on those topics. 

The last time the Fed had a review in 2020, that resulted in a shift towards average inflation targeting. In essence, they said that after periods when inflation had been persistently beneath 2% (like the 2010s), then monetary policy could seek to reach inflation a bit above 2% to counteract that. The Fed also reinterpreted their approach to full employment, in that a tight labour market alone wasn’t a reason to raise rates. So that implied a move away from the pre-emptive approach whereby the Fed would tighten policy to get ahead of future inflation as the labour market tightened. Of course, we now know that shortly after the framework review, there was then a major burst of inflation, and although it had many drivers, our US economists concluded in a Friday note (link here) that the new framework was a contributor to that overshoot. So this time around, they expect Powell’s speech to call for rolling back the 2020 modifications and restoring a primary role for pre-emption. 

When it comes to the near-term path for policy, futures are still pricing in a September rate cut as the most likely outcome. But there was a clear shift last Thursday, as the PPI inflation release for July showed the fastest monthly inflation since March 2022. So that made it clear that a September cut still wasn’t a done deal, particularly with the emerging signs of tariff-driven inflation. And we still know there’s more to come on the tariff front, as Trump said on Friday that he'd be “setting tariffs next week and the week after, on steel and on, I would, say chips — chips and semiconductors, we’ll be setting sometime next week, week after”. So that’s one to keep an eye on, and Trump also suggested that the semiconductor rate could be as high as 300%. 

Staying on inflation, we’ve got some more releases out this week, including from Japan, the UK and Canada. The UK will be an important one, as the June reading was unexpectedly strong, with headline inflation rising to +3.6%. Moreover, our UK economist expects it to take another step up in July to +3.8%. By contrast in Japan, our economist sees headline inflation easing a bit to +3.1% in July, down from 3.3% in June. Otherwise, the main data release will be the August flash PMIs on Thursday, which will offer an initial indication on the global economy’s performance this month, particularly with the latest tariffs that have been imposed. 

Elsewhere this week, we’ve got a few more earnings releases coming out, although it’s very much the end of the current season with over 90% of the S&P 500 having reported by now. This week’s highlights include several US retailers, including Walmart and Target, which should offer a fresh insight into consumer spending. Last Friday, the US retail sales numbers were pretty robust in July, with the headline reading up +0.5% (vs. +0.6% expected), alongside an upward revision to June as well. However, the University of Michigan’s consumer sentiment index painted a weaker picture for August, with the headline index unexpectedly falling to 58.6 (vs. 62.0 expected), alongside an uptick for inflation expectations.

Recapping last week now, equities continued to push higher, and the S&P 500 moved up +0.94% for the week. The biggest gains happened on Tuesday after the US CPI report, as it was broadly in line with expectations, and kept the prospect of Fed rate cuts on the table for the months ahead. So that supported a broad-based advance, with the equal-weighted S&P 500 up by an even bigger +1.47%. Moreover, there was a global risk-on move that saw Europe’s STOXX 600 rise +1.18% last week, with outperformances from Italy’s FTSE MIB (+2.47%) and France’s CAC 40 (+2.33%). And in Japan, the Nikkei (+3.73%) closed at a record high as the country’s Q2 growth surprised on the upside. 

Meanwhile on the rates side, there was a decent steepening in yield curves last week, with the 2yr Treasury yield down -1.2bps to 3.75%, whilst the 10yr yield rose +3.3bps to 4.32%, and the 30yr yield was up +6.9bps to 4.92%. That came amidst shifts in Fed pricing over the course of the week, with a more dovish path initially after the CPI report and suggestions from Treasury Secretary Bessent for lower rates, before that was pared back after the PPI reading and the higher inflation expectations in the University of Michigan’s survey. So, the amount of cuts priced in by the December meeting ultimately fell from 57bps to 54bps over the week. Meanwhile in Europe, government bonds also struggled, with 10yr bund yields up +9.9bps to 2.79%, whilst the 30yr German yield (+14.3bps) posted its biggest weekly jump since March, reaching a post-2011 high of 3.35%.