Newsquawk Daily European Opening News - 16th September 2026

US VP Vance told the NY Post that the conflict with Iran is expected to shift into a "much different phase" in the coming months. A US official said the military and Gulf countries have begun conducting daytime tanker transits through the Strait of Hormuz, rather than only at night as in recent months, according to Axios. Crude futures pulled back after rallying again yesterday as a series of geopolitical and supply headlines lifted the benchmarks. APAC stocks were mixed in choppy trade, albeit with sentiment gradually improving; European equity futures indicate a modestly positive cash market open. Looking ahead, highlights include UK Inflation (Aug), Italian Inflation Final (Aug), ECB Wage Tracker (Aug), US Retail Sales (Aug), Atlanta Fed GDP (Q3), New Zealand GDP (Q2), Fed Policy Announcement, BCB Policy Announcement, BoC Minutes. Speakers include ECB's Vujcic, Elderson & Nagel, Fed Chair Warsh. Supply from Germany. SNAPSHOT STOCKS Nikkei 225 +0.4% ASX 200 +0.3% Hang Seng -0.1% Shanghai Comp +0.5% Euro Stoxx 50 Sep'26 +0.2% DAX Sep'26 +0.2% ES Sep'26 +0.2% NQ Sep'26 +0.2% FX DXY U/C (99.62) EUR/USD U/C (1.1546) USD/JPY +0.2% (155.30) GBP/USD +0.1% (1.3486) BONDS US T-Note Dec'26 +1 tick Bund Dec'26 +9 ticks US 10yr Yield 4.99% German 10yr Yield 3.54% ENERGY & METALS WTI Oct'26 -1.0% Brent Nov'26 -0.6% Spot Gold +0.7% LME Copper +0.6% CRYPTO Bitcoin +0.3% Ethereum +0.2% As of 06:25BST/01:25EDT LOOKING AHEAD Highlights include UK Inflation (Aug), Italian Inflation Final (Aug), ECB Wage Tracker (Aug), US Retail Sales (Aug), Atlanta Fed GDP (Q3), New Zealand GDP (Q2), Fed Policy Announcement, BCB Policy Announcement, BoC Minutes. Speakers include ECB's Vujcic, Elderson & Nagel, Fed Chair Warsh. Supply from Germany. Click for the Newsquawk Week Ahead. IRAN CONFLICT US VP Vance told the NY Post that the conflict with Iran is expected to shift into a "much different phase" in the coming months. Vance said that the first phase of the conflict, focused on destroying Iran’s nuclear programme, conventional military, and power-projection capabilities, is complete, with the current focus shifting to preventing the regime from rebuilding. US official said the military and Gulf countries have begun conducting daytime tanker transits through the Strait of Hormuz, rather than only at night as in recent months, according to Axios. Top military commanders from the US, Israel, Saudi Arabia, the UAE, Bahrain, Kuwait, Qatar, Jordan and Egypt held a secret meeting in Germany last week, according to Axios citing sources. US CENTCOM commander Cooper reassured regional partners the US will maintain its military presence despite Iranian attacks on bases and outlined plans to expand shipping through the Strait of Hormuz. Explosions were heard in Iran's Qeshm which originated from the sea, according to IRNA. Iran and Pakistan reportedly cooperate to ensure regional security, according to Tasnim. Iran said only a single-digit number of ships are currently passing through the Strait of Hormuz, disputing US claims that traffic through the strategic waterway is increasing. It was separately reported that Strait of Hormuz vessel transits fell to four, according to data. Saudi Arabia and the forces it backs in Yemen are struggling to counter the Houthi advance and are unlikely to regain the key Red Sea port of Mokha, which the Houthis captured last week, according to assessments from several Western European militaries cited by Bloomberg. Saudi air defences intercepted and destroyed a drone attempting to enter Mecca airspace. Sirens were activated and explosions heard in the Jizan and Abha regions of Saudi Arabia. US State Department spokesperson said that the meeting between Lebanese and Israeli ambassadors in Washington discussed the upcoming round of negotiations. US is preparing a USD 2.8bln weapons package for Israel, while it was separately reported that the US is preparing to sell 2,000lb bombs to Israel, according to WaPo. Israeli airstrikes hit several areas in southern Lebanon, according to Al Jazeera. US TRADE EQUITIES US stocks closed lower again on Tuesday, with the Nasdaq and Russell underperforming, while the equal-weight S&P fell 0.4%. Calls for a slowdown in AI development remained an overhang for sentiment, although the SOXX and DRAM ETFs were marginally firmer following their sharp declines on Monday. Sectors were predominantly in the red, with weakness led by Consumer Discretionary, Communication Services and Utilities, although Energy bucked the trend as crude prices rallied amid fresh supply concerns after Libya's NOC said operations had been suspended