Newsquawk Daily European Opening News - 25th August 2026

US Treasury sanctioned nearly 60 Iran-linked entities, people and vessels across nuclear, missile, cyber and oil networks. US President Trump is making calls to world leaders to cut economic ties with Iran and that the US expects actions from other nations and, if others do not act, the Treasury will unilaterally act. US Treasury Secretary Bessent said there will be a wave of sanctions after this, with a major financial institution expected to be sanctioned by the end of the week. Iran’s Economy Minister said the country is fully prepared for the US sanctions and that they cannot cut off Iran’s financial arteries. US is said to eye 7.5% China overcapacity tariffs before the Trump-Xi talks, according to multiple reports. APAC stocks were mixed following the subdued lead from Wall Street; European equity futures indicate a marginally positive cash market open. Looking ahead, highlights include German GDP Final (Q2), Ifo Expectations (Aug), US ADP Employment Change Weekly, House Price Index (Jun), US Richmond Fed Manufacturing Index (Aug). Riksbank Minutes (Aug), Fed Discount Rate Minutes (Aug)., Supply from UK, Germany and US. Earnings from Intuit. SNAPSHOT STOCKS Nikkei 225 +0.5% ASX 200 +0.7% Hang Seng -0.2% Shanghai Comp +0.2% Euro Stoxx 50 Sep'26 +0.3% DAX Sep'26 +0.2% ES Sep'26 +0.1% NQ Sep'26 +0.4% FX DXY +0.1% (99.07) EUR/USD -0.1% (1.1654) USD/JPY +0.2% (159.31) GBP/USD U/C (1.3626) BONDS US T-Note Sep'26 -2 ticks Bund Sep'26 U/C US 10yr Yield 4.71% German 10yr Yield 3.25% ENERGY & METALS WTI Oct'26 -0.1% Brent Nov'26 -0.1% Spot Gold -0.2% LME Copper -0.4% CRYPTO Bitcoin +2.0% Ethereum +1.0% As of 06:20BST/01:20EDT LOOKING AHEAD Highlights include German GDP Final (Q2), Ifo Expectations (Aug), US ADP Employment Change Weekly, House Price Index (Jun), US Richmond Fed Manufacturing Index (Aug). Riksbank Minutes (Aug), Fed Discount Rate Minutes (Aug)., Supply from UK, Germany and US. Earnings from Intuit. Click for the Newsquawk Week Ahead. IRAN CONFLICT US President Trump said in a tele-rally that they are beating Iran very badly and reiterated that Iran cannot have a nuclear weapon, while he added that gasoline prices are going to go down. US President Trump was said to have held a telephone conversation with Pakistani Army Chief Field Marshal Asim Munir last week, while Trump discussed the Iran issue and asked Munir to use Pakistan's influence to resume negotiations, according to an informed source cited by Al Jazeera. US Treasury sanctioned nearly 60 Iran-linked entities, people and vessels across nuclear, missile, cyber and oil networks. Measures target five sectors for potential secondary sanctions, including digital assets, technology, gold, aviation and shipping, with sanctions targeting a network of broker companies and shadow-fleet vessels across the UAE, Hong Kong, China, Singapore, Switzerland and Europe. US Treasury Secretary Bessent said they are launching Operation Economic Outcast and are going to end the Iran threat, while he stated that Iran has two paths: normalcy or total isolation. Bessent noted that the actions of the Treasury and other agencies will tighten the noose and block every potential source of revenue that funds the IRGC and the Iranian regime, with the US enforcing a zero-leakage approach. Furthermore, he said President Trump is making calls to world leaders to cut economic ties with Iran and that the US expects actions from other nations and, if others do not act, the Treasury will unilaterally act, while countries will have a finite timeline to shut down activities identified by the US Treasury, including closing Iran's bank branches abroad, with the US to end dollar access to those laundering Iran money. US Treasury Secretary Bessent said trying to buy Iran's appeasement will no longer work, and there will be a wave of sanctions after this, with a major financial institution expected to be sanctioned by the end of the week. US War Secretary Hegseth said not ruling out the use of military force in the Strait of Hormuz or anywhere else. US Secretary of State Rubio spoke with the German Foreign Minister about their shared commitment to freedom of navigation in the Strait of Hormuz. Iranian President Pezeshkian said the US must change its tone and approach towards Iran, while he stated US reliance on coercion and bullying will only complicate executive processes Iran's Supreme National Security Council Secretary Rezaei said during the meeting with Pakistan's Chief of Defence Forces Munir that the US must change its behaviour and take practical actions regarding implementation of the terms of the MOU, while Munir said Pakistan has made many efforts to establish security between the borders of the two countries. Pakistan's Interior Minister, who accompanied the Chief of Defence Forces on his trip to Tehran, wrote that Iran's President clearly expressed his government's view and we had a constructive exchange of views on the issues raised, while he noted big progress after talks with Iran's leadership. Iran’s Economy Minister said the country is fully prepared for the US sanctions and that they cannot cut off Iran’s financial arteries, while he also stated that their enemies intend to launch an economic terrorist attack, but they also have their own tools and know how to play the game. Iran’s Parliamentary Speaker Ghalibaf said the Americans know that no one will believe their nonsense and that the US is not in a position economically to restrict its relations with other countries any further, while he added that Iran's trading partners have made it