Newsquawk Daily European Opening News - 26th August 2026

Crude futures extended their declines after falling around 5% yesterday as geopolitical developments appeared more constructive. Iran's Deputy Foreign Minister said US minesweepers are very good targets if they enter the region. APAC stocks were mostly in the green following the gains on Wall Street, where sentiment was underpinned amid Strait of Hormuz optimism, lower oil prices and a drop in yields. US equity futures were indecisive following recent gains and as participants brace for NVIDIA earnings; European equity futures indicate a mildly positive open. AUD/USD outperformance was seen following firmer-than-expected monthly inflation data, which remained above the RBA's 2%-3% price target. Looking ahead, highlights include US Durable Goods (Jul), PCE (Jul), GDP 2nd (Q2), Atlanta Fed GDP (Q3). Comments from ECB’s Cipollone. Supply from Germany, Italy and the US. Earnings from NVIDIA, Salesforce & CrowdStrike. STOCKS Nikkei 225 +0.7% ASX 200 -0.3% Hang Seng +0.6% Shanghai Comp +0.5% Euro Stoxx 50 Sep'26 +0.1% DAX Sep'26 U/C ES Sep'26 -0.1% NQ Sep'26 -0.1% FX DXY +0.1% (98.94) EUR/USD -0.1% (1.1664) USD/JPY -0.1% (159.01) GBP/USD -0.1% (1.3634) BONDS US T-Note Sep'26 -1 tick Bund Sep'26 +19 ticks US 10yr Yield 4.65% German 10yr Yield 3.18% ENERGY & METALS WTI Oct'26 -2.0% Brent Nov'26 -1.9% Spot Gold -0.3% LME Copper +0.7% CRYPTO Bitcoin +0.4% Ethereum +0.6% As of 06:20BST/01:20EDT LOOKING AHEAD Highlights include US Durable Goods (Jul), PCE (Jul), GDP 2nd (Q2), Atlanta Fed GDP (Q3). Comments from ECB’s Cipollone. Supply from Germany, Italy and the US. Earnings from NVIDIA, Salesforce & CrowdStrike. Click for the Newsquawk Week Ahead. IRAN CONFLICT US Secretary of State Rubio told foreign counterparts the US is shifting from strikes to sanctions on Iran and that for the time being, the US is not expected to initiate new strikes against Iran, according to a US official and a second source cited by Axios. US officials also said the clearing of mines from most of the waterway, coupled with the fact that more and more tankers have been moving through the southern lane of the strait in recent weeks, significantly reduces Iran's leverage over global energy markets. Two US officials confirmed Trump's announcement and said the US Navy had cleared the Traffic Separation Scheme, the median lane of the Strait between Oman and Iran, according to Axios. A ceasefire between the US and Iran was reportedly agreed upon, which includes free navigation in the Strait of Hormuz and will be announced in days, according to RIA citing Pakistani and Iranian sources. Iranian Foreign Minister Araghchi said Iran's commitment to peace and stability is matched by steadfast diplomacy with neighbours, while he noted that regional solutions were stressed in talks with Pakistani and Omani guests. Furthermore, he commented that a proposed framework for a new corridor, joint mine-clearing, and future management of the Strait of Hormuz is the case in point. Iran's Deputy Foreign Minister Gharibabadi detailed a temporary arrangement between Iran and Oman concerning the Strait of Hormuz, but asserted the reopening of the waterway hinges on realisation of Tehran's demands, according to Press TV. Iran's Deputy Foreign Minister Gharibabadi said an understanding with Oman on the Strait of Hormuz does not mean opening of the Strait of Hormuz and before taking any action to reopen the Strait of Hormuz, the US must fully implement all its violated commitments. He also stated that in the understanding with Oman, the route into the strait is completely at our disposal, and part of the exit route is also in Iranian waters, while the distance between the two routes is not long. Furthermore, he said US minesweepers are very good targets if they enter the region and that if the US goes ahead with its new sanctions against Iran, Iran will divulge new measures against US interests. Iranian official said only Tehran knows Hormuz mine locations, according to Fars News Agency. Iran's missile and drone attacks have inflicted damage on US intelligence posts and surveillance hardware in the Middle East that is more extensive than any destruction US spy agencies have endured and will cost billions of dollars to repair, according to NBC citing people with knowledge of the matter. Joint statement between Oman and Iran on consultations between their Foreign Ministers noted that consultations focused on the importance that both countries attach to resuming safe navigation through the Strait of Hormuz. Iran and Oman outlined a joint proposal for a temporary shipping lane and to launch a demining effort in the Strait of Hormuz, while Iran’s Deputy Foreign Minister said the yet-to-be-finalised deal would see the closure of a UN-authorised shipping channel that follows the coast of Oman, according to CNN. Oman’s Foreign Minister is hopeful they will soon announce a temporary corridor for the Strait of Hormuz and practical arrangements to restore safe navigation. Houthi military leader reaffirmed an "unwavering commitment to our principled and faith-based stance in support of the oppressed Palestinian people and their just cause, which is the cause of the entire nation", while he stated they will spare no effort in supporting the Palestinian