at three oil fields, while Saudi Arabia reportedly informed some European refiners that their September crude cargo loadings had been cancelled. Oil loadings were also reportedly suspended at the key Saudi Red Sea port of Yanbu following the recent attack on the East-West pipeline. SPX -0.45% at 7,585, NDX -0.78% at 28,938, DJI -0.63% at 52,093, RUT -0.68% at 2,873. Click here for a detailed summary. TARIFFS/TRADE US is pressuring Mexican officials to accept new rules for exports of AI hardware to prevent Chinese companies and other foreign firms from circumventing tariffs, according to WSJ. US Treasury Secretary Bessent is to meet China’s Vice‑Premier He Lifeng in New York on Sunday ahead of the Trump‑Xi summit, according to FT. China launched the Pinglu Canal, a major waterway project aimed at cutting transit times for cargo moving to Southeast Asia. EU capitals have rebuffed Canadian PM Carney's push to be granted a “unique alliance” with the bloc, according to FT. NOTABLE HEADLINES US Treasury Secretary Bessent said the Treasury’s bond buyback intervention was successful and it recently held two of its most successful auctions in 20 years, while he said the government should not set an equilibrium yield level and that addressing the deficit is one factor affecting the 10-year Treasury yield. Bessent also commented that USD 5K checks are a good idea, as well as urged lawmakers not to waive AI liability and said AI firms should not receive a "blank check on liability". APAC TRADE EQUITIES APAC stocks were mixed in choppy trade, albeit with sentiment gradually improving, following the declines on Wall St and recent upside in oil, while participants now await the major central bank rate decisions, beginning with the FOMC later. ASX 200 eked slight gains with strength seen in the commodity-related sectors and with sentiment also helped by M&A news after reports that Brookfield is to acquire Reliance Worldwide for USD 2.8bln, although gains are limited amid weakness in tech, real estate and consumer stocks. Nikkei 225 traded indecisively after mixed data from Japan, in which Exports and Imports topped forecasts, but Machinery Orders disappointed. KOSPI edged higher in two-way trade after swinging between gains and losses, while the tech heavyweights have shown some resilience with SK Hynix mildly underpinned after its union approved the tentative wage agreement in a re-vote. Hang Seng and Shanghai Comp were mixed in range-bound trade, with the Hong Kong benchmark lacklustre as the special administrative region unveiled its first-ever Five-Year plan to align more closely with China, which some fear could be a step away from a free market, while the mainland pared initial losses with the PBoC upping its liquidity efforts. US equity futures recouped some of the prior day's losses as sentiment in Asia gradually improved, but with gains capped ahead of the looming Fed rate decision. European equity futures indicate a modestly positive cash market open with Euro Stoxx 50 futures up 0.2% after the cash market closed with losses of 0.4% on Tuesday. FX DXY was flat amid the overall cautious sentiment and after gaining yesterday alongside the recent surge in oil prices and upside in yields, although dollar-specific newsflow remained sparse ahead of the pivotal FOMC decision, where money market pricing is leaning heavily towards a 25bps hike, although such a move is not quite seen as a foregone conclusion. EUR/USD lacked conviction in the absence of pertinent catalysts, while reports that France would back former Dutch central bank chief Knot to succeed Lagarde as ECB President garnered little reaction. GBP/USD traded uneventfully and lingered beneath the 1.3500 handle as UK CPI data also looms. USD/JPY continued to edge higher and returned to above the 155.00 level ahead of the key central bank rate decisions beginning with the Fed today, while participants also digest mixed data from Japan and recent comments from Treasury Secretary Bessent, who spoke on a wide range of topics at the House Financial Services Committee hearing and defended yen intervention. Antipodeans were contained in the absence of relevant tier-1 data and amid the cautious mood. PBoC set USD/CNY mid-point at 6.7628 vs Exp. 6.7148 (prev. 6.7670). FIXED INCOME 10yr UST futures traded little changed following yesterday's mild declines and curve steepening, with participants cautious ahead of today's key FOMC rate decision. Bund futures kept afloat after rebounding from the prior day's trough but with upside capped as attention turns to key central bank rate decisions and with Bund supply scheduled later. 