clear, both in the media and by sending messages, that they do not believe these statements. Israeli PM Netanyahu said Iran tried to assassinate one of his sons. Israeli forces opened fire east of Khan Younis in the southern Gaza Strip. UKMTO said it received a report of an incident 9NM northeast of Oman's Ash Shishah, with the master of an oil tanker reporting the vessel was struck by an unknown projectile causing damage to the engine room and disabling the vessel. However, the crew were reported safe, and the environmental impact was unknown at the time of the report. US TRADE EQUITIES US stocks were mixed on Monday, with the Dow Jones outperforming in the green, while the other major indices closed lower. Weakness was led by the Nasdaq as the Technology sector underperformed, with both semiconductor and memory names under pressure. Despite the broader downside, the equal-weight S&P 500 was flat, while sectors were mixed. Consumer Staples, Communication Services and Financials led the gains, while Technology, Energy and Industrials lagged. Energy prices settled lower despite the Treasury confirming harsh sanctions on Iran under Operation Economic Outcast, targeting nearly 60 Iranian entities, individuals and vessels, alongside secondary sanctions aimed at five key Iranian sectors: digital assets, technology, gold, aviation and shipping. The administration's focus on intensifying economic pressure rather than further military action may have helped keep some pressure on crude. Meanwhile, sources reported that Trump spoke with the Pakistani Army Chief last week ahead of the latter's visit to Tehran, with Trump reportedly wanting Pakistan to use its influence to bring Iran back to the negotiating table, suggesting there remains some willingness from the administration to pursue diplomacy. SPX -0.28% at 7,653, NDX -0.98% at 29,024, DJI +0.26% at 53,417, RUT -0.70% at 2,997. Click here for a detailed summary. TARIFFS/TRADE US President Trump said in a tele-rally that the country desperately needs aluminium and mainly gets it from Canada, while he also commented that he wants to get beef prices down. US President Trump said there is a lot of "bluster" from Ontario Premier Ford, and that without the US, Canada could not survive, while he added that someone should get these clowns (referring to Ford and Carney) to "fall in line" or the consequences for Canada will be far worse. US Treasury Secretary Bessent said Canada was offered a good deal, but chose to reject it. Canada is to announce retaliatory tariffs against the US on Tuesday, while it was later reported that Canadian ministers are to unveil Canada's reply to US tariffs at 16:00BST/11:00EDT. US is said to eye 7.5% China overcapacity tariffs before the Trump-Xi talks, according to multiple reports. Mexican President Sheinbaum said she hopes to reach a trade agreement with the US. NOTABLE HEADLINES US Treasury launched the Quantum-Readiness Task Force to accelerate the financial sector's transition to post-quantum cryptography. US Treasury Secretary Bessent said they are going to continue with the regular programme of auctions when asked if he is looking at reducing auction sizes for longer-term Treasury debt and what other actions could be considered from the Treasury toolkit. Bessent responded that they have not bought any yet, with the first operation on September 9th, when asked if there will be more buybacks. FBN's Gasparino said Treasury Secretary Bessent will do whatever it takes to "put the fear of God" into bond vigilantes, shorting the long end of the curve in an attempt to drive the 10-year yield to 5%, according to Wall Street executives with direct knowledge. US Supreme Court sided with President Trump for now regarding his mail-in ballot curbs and lifted a judicial decision that blocked Trump's order restricting mail-in ballots in 23 states and Washington DC. US grain farmers are said to be facing the worst crisis in decades as the Iran war sends costs spiralling, according to FT. APAC TRADE EQUITIES APAC stocks were mixed following the subdued lead from Wall Street, where most major indices declined amid tech weakness and headwinds from Economic D-Day sanctions on Iran and the US-Canada trade war. ASX 200 traded higher amid strength in the domestic tech, healthcare and financial sectors, while participants digested a plethora of earnings and somewhat balanced RBA August Meeting Minutes. Nikkei 225 saw two-way price action and gradually clawed back initial losses to move into the green, with recent reports noting that Japan is considering exempting gains from non-core business sales from corporate tax if companies reinvest the proceeds in acquisitions. KOSPI underperformed amid recent tech headwinds and with SK Hynix shares also pressured after union members narrowly rejected the tentative wage agreement through a 50.1% vote against. Hang Seng and Shanghai Comp were subdued amid earnings releases and cautiousness as US sanctions on Iran and warnings against countries with economic ties to Iran, increase risks of stoking US-China frictions, while the US is also mulling 7.5% overcapacity tariffs on China. US equity futures are off the prior day's lows but with price action contained in tight parameters. European equity futures indicate a marginally positive cash market open with Euro Stoxx 50 futures up 0.3% after the cash market closed with losses of 0.2% on Monday. FX DXY traded rangebound after mildly gaining yesterday as focus centred on the US announcement of Operation Economic Outcast against Iran and threats against further enablers of the Iranian economy, while