Newsquawk Daily Asia-Pac Opening News - 4th September 2026

US stocks rallied on Thursday, with gains broad-based and with outperformance in the Nasdaq. Sectors predominantly finished in the green, led by Consumer Discretionary, Communication Services and Financials, while Tech also rallied, with Materials and Energy the only sectors to close lower. T-notes were firmer across the curve, particularly at the front end, after dovish remarks from Fed Governor Waller, who kept the door open to a September hold following hawkish commentary from Chair Warsh last week. The influential Governor was optimistic on inflation, noting that if disinflation continues, he would support holding rates steady at the next meeting. However, he cautioned that a hot inflation print would see him consider a hike. USD was broadly weaker against peers, weighed by Fed Governor Waller's speech dampening Sept hike bets. Also, additional Yen strength following intervention speculation on Wednesday added further pressure to the DXY. Back to the Fed, Waller's showed an inclination towards holding off on hiking in September, "to support holding rates steady" if Aug inflation data shows continued progress vs. if inflation comes in hot, "would consider a hike". He's also willing to allow for another pause to allow for disinflation, citing little cost to waiting one meeting. DXY has largely erased last week's gains, as money markets return to pricing 50/50 of a hold/hike in September. In terms of the data, ISM Services PMI beat expectations, while the prices component accelerated further with employment little changed. Initial and continuing claims confirmed a low-layoff environment, further highlighted by the Challenger Layoffs in August printing 52,881, -39% Y/Y. Ahead of NFP on Friday (exp. +56k), Revelio Labs Nonfarm Payrolls came in at +36.5k, while the focus turns to the looming NFP report. Looking ahead, highlights include South Korean Current Account, Philippines Core CPI, Japanese Household Spending & Leading Index, Supply from Australia. SNAPSHOT STOCKS S&P 500 +1.1% Nasdaq Comp. +1.4% DJIA +1.2% Russell 2000 +0.5% ES Sep'26 +1.0% RTY Sep'26 +0.3% NQ Sep'26 +1.1% YM Sep'26 +1.1% FX DXY -0.6% (99.01) EUR/USD +0.3% USD/JPY 1.8% GBP/USD +0.3% BONDS US T-Note Dec'26 +6.5 ticks 10yr Bund Sep'26 +20 ticks US 10yr Yield 4.77% German 10yr Yield 3.35% ENERGY & METALS WTI Oct'26 +0.7% Brent Nov'26 +0.1% Spot Gold +1.8% LME Copper +1.0% CRYPTO Bitcoin +5.8% Ethereum +5.1% As of 21:50BST/16:50EDT LOOKING AHEAD Highlights include South Korean Current Account, Philippines Core CPI, Japanese Household Spending & Leading Index, Supply from Australia. Click for the Newsquawk Week Ahead. IRAN CONFLICT US VP Vance said about 15mln barrels of oil went through the Strait of Hormuz on Wednesday and that they have a lot of additional tools at their disposal on Iran; some Trump will use and some he won't, while he added that major combat operations on Iran ended a long time ago. Vance said their message to the Iranians is that they are not talking unless Iran stops shooting at commercial shipping. Furthermore, he would not call the Iran operation a war and stated that if the Iranians keep on shooting at commercial ships, he thinks they have a responsibility, but certainly are not the only ones with the capability to ensure that the Iranians are not destroying world energy markets. US official confirmed to CBS News on Thursday that Iran's attacks the previous night did not impact any military facilities in the Middle East where US forces are based, including in Kuwait, which was targeted by Iranian forces. Iran reportedly threatened the US with a large-scale attack if Israel launches an attack on the Ali al-Taher ridge in southern Lebanon. Iranian Chairman of the National Security and Foreign Policy Commission said the Strait of Hormuz cannot be opened without Iran’s will, according to IRIB. Senior Iranian source said the situation on the battleground demonstrates Iran's readiness for a long-term confrontation with the US, while the source added that the US will get increasingly bound in the crisis around Iran, forcing it to extend its presence in the region, according to TASS. Iran’s Energy Minister said a large portion of the damage to energy facilities during the two recent wars has been repaired. Oman has quietly rejected Iran’s request to jointly charge service fees on commercial ships in the Strait of Hormuz, according to NY Post. Oman and Qatar discussed closer cooperation, while they conducted talks on jointly managing shipping through the strategic Strait of Hormuz. Israeli PM Netanyahu said to the General Staff Forum, "We are convinced of our ability to overthrow the Iranian regime. This is the central mission and it is imminent." Israeli Defence Minister Katz said the military will target all of Iran's infrastructure, including energy, while he added that an Iranian attack would free Israel from its existing limits. IDF said it has completed clearing Hezbollah's underground infrastructure in the Ali Taher Ridge and is working to neutralise it, while it did not find any Iranian advisors or officers in the Ali