Newsquawk Daily Asia-Pac Opening News - 20th August 2026

US stocks were somewhat mixed with most major indices marginally higher, although the tech-heavy Nasdaq 100 underperformed, while sectors saw an upward bias with Healthcare outperforming and buoyed by Moderna surging in excess of 165% after a cancer breakthrough drug trial with Merck. Nonetheless, the main story on Wednesday was the US Treasury announcing it is increasing, by at least double, the size of liquidity support buyback operations for longer-dated nominal coupon securities, from the current USD 2bln to at least USD 4bln. Following this update, US Treasury yields fell, particularly in the long end, while the Dollar saw notable pressure. Given this, all G10 FX peers gained vs. the Greenback, with the Swissy outperforming. WTI and Brent eked out slight strength as a US/Iran deal seems no closer, although geopolitical newsflow was light on Wednesday. There was no US data or Fed speak, and the latest FOMC Minutes were largely as expected with few shocks (review below). Precious metals surged on the aforementioned news, while crypto saw a rally through the US session. USD was pressured by a drop in long-end yields in response to the US Treasury announcing plans to increase the size of liquidity support buyback operations for longer-dated nominal coupon securities by at least double. The announcement marks a signal from the US Treasury of a willingness to step in and ease fears over rising long-end yields; however, given the increase only pertains for the remainder of this refunding quarter, further USD weakness may be limited. The initial USD weakness extended throughout the day and held, leaving DXY back at May levels of 98.84. Separately, FOMC Minutes sparked little reaction. The Minutes highlighted what Fedspeak has pointed towards in recent weeks: Most participants assessed higher rates would likely be necessary if inflation did not fall. Meanwhile, Chair Warsh made the case that six scheduled meetings per year instead of eight would allow more information to accumulate between meetings; no final decision was made. Looking ahead, highlights include Japanese Trade Data, Australian MI Inflation Gauge & Jobs Data, PBoC Loan Prime Rates, Supply from Australia & Japan. SNAPSHOT STOCKS S&P 500 +0.2% Nasdaq Comp. +0.2% DJIA +0.2% Russell 2000 +0.5% ES Sep'26 +0.2% RTY Sep'26 +0.5% NQ Sep'26 -0.1% YM Sep'26 +0.2% FX DXY -0.9% (98.90) EUR/USD +0.9% USD/JPY -0.9% GBP/USD +0.5% BONDS US T-Note Sep'26 +8.5 ticks 10yr Bund Sep'26 Flat US 10yr Yield 4.65% German 10yr Yield 3.26% ENERGY & METALS WTI Oct'26 +0.4% Brent Oct'26 +0.6% Spot Gold +4.2% LME Copper +0.5% CRYPTO Bitcoin +7.0% Ethereum +14.9% As of 21:50BST/16:50EDT LOOKING AHEAD Highlights include Japanese Trade Data, Australian MI Inflation Gauge & Jobs Data, PBoC Loan Prime Rates, Supply from Australia & Japan. Click for the Newsquawk Week Ahead. FOMC MINUTES FOMC MINUTES from the July meeting stated that most participants assessed higher rates would likely be necessary if inflation did not fall and most supported keeping interest rates unchanged at the meeting, but several favoured an increase. Various participants said tighter financial conditions over the intermeeting period reflected strong economic growth and expectations for the Fed to adopt a more restrictive stance before long, while a few of the participants who favoured raising rates at the meeting judged doing so would likely help forestall the need for further hikes. Chairman Warsh said six scheduled meetings per year, held roughly every two months, would allow more information to accumulate between meetings, although no decisions were made on the number of meetings and Warsh indicated no change to the 2026 schedule. Furthermore, almost all FOMC members agreed it was appropriate to retain policy statement affirming FOMC 'will deliver price stability', and several participants said price increases over last year were broad based, spanning various categories of goods and services, while Fed staff economic outlook showed the inflation outlook was similar to the one prepared for the June meeting but the economic outlook was 'a touch weaker'. IRAN CONFLICT US President Trump said Iran negotiations may be at some point, while he reiterated Iran cannot have a nuclear weapon and said oil prices will be a lot lower when this is over. US President Trump said Treasury Secretary Bessent may unveil Iran sanctions this week and that Bessent won’t play games, while he added that the US has very tough sanctions options and is monitoring developments. Trump reiterated that the Strait of Hormuz is currently open with many vessels transiting. US Ambassador to Israel said large-scale