attention was also on tariffs amid a US-Canada trade war and with Canadian ministers set to announce retaliation against Trump tariffs later today. Elsewhere, there was very little recently in terms of data and Fed speak, although participants won't have to wait long for potential major catalysts as PCE data is due on Wednesday and with the Jackson Hole Symposium to begin the following day. EUR/USD remained contained within a tight range at the 1.1600 handle amid a lack of pertinent catalysts, while recent comments from ECB's Cipollone provided very little incrementally, in which he stated that monetary policy needs to be well calibrated and that inflation is far from adverse and severe scenarios. GBP/USD lacked conviction following the prior day's choppy mood amid quiet catalysts for the UK, although there were recent comments from UK PM Burnham, who ruled out a general election this year, but wouldn't rule out tax increases in the Budget. USD/JPY edged higher after reclaiming the 159.00 handle and as US yields rebounded. Antipodeans were little changed with a muted reaction seen following the RBA Minutes from the August meeting, which noted the Board is ready to increase rates if upside risks materialise and several members judged it is possible upside risks to inflation would crystallise, although others saw offsetting downside risks, providing time to leave monetary policy unchanged and assess incoming data. PBoC set USD/CNY mid-point at 6.7852 vs exp. 6.7219 (prev. 6.7841). FIXED INCOME 10yr UST futures mildly pulled back overnight following the prior day's bull flattening, which had been spurred by sources suggesting that the Treasury could use funds from the Treasury General Account to fund additional buybacks, while prices were also not helped by incoming supply. Bund futures remained lacklustre after the recent indecisive performance, with participants awaiting German GDP and the ifo Business Climate survey, as well as issuances scheduled for today and tomorrow. 10yr JGB futures were subdued as oil prices partially recovered and amid expectations for an approaching BoJ rate hike, with former central bank board member Adachi noting the BoJ will probably raise the benchmark interest rate next month, stating that the BoJ is pretty much boxed in, markets have almost fully priced in a hike, and if the BoJ doesn't hike, the yen could weaken sharply. COMMODITIES Crude futures were indecisive but slightly rebounded after declining yesterday despite the US announcing Economic D-Day sanctions on Iran, while there were reports overnight that an oil tanker was struck by a projectile off Oman, which caused damage to the engine room and disabled the vessel. Japanese Trade Minister Akazawa said they won't release the government oil stockpile in September and October. Spot gold initially extended on gains, but then pulled back from resistance just shy of the USD 4,700/oz level as yields and oil prices mildly rebounded. Copper futures traded sideways with demand constrained alongside the cautious risk appetite. CRYPTO Bitcoin continued its resurgence and climbed back above the USD 80k level. NOTABLE ASIA-PAC HEADLINES Japan's government is reportedly considering tax breaks on gains from sales of non-core businesses, according to source reports. Gains from non-core sales would be exempt from corporate tax, provided companies reinvest proceeds in acquisitions, while the proposal is expected to be submitted as part of tax reform requests due at the end of this month. RBA Minutes from the August meeting stated the board is ready to increase rates if upside risks materialise and several members judged it is possible upside risks to inflation would crystallise, while others saw offsetting downside risks and time to assess data. It was also stated that following the increases in the cash target earlier in the year, monetary policy appeared sufficiently restrictive to bring inflation back to target within a reasonable timeframe, and that there was still some time to assess the accuracy of that judgement. Members considered whether to raise the cash rate target by 25bps at the meeting or to leave it unchanged for the time being. Furthermore, staff research findings implied that a more pre-emptive approach to monetary policy might be appropriate when the economy is subject to capacity constraints and adverse supply shocks, and members acknowledged that the global cost shock generated by the conflict in the Middle East meant some spare capacity may be necessary to bring inflation back to target. GEOPOLITICS RUSSIA-UKRAINE Russia's Defence Ministry said Russian forces hit a cargo vessel in Black Sea port of Odesa, while three fuel tanks and four military equipment storage facilities intended for the Ukrainian Armed Forces were damaged at the Yuzhny port. Ukrainian forces struck the Afipsky oil refinery in Russia’s Krasnodar Krai overnight. UK PM Burnham said during his visit to Kyiv that the UK is not a fair-weather friend and is here for the long haul. It was separately reported that Burnham is planning a US trip next month to lobby President Trump on Ukraine aid. OTHER Top US and South Korean diplomats agreed to continue "close" communication and cooperation to address North Korea's nuclear issue and promote peace, according to Yonhap. EU/UK NOTABLE HEADLINES UK PM Burnham ruled out a general election this year, but won't rule out tax increases in the Budget, according to an interview with ITV. UK PM Burnham has shelved plans to put Thames Water into a special administration regime amid concerns about the costs and legal risks involved, according to The Times.