Newsquawk Daily Asia-Pac Opening News - 2nd September 2026

US stocks closed lower as this week's theme continued to be dominated by higher yields and oil prices amid the continuing hostilities in the Middle East. Today, Iran fired on tankers transiting the Strait of Hormuz, the US responded with fresh strikes on IRGC targets/radars near the Strait, and in turn, the Iranians fired back at the US. As such, oil prices settled USD 4+ higher per barrel, short-end and belly yields hit new YTD highs, the dollar was firmer, while gold declined. Furthermore, Trump didn't seem keen to pursue diplomacy and said he thinks an agreement with Iran isn't worth the paper it's written on, and warned if Iran responds, they will be ‘totally wiped out as a country’. USD gained as Middle East tensions once again escalated with the launching of attacks inside Iran, while an Iranian military source said they would respond to US attacks in multiple ways and would be multiple times their attacks. As such, following all the US/Iran updates, the dollar saw strength, as did oil, while Treasuries, spot gold, and US indices all sold off in typical risk-off trade. Overnight, desks will await any response and any retort from the US, given President Trump warned Iran will be ‘totally wiped out as a country’ if it retaliates, and “if they do respond, they’ll be hit much harder". Elsewhere, US data came in the form of ISM Mfg. PMI and JOLTS; the former slightly disappointed, although prices were underneath consensus, while JOLTS declined and was underneath Wall St. expectations; the quits rate edged lower while the vacancy rate was unchanged M/M. Lastly, Fed Governor Barr remarked that if inflation doesn't moderate soon, it will be time for an interest rate hike. Looking ahead, highlights include New Zealand Building Permits, South Korean CPI, Japanese Monetary Base, Australian GDP, RBNZ Rate Decision & Post-Meeting Press Conference, Supply from Australia. SNAPSHOT STOCKS S&P 500 -0.7% Nasdaq Comp. -1.0% DJIA -0.8% Russell 2000 -1.2% ES Sep'26 -0.7% RTY Sep'26 -1.1% NQ Sep'26 -1.3% YM Sep'26 -0.7% FX DXY +0.3% (99.68) EUR/USD -0.3% USD/JPY +0.3% GBP/USD -0.3% BONDS US T-Note Sep'26 -9 ticks 10yr Bund Sep'26 -62 ticks US 10yr Yield 4.80% German 10yr Yield 3.34% ENERGY & METALS WTI Oct'26 +5.7% Brent Nov'26 +5.0% Spot Gold -2.7% LME Copper -0.7% CRYPTO Bitcoin -2.0% Ethereum -2.2% As of 21:50BST/16:50EDT LOOKING AHEAD Highlights include New Zealand Building Permits, South Korean CPI, Japanese Monetary Base, Australian GDP, RBNZ Rate Decision & Post-Meeting Press Conference, Supply from Australia. Click for the Newsquawk Week Ahead. IRAN CONFLICT US President Trump said the US was striking Iranian targets near the Strait of Hormuz, adding that the strikes were larger and more powerful and were in retaliation for Iran’s failed attempt to add sea mines to the Strait. US President Trump warned that if Iran responds, they’ll be hit much harder,” adding, “This is a very big hit today. If it goes a third time, they’re going to be totally wiped out as a country.” Trump also commented that he thinks an agreement with Iran isn't worth the paper it's written on and said they gave Iran a lot of chances. US CENTCOM said that at 12 PM ET, US forces began striking IRGC targets in Iran, while it stated the strikes followed recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members deployed to the region. US has assessments that Iran was planning to expand attacks against commercial ships, according to Al Arabiya. US strikes targeted weapons and military equipment that Iran was transporting in the Strait of Hormuz. Iran said the US struck Khuestak in Southern Hormozgan, while explosions were heard in Asaluyeh and at the gas plant complex in Aslawiya. Several explosions were heard in Iran’s Bandar Abbas, Qeshm, Chabahar, Jask and Sirik, while explosions were heard in Erbil, Iraq and from US bases in Jordan. Iran launched missiles in retaliatory attacks against US bases and interests. A military source told Tasnim that Iran would respond to US attacks in multiple ways and that the response would be multiple times their attacks, while it was reported that Iranian missiles were fired at American bases in the region. US Treasury Secretary Bessent said 85-90% of Iran's factories have the ability to rebuild and that Iran has the 3rd-greatest energy resource, while he stated that bank sanctions will probably be announced this week and next. Bessent also said the US has great support from the EU, ECB, UK, UAE and Bahrain, has zero tolerance for Iran and will economically strangle it. He added that Iran sanctions could be imposed on airline leasing companies and that he has held private discussions with China regarding Iran. White House official said that “the Iranians want to make a deal with us, but their positions are always late and fall short of what is required, according to Al