warfare against Iran remains an option, and they are working to establish a mechanism with Syria, Israel and Turkey to reduce escalation, according to Al Hadath. NATO official said they are prepared to respond to any threat and will take necessary measures to defend all allies. The official said that Jordan’s air defence system intercepted ballistic missiles launched from Iran towards Turkey on four occasions, as well as stated NATO’s deterrence and defence posture remains strong and effective. Iran's military warned Gulf neighbours against assisting US forces, according to Al Jazeera. Iran's Rezaei said if Iran's interests are harmed anywhere in the world, it could raise tariffs or seize assets in the Strait of Hormuz of hostile states. Iranian Deputy Chairman of the Parliament's National Security Commission said a "'new passage' in the Strait of Hormuz, other than the southern route, will soon be announced in the form of a joint statement with Oman". Iranian Deputy Parliament Speaker said, "We consider the Strait of Hormuz part of Iran and the Islamic Republic will continue to administer it." He added Iran recognises the Sultanate of Oman's right to the extent that this right is proven to it, while the Strait of Hormuz will continue to be managed by Iran and the Iranian Armed Forces. Iranian official said US President Trump's talk about bombing Iran is illogical and has no effect, while the official said Trump's statements are absurd and have no impact, according to Al Mayadeen. A source close to Iran's negotiating team rejected the White House's claim, saying there had been no direct Iran-US negotiations and that talks with Oman concerned sovereignty over the Strait of Hormuz, Fars News reports. The source added that contacts with the US stopped after Washington violated the Islamabad agreement and that the latest talks were unrelated to the US. Egyptian Foreign Minister announced the continuation of active consultations between Cairo and Tehran with the aim of managing the crisis and reducing regional tensions, according to Tasnim. UKMTO has received a report of an incident 40NM southeast of Al Mukha, Yemen. The cargo vessel was unmanned at the time of the incident, although the damage has resulted in a complete constructive loss. US TRADE US stocks were somewhat mixed with most major indices marginally higher, although the tech-heavy Nasdaq 100 underperformed, while sectors saw an upward bias with Healthcare outperforming and buoyed by Moderna surging in excess of 165% after a cancer breakthrough drug trial with Merck. Nonetheless, the main story on Wednesday was the US Treasury announcing it is increasing, by at least double, the size of liquidity support buyback operations for longer-dated nominal coupon securities, from the current USD 2bln to at least USD 4bln. Following this update, US Treasury yields fell, particularly in the long end, while the Dollar saw notable pressure. Given this, all G10 FX peers gained vs. the Greenback, with the Swissy outperforming. WTI and Brent eked out slight strength as a US/Iran deal seems no closer, although geopolitical newsflow was light on Wednesday. There was no US data or Fed speak, and the latest FOMC Minutes were largely as expected with few shocks (review below). Precious metals surged on the aforementioned news, while crypto saw a rally through the US session. SPX +0.22% at 7,708, NDX -0.22% at 29,426, DJI +0.22% at 53,468, RUT +0.50% at 3,033. Click here for a detailed summary. TARIFFS/TRADE US President Trump said he had come to a deal with Canada and had a good conversation with Canada's PM Carney, while he added no tariffs going into Canada and that tariffs will be non-existent for farmers, as well as reiterated it is subject to finalisation of documents. USTR Greer said the US has eliminated some of the irritants it had with Canada over the last year. US is reportedly set to halve tariffs on Canadian steel and aluminium in a trade deal. Canadian PM Carney said Canada is moving towards a trade deal with the US and significant progress has been made in talks. Canadian Minister for US trade said the deal will keep the supply management agricultural system intact. NOTABLE HEADLINES US President Trump said he would really like to see rates come down. US President Trump nominated Dr Heidi Overton as next FDA Commissioner. US national debt has surpassed USD 40tln, according to CBS citing Treasury Department data. US Treasury is to at least double the size of liquidity support buyback operations for longer-dated nominal coupon securities, from the current USD 2bln to at least USD 4bln, as of September 9th. FX USD was pressured by a drop in long-end yields in response to the US Treasury