10yr JGB futures gained as yields mostly declined in Japan and participants digested mixed data. COMMODITIES Crude futures pulled back after rallying again yesterday as a series of geopolitical and supply headlines lifted the benchmarks, including an announcement by Libya's NOC that production and operations were suspended at three oil fields after a valve was closed on the Al-Hamada-Zawiya pipeline, warning it may need to declare force majeure. Furthermore, Saudi Arabia informed some European refiners that their September crude cargo loadings had been cancelled, and oil loadings were reportedly suspended at the key Red Sea port of Yanbu following the recent attack on the East-West pipeline. US Private Inventory Data (bbls): Crude +7.1mln (exp. -1.8mln), Gasoline +1.5mln (exp. -1.2mln), Distillate +1.6mln (exp. +0.8mln), Cushing -0.2mln. US Energy Secretary Wright said he expects the pipeline to resume operations very soon, with its reopening measured in days. Libya's NOC head said production remains around 1.4mln bpd and that related shutdowns have not materially affected output, while he said oil exports are continuing normally, and Sharara oilfield production remains normal. Spot gold was somewhat choppy but eventually reclaimed the USD 4,300/oz level and broke out the prior day's range as oil faded some of its recent advances, while markets now await the Fed. Copper futures mildly gained as risk sentiment gradually improved overnight. CRYPTO Bitcoin eked mild gains but with upside capped in choppy trade and with resistance at USD 76,000. NOTABLE ASIA-PAC HEADLINES US Treasury Secretary Bessent said the US had been in constant dialogue with Japan over intervention and used a "nominal amount" for yen intervention. He added that a stronger yen is better for US exporters and that the US made tens of millions of dollars from the intervention. PBoC Governor Pan said slower loan growth may become a 'new grateful' and that slower credit growth can stabilise debt levels, while China will support local government financing vehicles to resolve debt risks. Furthermore, Pan said they will improve the short-term interest rate adjustment mechanism and further refine policy rates, as well as strengthen the role of policy interest rates. Hong Kong unveiled its first Five-Year Plan to align more closely with mainland China and stated it will adhere to the one country, two systems principle, as well as strengthen the role of the global offshore renminbi business hub. Hong Kong will hold an executive-led system, adopt a holistic approach to development and security, while it will attract China financial firms to the city for business and develop a commodity trading ecosystem. Furthermore, it aims to speed up the Northern Metropolis development and targets GDP growth within a reasonable range in the Five-Year Plan. Australia's Speaker of the House of Representatives will lead a delegation to visit China on September 18th-22nd. DATA RECAP Japanese Trade Balance (Aug) -1105.6B vs. Exp. -1052.6B (Prev. -638.3B) Japanese Exports (Aug YY) 19.3% vs. Exp. 18.2% (Prev. 23.2%) Japanese Imports (Aug YY) 28.0% vs. Exp. 26.3% (Prev. 27.9%) Japanese Machinery Orders (Jul MM) -3.7% vs. Exp. -2.8% (Prev. 9.7%) Japanese Machinery Orders (Jul YY) 11.2% vs. Exp. 15.3% (Prev. 16.9%) GEOPOLITICS RUSSIA-UKRAINE Ukraine expects to require USD 52.6bln in international financial aid in 2027 to support its budget and war effort, according to its draft budget. Russian Defence Ministry said Russian forces hit a tanker in Ukraine’s port of Izmail. OTHER US Treasury Secretary Bessent said the US has taken control of many Venezuelan assets. US mulls purchasing warships from Japan, South Korea to counter China, according to Nikkei. China's Defence Minister said global security governance must be strengthened and they must build an equal and orderly multi-polar world, as well as find a new path to security featuring collaboration rather than confrontation and should uphold multilateralism. Furthermore, he stated that they support regional countries to decide their own future without external interference, while risks should be anticipated and diffused early to prevent minor friction turning into major disputes. EU/UK NOTABLE HEADLINES UK PM Burnham is to meet with US President Trump in New York next week, while they are expected to discuss Ukraine, the Middle East and energy during their meeting at the UNGA. UK Chancellor Healey mulls a budget tax rate on higher-stakes slot machines, according to FT. France is prepared to support Dutch central banker Klaas Knot to succeed Christine Lagarde as ECB President if a French candidate is appointed the bank’s chief economist, according to reports.