Newsquawk Daily European Opening News - 21st August 2026

APAC stocks were mixed as the region attempted to shrug off the broadly negative handover from Wall Street; European equity futures indicate an uneventful open. In FX, DXY marginally softened, and USD/JPY was choppy overnight following the mostly in-line Japanese inflation data for July. 10yr UST futures lingered around the prior day's trough, Bund futures mildly retreated, and 10yr JGB futures tracked previous declines in global peers. Crude futures were contained overnight amid a lack of major fresh developments; spot gold resumed its recent choppy performance above the USD 4,500/oz level. Looking ahead, highlights include Global S&P Flash PMIs (Aug), UK Retail Sales (Jul), PSNB (Jul), EU Negotiated Wage Growth (Q2), Canadian Retail Sales (Jun), EU Consumer Confidence Flash (Aug), BoC SLOS (Q2). Credit rating updates from Fitch on Poland, Moody's on the Netherlands and Sweden. SNAPSHOT STOCKS Nikkei 225 -0.6% ASX 200 -0.3% Hang Seng +0.6% Shanghai Comp -0.2% Euro Stoxx 50 Sep'26 -0.1% DAX Sep'26 U/C ES Sep'26 +0.1% NQ Sep'26 +0.2% FX DXY -0.1% (98.80) EUR/USD +0.1% (1.1692) USD/JPY U/C (159.00) GBP/USD +0.1% (1.3642) BONDS US T-Note Sep'26 -0.5 ticks Bund Sep'26 -7 ticks US 10yr Yield 4.71% German 10yr Yield 3.26% ENERGY & METALS WTI Oct'26 -0.8% Brent Oct'26 -0.6% Spot Gold +0.4% LME Copper +0.7% CRYPTO Bitcoin +3% Ethereum +1.3% As of 06:15BST/01:15EDT LOOKING AHEAD Highlights include Global S&P Flash PMIs (Aug), UK Retail Sales (Jul), PSNB (Jul), EU Negotiated Wage Growth (Q2), Canadian Retail Sales (Jun), EU Consumer Confidence Flash (Aug), BoC SLOS (Q2). Credit Rating update from Fitch on Poland, Moody's on the Netherlands and Sweden. Click for the Newsquawk Week Ahead. IRAN CONFLICT US President Trump said on Michael Cohen's podcast that the US is essentially and soon controlling the strait, while he said Iran has some missiles and drones, but low capacity to build. US VP Vance responded that their main focus is not really on that, when asked how long Iran could withstand economic pressure, while he added that Iran is under a lot of pressure, which helps achieve our goal of making sure that Iran does not get a nuclear weapon. US issued Iran-related designations and targeted Hezbollah with fresh sanctions, emphasising ties to the Iranian government. US OFAC also issued a Russia general license, while it issued counterterrorist sanctions and counternarcotic designations on Cuba. Israeli fighter jets entered southern Lebanese airspace, and reports indicated Israeli air strikes on Ali al-Taher Heights, according to Fars News. Israeli forces fired a shell at agricultural lands in the Quneitra countryside, Syria. Israeli banks are near a deal to delay the cutoff of Palestinian services as Israel's government seeks to avert a collapse of the Palestinian Authority economy, according to Times of Israel Yemen's Houthis said they targeted a Saudi airport and an Aramco facility. US TRADE EQUITIES US stocks were lower on Thursday, with the Russell and Dow underperforming; the latter was weighed by Walmart (WMT), which slumped following its earnings report and weak guidance. Indices closed lower across the board with negative breadth, as the equal-weight S&P 500 (RSP) fell around 0.7%. Sectors were also predominantly lower, with Health Care, Consumer Staples and Consumer Discretionary lagging. Health Care gave back some of Wednesday's MRNA/MRK-induced gains, while Staples were weighed on by WMT. Energy and Real Estate were the only sectors to close in the green. Crude prices were firmer amid reports that the Houthis are preparing to enter a new phase of escalation against Saudi Arabia. Meanwhile, Iranian Supreme Leader adviser Rezaei said the best response to Trump's escalation of economic warfare would be to withdraw from the Nuclear Non-Proliferation Treaty, which legally commits Iran to maintaining a peaceful nuclear programme. US President Trump also reportedly told his team that the chances of reaching a deal with Iran are slim and ordered a freeze on talks for several weeks. SPX -0.87% at 7,641, NDX -0.72% at 29,213, DJI -1.32% at 52,764, RUT -1.34% at 2,992. Click here for a detailed summary. TARIFFS/TRADE Canadian PM Carney spoke with Mexican President Sheinbaum, while both sides discussed the importance of renewing the USMCA as soon as possible. Canadian Minister responsible for US trade said both sides are continuing to hold talks on a possible deal, while he added they are very close to a deal and continue to make progress. China's Finance Ministry is preparing a new round of economic talks with Canada. NOTABLE HEADLINES Fed Chair Warsh will speak at 10:00EDT/15:00BST on August 28th at Jackson Hole. White House said US President Trump signed a directive to help boost space launches. NY Governor Hochul said she has no plans to raise taxes in the coming year, but plans could change if federal aid to the state is cut, according to NYT. APAC TRADE EQUITIES APAC stocks were mixed as the region attempted to shrug off the broadly negative handover from Wall Street, where risk sentiment was dampened amid a rebound in yields and Walmart's weak sales growth. ASX 200 traded with mild losses amid another deluge of earnings and mostly softer flash PMI data. Nikkei 225 retreated at the open but is well off today's worst levels, with participants digesting the latest inflation data from Japan, which mostly matched estimates and remained below the 2% price target, but accelerated from the previous and could support the case for further BoJ rate hikes. KOSPI clawed back early losses with price action driven by the tech heavyweights, with SK Hynix considering building a memory chip plant in Japan's Miyagi prefecture and with Samsung Electronics expected to announce a KRW 100tln shareholder return plan today. In addition, the comments from BoK's newly appointed Senior Deputy Governor