announcing plans to increase the size of liquidity support buyback operations for longer-dated nominal coupon securities by at least double. The announcement marks a signal from the US Treasury of a willingness to step in and ease fears over rising long-end yields; however, given the increase only pertains for the remainder of this refunding quarter, further USD weakness may be limited. The initial USD weakness extended throughout the day and held, leaving DXY back at May levels of 98.84. Separately, FOMC Minutes sparked little reaction. The Minutes highlighted what Fedspeak has pointed towards in recent weeks: Most participants assessed higher rates would likely be necessary if inflation did not fall. Meanwhile, Chair Warsh made the case that six scheduled meetings per year instead of eight would allow more information to accumulate between meetings; no final decision was made. EUR was among the top gainers amid the weaker buck, with the single currency gaining a firm footing after breaching through the 1.1600 level. GBP benefitted from the dollar's demise, while the latest inflation data was somewhat mixed as the headline printed in line with forecasts and with Core CPI firmer-than-expected. JPY strengthened amid the fall in US yields, with USD/JPY sliding beneath the 159.00 handle. FIXED INCOME T-notes settled higher and the yield curve flattened after Treasury boosts long-end buybacks. COMMODITIES Oil prices saw slight gains on Wednesday in light of geopolitical newsflow. US EIA Crude Oil Stocks Change (Aug/14) 4.405M vs. Exp. -0.6M (Prev. 17.422M) US military has quietly established a shipping corridor in and out of the Strait of Hormuz to transport millions of barrels of oil each day, according to Axios citing two US officials. The officials said about 10mln barrels of oil a day are being transported out of the strait and injected into the global energy market, while the operation was made possible by a recent two-week US Central Command military campaign that degraded Iran's radar and maritime surveillance systems. Iraqi Parliament speaker called for special status for Iraqi oil exports via Hormuz in a meeting with Iran's Ghalibaf. Russian Deputy PM Novak said Russia has started to import fuel, but also stated that they expect a number of oil refineries will soon be completed with maintenance, and the situation will improve significantly. Fuel stations in Moscow have introduced restrictions for gasoline sales, according to reports, citing customer hotlines. GEOPOLITICAL RUSSIA-UKRAINE Russian Defence Ministry said a dry cargo ship carrying Ukrainian weapons and equipment was damaged in the port of Chernomorsk, according to IFX. OTHER US President Trump said he gets along well with North Korean leader Kim Jong Un and that he is going to be fine. North Korea leader Kim’s sister said there is no interest at all in the US' decision to cut joint military drills with South Korea, while it was also stated that the relationship between US President Trump and Leader Kim is truly excellent, according to KCNA. Chinese Foreign Minister Wang Yi said the US should change its policy towards North Korea. ASIA-PAC NOTABLE HEADLINES US President Trump said on Chinese President Xi’s visit that they will probably talk about AI. China’s government said no entity should assist in the implementation of the EU anti-subsidy probe, and that the EU probe into JD.com is improper, according to state TV. RBI Governor Malhotra said India's economy is expected to remain resilient, and inflation expectations have edged up slightly but remain within a controllable range, while he expects inflation to peak in Q3 and then ease. Furthermore, he said there are signs that previously moderate inflation is beginning to normalise and is more inclined to wait for greater certainty in the inflation trajectory before adjusting policy rates. EU/UK NOTABLE HEADLINES ECB President Lagarde's speech on Europe’s economic challenges and growth model stated that growth continued in 2026 despite the energy shock, with domestic demand contributing positively to the quarter-on-quarter growth of 0.4% in the second quarter of 2026. She also noted that domestic demand is projected to remain the main source of growth for the euro area this year. ECB's Rehn said wage growth and the outlook remain moderate, while there are no clear signs of second-round effects, and keeping inflation expectations anchored is essential. DATA RECAP UK CPI (Jul YY) 2.9% vs. Exp. 2.9% (Prev. 2.6%); CPI services 3.4% (Prev. 3.6%) UK Core CPI (Jul YY) 2.6% vs. Exp. 2.5% (Prev. 2.6%) European HICP Final (Jul YY) 2.9% vs. Exp. 2.9% (Prev. 2.8%) European Core HICP Final (Jul YY) 2.5% vs. Exp. 2.5% (Prev. 2.4%)