MARKET WRAPS
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No major economic or corporate trading updates expected
Opening Call:
European stock futures were little changed early Monday. Asian stock benchmarks broadly fell; the dollar was flat; Treasury yields fell; oil futures fell; while gold rose.
Equities:
Stock futures point to a muted open for European markets at the start of the week. Focus is on Treasury Secretary Scott Bessent's press conference later Monday on the U.S.'s planned sanctions against Iran.
Further ahead this week, attention will turn to Nvidia earnings and a key speech from Federal Reserve Chairman Kevin Warsh. Nvidia will publish its hotly anticipated second-quarter earnings after the close on Wednesday.
Beyond the earnings story, however, lurks a potentially even more definitive event: Warsh's first keynote address at the Jackson Hole Economic Policy Symposium in Wyoming on Friday. Investors and economists will closely observe any remarks from Warsh, who has eschewed the idea of offering insight into the Fed's thinking on interest-rate changes--beyond a commitment to fight inflation aggressively.
Forex:
"Concerns about the sustainability of government debt can weigh on the USD this week," CBA said. "U.S. Treasury Secretary Bessent raised expectations of a budget consolidation program to be released this week."
"A modest consolidation would disappoint the hopes of market participants and weaken the USD," the bank added.
Bonds:
Long-term U.S. interest rates are on the rise, and are now about as high as they've been since prior to the global financial crisis around 2008. At the top of the list of reasons why is the Iran war, said Mark Zandi, chief economist at Moody's Analytics.
But the Fed is also a factor, he said. The apparent view of Fed Chairman Kevin Warsh that the central should be mum on forward guidance or even on its reaction function, is also contributing, Zandi said. Bond investors are demanding a higher yield to compensate for the uncertainty this creates, he added.
Energy:
Oil futures fell early Monday ahead of Bessent's press conference on U.S. sanctions.
"Oil is likely to be the primary channel through which tighter sanctions transmit to markets, with investors watching closely to see whether stronger enforcement curbs Iranian exports or complicates the logistics of oil shipments," said Tiger Brokers market strategist James Ooi.
Metals:
Gold has rebounded sharply from July lows, supported by renewed investment demand and growing unease over the U.S. fiscal outlook, ING said.
The prospect of larger Treasury buybacks has refocused attention on U.S. government borrowing and fiscal credibility, ING said. "It has also revived concerns about currency debasement, reinforcing gold's appeal as a store of value." Copper remains a key focus as shifts in global inventories occur, with a surge in deliveries into LME warehouses helping to ease the market's acute tightness, ANZ said. However, concerns about tariffs could lead to the U.S. drawing additional copper from international markets ahead of time, ANZ added. Iron ore rose in Asian trade, but the gains look increasingly difficult to sustain as the market moves from a production-capacity build-out into a period of supply release, Huatai Futures said.
The divergence between rising ore imports and weaker steel production has pushed inventories higher and underscores the increasingly loose supply-demand balance, they said.
TODAY'S TOP HEADLINES
Wall Street Is Counting on Nvidia to Keep the AI Party Going
Chip makers are fighting to assure investors that the artificial-intelligence boom is racing forward. Wall Street might not believe it until Nvidia's Jensen Huang says so.
When Huang steps up to the mic for his company's earnings call Wednesday, he will have the world's attention. What he says about Nvidia's present will preview the future of AI, dictate the path forward for a tech-crazed stock market and influence an American economy increasingly tethered to hopes that the boom won't go bust.
U.S., Canada Spiral Toward Trade War
TORONTO-After weeks of marathon talks between U.S. and Canadian trade officials, an agreement was almost in sight.
Late Tuesday, less than two hours before a slate of punishing new U.S. levies on Canadian goods were going to go into effect, President Trump announced a "DEAL" on social media and a three-day delay to give officials time to finalize the details.
Europe Chastised Trump's Climate Rollback. Now It's Delaying Its Own Green Goals.
When President Trump shredded U.S. climate policies last year, much of the Western world chastised him for ignoring climate change. Now, Europe, the U.K. and Canada are walking back their own environmental regulations.
The European Union has proposed to relax its landmark carbon-pricing system, and allow automakers to sell gasoline-burning cars for longer. The U.K. appears poised to allow new oil production in the North Sea-after banning exploratory drilling last year-and is reviewing targets for sales of electric vehicles. Canada dismantled an unpopular carbon tax and is backing new oil-and-gas infrastructure.
Iran's Top Politicians Urge an End to the War
DUBAI-Iran's top politicians said the country needs to focus on ending the war and shoring up its crippled economy, pushing back publicly against hardliners who are taking a more defiant approach in the six-month-old conflict.
The comments by Iranian President Masoud Pezeshkian and parliamentary speaker Mohammad Bagher Ghalibaf come as the diplomatic track remains stalled and the Trump administration has shifted to a policy of ratcheting up economic pressure via sanctions and the naval blockade of Iran's ports.
Nvidia Is Spending $6 Billion to Build a Powerful U.S. Alternative to Chinese AI
Nvidia is planning to use a $6 billion deal it struck this week to build one of the world's most powerful open-weight AI models, one that would compete with Chinese heavyweights like DeepSeek and Kimi K3, according to people familiar with the matter.
The chip giant's licensing deal with the AI startup Poolside is also set to present a direct challenge to frontier U.S. AI companies including OpenAI and Anthropic, since open-weight models are generally far cheaper to operate and allow easy customization.
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Expected Major Events for Monday 05:00/FIN: Jul PPI
06:00/DEN: 2Q Labour force survey
06:00/NOR: Jul Credit Indicator C2
06:00/NOR: 2Q Credit Indicator C3
07:00/CZE: Aug Business cycle survey (consumer/business confidence)
08:00/POL: Jul Retail Sales
09:00/MLT: Jul RPI
10:00/FRA: 2Q OECD Quarterly National Accounts: GDP growth
12:00/POL: Jul Broad money M3
17:59/UK: Jul Adzuna UK Job Market Report
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