Kwon were less hawkish than his predecessor, in which he stated that cautious and flexible policy decisions are needed. Hang Seng and Shanghai Comp were somewhat mixed, with the Hong Kong benchmark in the green and its biggest movers driven by recent earnings releases, while the mainland struggled for direction despite China's Vice Finance Minister flagging incremental policies and the PBoC resuming 7-day reverse repo operations for the first time in more than a week. US equity futures saw rangebound trade, which provided some reprieve following recent declines. European equity futures indicate an uneventful open with Euro Stoxx 50 futures flat after the cash market closed 0.4% lower on Thursday. FX DXY marginally softened in range-bound trade amid the absence of any major new catalysts and after marginally gaining yesterday alongside the notable rebound in long-end US Treasury yields. The latest data was encouraging, and showed continued stability in the labour market as initial claims hovered around 200k, while Philly Fed beat, in what was a strong manufacturing report, helped by significantly improved expectations of future business conditions. In terms of Fed speak, Daly noted that policy is in a good place to keep watching the data, whilst Musalem maintained the view that hiking rates now could save more aggressive action later and suggested that the Super El Niño might be the next supply shock. EUR/USD edged higher overnight and eyed a return to the 1.1700 handle amid a weaker dollar, while participants await a slew of flash PMI data from across the continent. GBP/USD rose towards yesterday's peak and held on to the spoils following its recent reclaim of the 1.3600 level, with the attention turning to incoming data releases including UK Retail Sales. USD/JPY was choppy overnight after trickling beneath the 159.00 level and following the mostly in-line Japanese inflation data for July, which showed an acceleration from the previous month. Antipodeans outperformed as sentiment in Asia gradually improved, with both AUD and NZD shrugging off mostly weaker flash PMIs from Australia and trade data from New Zealand. FIXED INCOME 10yr UST futures lingered around the prior day's trough with demand subdued after Treasury yields rose yesterday and the long-end briefly pared the post-Treasury buyback rally. Bund futures mildly retreated following the recent indecisive performance, while participants look ahead to PMI data from Germany and across the bloc. 10yr JGB futures tracked previous declines in global peers, with demand not helped by the latest Japanese inflation data, which printed mostly in line with expectations, but accelerated from the previous. COMMODITIES Crude futures were contained overnight amid a lack of major fresh developments and with the crude benchmarks taking a breather after extending on gains yesterday as US/Iran relations showed no signs of improving, with Trump said to have told his negotiating team that the chances of an agreement with Iran have become slim and ordered a freeze on negotiations with Iran for several weeks, while Yemeni Houthis were reported to be preparing to enter a new phase of escalation against Saudi Arabia. Spot gold resumed its recent choppy performance above the USD 4,500/oz level Copper futures edged higher amid the somewhat gradual improvement in risk sentiment. CRYPTO Bitcoin extended its resurgence and briefly reclaimed the USD 75,000 level. NOTABLE ASIA-PAC HEADLINES China's Finance Ministry is to expand the scope of interest subsidies for loans to smaller private firms and it is to raise the subsidy quotas for eligible firms. China Vice Finance Minister noted a timely planning and introduction of incremental policies based on economic development trends, while they will maintain continuity and stability of macro policies. China also signalled a focus on stable, consistent macro policy and longer-term fiscal planning. BoK's new senior deputy governor Kwon said growth is improving more than expected, inflation is exceeding target and financial stability risks remain, while he added that cautious and flexible policy decisions are needed due to FX volatility and geopolitical risks. Kwon stated he doesn't want to define himself as a hawk or dove, and will make decisions based on circumstances and data. Japanese PM Takaichi plans a cabinet reshuffle in mid-to-late September, according to Yomiuri DATA RECAP Japanese CPI (Jul YY) 1.9% vs. Exp. 1.9% (Prev. 1.6%) Japanese Core CPI (Jul YY) 1.8% vs. Exp. 1.8% (Prev. 1.6%) Japanese CPI Ex-Food and Energy (Jul YY) 1.8% vs. Exp. 1.9% (Prev. 1.7%) Australian S&P Global Manufacturing PMI Flash (Aug) 52.0 (Prev. 52.0) Australian S&P Global Services PMI Flash (Aug) 52.9 (Prev. 53.6) Australian S&P Global Composite PMI Flash (Aug) 52.5 (Prev. 53.2) GEOPOLITICS OTHER North Korea reportedly fired about 10 short-range ballistic missiles in its third missile launch this month, hours after rejecting US President Trump's overtures. China and Indonesia will expand joint-military exercises and will work together to accelerate the modernisation of their respective armed forces, according to Indonesia’s Defence Minister. US Secretary of State Rubio and Canada's Foreign Minister Anand reaffirmed shared hemispheric priorities, while they discussed Arctic security and Cuba reform EU/UK NOTABLE HEADLINES UK PM Burnham reportedly plans GBP 13bln boost to foreign aid, making tax rises more likely, according to iPaper. UK Chancellor Healey has been warned by investors and analysts to limit budget borrowing and not to relent in efforts to reduce the UK's fiscal deficit amid a bond sell-off, according to FT. UK's largest banks renewed a warning to the government against hiking taxes on the industry as Chancellor Healey prepares to deliver his inaugural Budget in October, according to Sky News. DATA RECAP UK GfK Consumer Confidence (Aug) -14 vs. Exp. -18 (Prev. -17)