Taher tunnels, according to N12. Houthis have launched a large-scale offensive on all fronts along the western coast, according to Sky News Arabia, citing Yemeni military sources. US TRADE US stocks rallied on Thursday, with gains broad-based and with outperformance in the Nasdaq. Sectors predominantly finished in the green, led by Consumer Discretionary, Communication Services and Financials, while Tech also rallied, with Materials and Energy the only sectors to close lower. T-notes were firmer across the curve, particularly at the front end, after dovish remarks from Fed Governor Waller, who kept the door open to a September hold following hawkish commentary from Chair Warsh last week. The influential Governor was optimistic on inflation, noting that if disinflation continues, he would support holding rates steady at the next meeting. However, he cautioned that a hot inflation print would see him consider a hike. SPX +1.06% at 7,748, NDX +1.16% at 29,482, DJI +1.18% at 53,691, RUT +0.51% at 2,968. Click here for a detailed summary. TARIFFS/TRADE US President Trump said "It is very good for Canadian Politicians like PM Carney to make Trump “the enemy,” until their Economy collapses then it will prove to be very bad for Politics — Worse than anything that has ever happened to a Canadian Politician". Canadian PM Carney said Canada is ready to sit down and strike a deal with the US when Washington is ready, while he added there must be stability and credibility in any trade deal with the US, as well as reiterated that any trade agreement with the US must preserve the competitiveness of Canadian autos and the steel sector. India's Trade Minister said a final trade agreement between the US and India will be published as soon as the US can provide India with tariff advantages. The official also stated that India and China could hold talks on the sidelines of the BRICS summit. NOTABLE HEADLINES Fed's Waller (voter) said he would support holding the policy rate steady at the September FOMC meeting if August inflation data shows continued progress, but stated if August inflation data comes in hot, he would consider a September rate hike. Waller said finally seeing some signs of disinflation in recent data, although it may not take much inflation acceleration to support tighter policy and if August inflation data shows progress has reversed, a ‘small adjustment’ to the policy rate would help ensure progress resumes. Furthermore, he noted considerable uncertainty about how the outlook for prices, economy is affected by military conflicts, trade policy, and AI. Fed’s Waller said during the Q&A that they should start to see some lower numbers on inflation and expects a reasonable CPI, and he is willing to sit, wait and be patient, although if that reverses in August, he is willing to pull the trigger on a rate hike. Waller stated that they can give disinflation a chance, and can wait one meeting, with little cost to waiting one meeting. WSJ's Timiraos said, "Waller's posture hasn't fundamentally changed since July, but the tilt has, from worried and leaning toward tightening back then to tentatively encouraged and leaning toward holding today." US House GOP leaders are planning to announce the final two weeks of the pre-election session are cancelled, according to Politico. That means members are set to depart no later than Sept. 17 and not return until mid-November. House would come back during the weeks of the 21st and 28th if the Senate moves the GOP reconciliation package. DATA RECAP US ISM Services PMI (Aug) 55.4 vs. Exp. 54.3 (Prev. 54.1) US ISM Services New Orders (Aug) 60.9 (Prev. 57.2) US ISM Services Business Activity (Aug) 61.7 (Prev. 59.1) US ISM Services Prices (Aug) 72.6 (Prev. 70.3) US ISM Services Employment (Aug) 47.8 (Prev. 47.4) US S&P Global Services PMI Final (Aug) 56.5 vs. Exp. 56.8 (Prev. 54.6) US S&P Global Composite PMI Final (Aug) 56.0 vs. Exp. 56.0 (Prev. 54.5) US Trade Balance (Jul) -88.60B vs. Exp. -90B (Prev. -73.30B) US Exports (Jul) 310.7B (Prev. 314.7B) US Imports (Jul) 399.3B (Prev. 388.0B) US Unit Labour Costs Final (Q2 QQ) 1.2% vs. Exp. 1.3% (Prev. 1.3%) US Nonfarm Productivity Final (Q2 QQ) 1.4% vs. Exp. 1.4% (Prev. 0.8%) US Initial Jobless Claims (Aug/29) 206.0K vs. Exp. 205K (Prev. 204.0K) US Continuing Jobless Claims (Aug/22) 1779.0K (Prev. 1771.0K) US Challenger Job Cuts (Aug) 52.881K (Prev. 33.429K) FX USD was broadly weaker against peers, weighed by Fed Governor Waller's speech dampening Sept hike bets. Also, additional Yen strength following intervention speculation on Wednesday added further pressure to the DXY. Back to the Fed, Waller's showed an inclination towards holding off on hiking in September, "to support holding rates steady" if Aug inflation data shows continued progress vs. if inflation comes in hot, "would consider a hike". He's also willing to allow for another pause to allow for disinflation, citing little cost to waiting one meeting. DXY has largely erased last week's gains, as money markets return to pricing 50/50 of a hold/hike in September. In terms of the data, ISM Services PMI beat expectations, while the prices component