Jazeera. US embassy in Israel warned US citizens in the Middle East of a possible “escalation,” according to Sky News. Iranian President Pezeshkian said Iran did not initiate the war and defended itself, adding that Iran continues to consider diplomacy and negotiation as the main path to resolving disputes, according to Tasnim. Pezeshkian also said he absolutely does not want war and believes it is not in anyone's interest, according to Al Jazeera. Iran's Parliament Speaker Ghalibaf said that if the US siege is intensified, “we will definitely respond militarily,” and said that the US is giving ships “false guarantees” about passage through the Strait of Hormuz. Iranian Parliament Speaker Ghalibaf said Iran’s armed forces have full control of the Strait of Hormuz and that US-backed vessels attempting to pass are being confronted, while Ghalibaf also said Iran has made progress through both military power and diplomacy in the Strait of Hormuz, citing an agreement with Oman as a diplomatic achievement, according to Tasnim. Iranian Foreign Ministry spokesperson Baghaei said Iran remains committed to its Nuclear Non-Proliferation Treaty (NPT) obligations and maintains a principled opposition to nuclear weapons, according to Nour News. He added that Tehran considers nuclear weapons incompatible with its religious teachings and harmful to humanity. Iranian Foreign Ministry spokesperson Baghaei said, “We are in a situation where it is not possible to talk about a return to the understanding, and the reason is clear because the American side has violated it,” according to Tasnim. Iranian MP said Iran should launch pre-emptive attacks on US interests across the Middle East to force Washington to retreat and break its blockade, according to Iran International. IRGC said US attacks will tighten the lock on the Strait of Hormuz. Qatari Foreign Ministry said, “We are continuing contacts to resume negotiations between Iran and the United States,” according to Al Hadath, adding that efforts are being intensified. US TRADE US stocks closed lower as this week's theme continued to be dominated by higher yields and oil prices amid the continuing hostilities in the Middle East. Today, Iran fired on tankers transiting the Strait of Hormuz, the US responded with fresh strikes on IRGC targets/radars near the Strait, and in turn, the Iranians fired back at the US. As such, oil prices settled USD 4+ higher per barrel, short-end and belly yields hit new YTD highs, the dollar was firmer, while gold declined. Furthermore, Trump didn't seem keen to pursue diplomacy and said he thinks an agreement with Iran isn't worth the paper it's written on, and warned if Iran responds, they will be ‘totally wiped out as a country’. SPX -0.71% at 7,632, NDX -1.29% at 29,077, DJI -0.79% at 52,772, RUT -1.23% at 2,920. Click here for a detailed summary. TARIFFS/TRADE US Treasury Secretary Bessent said the US must de-risk from China, but added that the US does not want to pull away from China. US officials accused Chinese shipping firm COSCO (1919 HK) of using concealed equipment aboard its vessels to gather military communications intelligence near foreign coastlines. USTR Greer said Canada “could see additional tariffs and you could see import bans or prohibitions similar to the ones that Canada has imposed on us earlier,” according to Politico, adding, “ideally, we leave energy markets alone.” Greer also noted that President Trump has many options in front of him and said there are no negotiations happening on trade right now. Canadian PM Carney said trade discussions with the US are dependent on the US taking the situation more seriously and that before the recent breakdown, he did not think there was a full Canada-US trade deal. Mexican President Sheinbaum said US tariffs are creating difficulties, yet the economy is still resilient. NOTABLE HEADLINES Fed's Barr (voter) said if inflation does not moderate soon, it will be time for an interest rate hike, while he stated that inflation remains too high and he favours steady rates if confident inflation is moderating. Barr said, “At our September FOMC meeting, will again discuss the outlook for inflation and policy stance. If trends in the data give me some confidence that inflation is moderating on a path to 2%, then I think we can take a bit more time to assess our policy stance. However, if inflation appears not to be moderating sufficiently, then think we should act decisively to raise rates.” DATA RECAP US S&P Global Manufacturing PMI Final (Aug) 53.9 vs. Exp. 53.2 (Prev. 53.9) US ISM Manufacturing PMI (Aug) 54.6 vs. Exp. 55.2 (Prev. 55.6) US ISM Manufacturing New Orders (Aug) 53.7 (Prev. 56.7) US ISM Manufacturing Employment (Aug) 51.2 (Prev. 52.8) US ISM Manufacturing Prices (Aug) 71.1 vs. Exp. 72 (Prev. 71.1) US Construction Spending (Jul MM) -0.5% vs. Exp. 0% (Prev. -0.1%) US Dallas Fed Services Index (Aug) 4.2 (Prev. 6.6) US Dallas Fed Services Revenues Index (Aug) 6.6 (Prev. 9.5) US JOLTS Job Openings (Jul) 7.271M vs. Exp. 7.3M (Prev. 7.182M) FX USD gained as Middle East tensions once again escalated with the launching of attacks inside Iran, while an Iranian military source said they would respond to US attacks in multiple ways and would be multiple times their attacks. As such, following all the US/Iran updates, the dollar saw strength, as did oil, while Treasuries, spot gold, and US indices all sold off in typical risk-off trade. Overnight, desks will await any response and any retort from the US, given President Trump warned Iran will be ‘totally wiped out as a country’ if it retaliates, and “if they do respond, they’ll be hit much harder". Elsewhere, US data came in the form of ISM Mfg. PMI and JOLTS; the former slightly disappointed, although prices were underneath consensus, while JOLTS declined and was underneath Wall St. expectations; the quits rate edged lower while the vacancy rate was unchanged M/M. Lastly, Fed Governor Barr remarked that if inflation doesn't moderate soon, it will be time for an interest rate hike. EUR marginally weakened and returned to beneath the 1.1600 level amid the dollar strength, while there was little reaction to the latest EU inflation data. GBP trickled lower but just about held on to the 1.3500 handle, while the currency failed to benefit from comments from BoE's Mann that it is better for interest rates to be a little bit too high and then correct if necessary. JPY weakened amid higher oil prices and US yields, which saw USD/JPY revert to 160.00 territory, putting participants on intervention alert, while it was reported that BoJ Governor Ueda met US Treasury Secretary Bessent on the sidelines of the G20 on Sunday and discussed monetary policy. FIXED INCOME T-notes declined and yields tracked oil prices higher as US-Iran strikes continued. COMMODITIES Oil prices rallied and settled at highs as US/Iran traded further strikes alongside punchy rhetoric. US official said the next phase of talks regarding the transition in Venezuela will resume in the middle of the month and that the US will continue to push for private-sector US investment. Chevron (CVX) will announce expanding operations in Venezuela, while Energy Secretary Wright is heading to Venezuela for signings tomorrow. Venezuela's assembly backed the oil deal announced with the US. GEOPOLITICAL RUSSIA-UKRAINE Ukraine's military intelligence said Ukrainian forces struck Russia's Novatek oil complex in the Leningrad region. Russian Defence Ministry said Russian forces hit a cargo vessel in Pivdennyi port. US Special Envoy Witkoff and Kushner are reportedly stepping up their negotiating efforts on Ukraine, according to a TASS source. German Interior Minister said Russia was involved in the attempted drone attack on a Ukrainian cargo plane at Leipzig/Halle airport. ASIA-PAC NOTABLE HEADLINES Japanese PM Takaichi said Japan will pursue both a strong economy and fiscal sustainability, according to Kyodo. BoJ Governor Ueda met US Treasury Secretary Bessent on the sidelines of the G20 finance leaders' meeting on Sunday and discussed future monetary policy. US Treasury Secretary Bessent said he emphasised the importance of sound formulation and communication of monetary policy to anchor inflation expectations in a meeting with BoJ Governor Ueda. Furthermore, he expressed strong support for Japan's decisive market and monetary steps to address the substantial undervaluation of the yen, while also noting the role of yen weakness in contributing to domestic inflationary pressures in Japan. EU/UK NOTABLE HEADLINES BoE's Mann said it is better for interest rates to be a little bit too high and then correct if necessary. Mann stated she had seen somewhat stronger economic activity from the last MPC meeting to this one and added that she wants to avoid inflation embedding into pay next year. ECB's Kocher said an ECB hike is needed if upside risks are confirmed in the projection. ECB's Nagel said he welcomes coordinated intervention on the JPY and expects consultations on future intervention measures. ECB's Simkus said a hike in September is “not going to be enough,” but added that a 50bps hike is not needed. Simkus said he is not “particularly” worried about the increase in long-term bond yields and expects the updated projections to show the interest rate path moving up a bit. DATA RECAP UK S&P Global Manufacturing PMI Final (Aug) 51.7 vs. Exp. 51.5 (Prev. 51.9) German S&P Global Manufacturing PMI Final (Aug) 54.3 vs. Exp. 54.1 (Prev. 52.2) French S&P Global Manufacturing PMI Final (Aug) 51.1 vs. Exp. 51.5 (Prev. 49.8) European S&P Global Manufacturing PMI Final (Aug) 52.7 vs. Exp. 52.8 (Prev. 51.9) European CPI Ex Food & Energy (Aug Y/Y) 2.1% (exp. 2.3%, prev. 2.2%) European HICP (Aug YY) 3.3% vs. Exp. 3.3% (Prev. 2.9%); Services 3.0% (prev. 3.3%)