accelerated further with employment little changed. Initial and continuing claims confirmed a low-layoff environment, further highlighted by the Challenger Layoffs in August printing 52,881, -39% Y/Y. Ahead of NFP on Friday (exp. +56k), Revelio Labs Nonfarm Payrolls came in at +36.5k, while the focus turns to the looming NFP report. EUR benefitted from the dollar weakness and returned to the 1.1600 handle, while the single currency was unfazed by reports that ECB's Schnabel could leave her role at the ECB before her term ends to move to the IMF. GBP strengthened back above the 1.3500 level following comments from Fed's Waller, while BoE's Pill also explained why he supported raising the bank rate to 4% in recent MPC meetings. JPY was among the outperformers and was boosted by optimism over MoF support for the currency, while a source report also noted that the BoJ is favouring a 25bps hike and a flexible future pace. FIXED INCOME T-notes rallied across the curve after Fed's Waller kept a September hold in play. COMMODITIES Oil prices settled mixed with two-way action seen through the session. Saudi Arabia set October Arab Light crude oil OSP to Asia at minus USD 2/bbl vs Oman/Dubai average, to NW Europe at minus USD 2.15/bbl vs ICE Brent settlement, and to the US at plus USD 4.60/bbl vs ASCI. Iran's Oil Minister said they started drilling more than 30 wells in South Pars, and some have been successful. Russian Deputy PM Novak said Russia is experiencing some gasoline shortages. Novak also commented that Russia's gas supplies to China will reach 50bln cubic metres this year, according to TASS. GEOPOLITICAL RUSSIA-UKRAINE Ukrainian President Zelensky said US negotiators are to visit Kyiv and Moscow, while Ukraine expects a meeting with the US in the coming days. Ukraine's Foreign Minister said President Zelensky recently held talks with a US negotiating team and stressed the dialogue is underpinned by regular contact with the US, while there will be a "new dynamic" in peace talks. Russian President Putin said that Russia and Ukraine should agree first and noted that there is an opportunity to reach a peace agreement. Putin added that other countries should support it and that contacts with the US continue, while he stated they are in favour of restoration of relations with the US and that President Trump is ready for positive and constructive work. Furthermore, he said there are contacts with Ukraine and that these are with special services. Russia hit two vessels with cargo for Ukraine in the Black Sea, according to Interfax. Russia summoned Norwegian ambassador over seizure of Russian ship by Norway, according to RIA. OTHER US President Trump reiterated that Spain doesn't do what they should in NATO, while he added that they did the right thing on Iran and just want the war to end in Ukraine. US issued fresh Cuba-related sanctions, while US Secretary of State Rubio said the Cuban regime continues to pose a deep threat to the US. ASIA-PAC NOTABLE HEADLINES BoJ is reportedly favouring 25bps hike and a flexible future pace, according to sources. BoJ accounts showed there was no large-scale yen intervention on Wednesday. Japan's top currency diplomat Mimura said they continue to stand ready on FX, but declined to comment on whether rate checks were conducted, while he is neither reassured nor satisfied with the current FX market. Japan's government is reportedly looking to convene an extraordinary Diet session in early October, while it is expected to focus on consumption tax cuts and a reduction in the number of seats, according to Asahi. Japan GPIF’s unusual August management committee meeting has fuelled speculation it may raise its 25% domestic bond allocation target, according to Bloomberg. The speculation comes as Japan’s 10yr bond yield has risen about 1ppt since early March to over 3%, increasing expectations that the pension fund could review allocations and potentially ease upward pressure on yields. EU/UK NOTABLE HEADLINES BoE's Pill explained why he supported raising the bank rate to 4% in recent MPC meetings and argued that clear, prompt and decisive policy action and communication would help steer markets, reduce uncertainty and support monetary policy transmission. Furthermore, his own response has pointed to a need to raise the bank rate to 4% and said raising the bank rate on this basis need not be the start of a prolonged and aggressive series of increases, while he added that a prompt increase in the bank rate may serve to head off some of the potential insidious ‘catch up’ dynamics. ECB's Schnabel could leave her role at the ECB before her term ends to move to the IMF, according to Handelsblatt. DATA RECAP French S&P Global Services PMI Final (Aug) 48.0 vs. Exp. 48.4 (Prev. 49.6) French S&P Global Composite PMI Final (Aug) 48.5 vs. Exp. 48.8 (Prev. 49.4) German S&P Global Services PMI Final (Aug) 49.7 vs. Exp. 48.5 (Prev. 49.8) German S&P Global Composite PMI Final (Aug) 51.8 vs. Exp. 51.0 (Prev. 51.0) European S&P Global Services PMI Final (Aug) 51.6 vs. Exp. 51.7 (Prev. 51.7) European S&P Global Composite PMI Final (Aug) 52.0 vs. Exp. 52.1 (Prev. 52.0)