people and their resistance fighters until the inevitable divine promise of the fall of the Zionist entity is fulfilled. Israeli forces conducted strikes on targets in multiple areas in southern Lebanon. US TRADE EQUITIES US stocks closed in the green on Tuesday, with the Nasdaq outperforming in a tech-led rally. Crude prices slumped on US-Iran optimism, with a further move lower seen in late trade after Russian press RIA reported that the US and Iran are close to a ceasefire agreement that includes freedom of navigation through the Strait of Hormuz. The report also weighed on the Dollar and supported Treasuries and stocks into the closing bell. However, at the time of writing, there has been no confirmation of the report from other outlets. Sectors were predominantly firmer, with Technology leading the gains, while Energy slumped alongside weaker crude prices. Consumer Discretionary was also pressured by weak Dick's (DKS) guidance, which weighed on peers including Nike (NKE), Lululemon (LULU) and On Holding (ONON). SPX +0.30% at 7,676, NDX +0.64% at 29,209, DJI +0.30% at 53,577, RUT +0.48% at 3,009. Click here for a detailed summary. TARIFFS/TRADE US President Trump's administration is discussing additional trade penalties against Canada after Canada unveiled dollar-for-dollar retaliation, according to Bloomberg. Brazil and the US schedule a meeting for August 31st to discuss tariffs, according to Folha. NOTABLE HEADLINES Fed Discount Rate Minutes stated that directors at 4 of the 12 regional Federal Reserve banks voted to increase the discount rate prior to the July 28-29 FOMC confab. Fed's Barkin (2027 voter) said there will eventually be a reckoning of US debt and that debt will reach a point when investors will stop buying if it continues to rise. Barkin described the July rate decision as a close call and noted that officials will receive another full set of data prior to the next meeting, while he added that the latest trade dispute with Canada was adding to uncertainty regarding how tariffs will affect prices and the economy. APAC TRADE EQUITIES APAC stocks were mostly in the green following the gains on Wall Street, where sentiment was underpinned amid Strait of Hormuz optimism, lower oil prices and a drop in yields, while participants await NVIDIA earnings. ASX 200 traded lower following another deluge of earnings releases and hotter-than-expected CPI data, while Construction Work disappointed with a surprise contraction, feeding into next week's GDP release. Nikkei 225 declined at the open following the firmer-than-expected Services PPI data, but then gradually rebounded and returned to above the 66,000 level. KOSPI saw two-way trade, but ultimately outperformed, with the price moves in the index largely driven by tech heavyweights, which were initially choppy. Hang Seng and Shanghai Comp were underpinned as participants digested a deluge of earnings, and with Alibaba shares supported after its founder Jack Ma bought more than HKD 600mln of the Co.’s Hong Kong-listed shares over two consecutive days, signalling confidence in its long-term AI prospects. US equity futures were indecisive following recent gains and as participants brace for NVIDIA earnings. European equity futures indicate a mildly positive open with Euro Stoxx 50 futures up 0.1% after the cash market closed with gains of 0.1% on Tuesday. FX DXY traded little changed overnight after mildly weakening yesterday amid lower oil prices and yields, as well as trade tensions after Canada announced dollar-for-dollar retaliation to US tariffs, and with the Trump administration said to be discussing additional trade penalties against Canada, while China also denounced 'illegal' US sanctions on Iran and trading partners, as well as vowed to take all necessary measures to safeguard its interests. Nonetheless, price action was quiet overnight with little reaction seen following comments from Fed's Barkin that the July rate decision was a close call and that officials will have another full set of data before the September meeting, while participants look ahead to data including Core PCE. EUR/USD was rangebound after it eked out mild gains yesterday, with price action contained within a thin range after the single currency failed to benefit from a source report that ECB policymakers are ready to raise rates in September to stem side effects of the Iran war. GBP/USD lacked direction following its recent choppy performance amid the absence of any pertinent catalysts for the UK. USD/JPY retreated and dipped beneath the 159.00 handle after the hot Services PPI data from Japan. Antipodeans were mixed with mild outperformance in AUD/USD following firmer-than-expected monthly inflation data, which remained above the RBA's 2%-3% price target. PBoC set USD/CNY mid-point at 6.7829 vs exp. 6.7166 (prev. 6.7852). FIXED INCOME 10yr UST futures took a breather after rallying yesterday as yields slid alongside a drop in oil prices. Bund futures remained underpinned as the recent decline in oil prices eases inflationary pressures, but are off the prior day's highs heading into today's Bund issuances and with a source report noting that ECB policymakers are said to be ready to hike rates next month. 10yr JGB futures faded most of its recent gains with the reversal seen following firmer-than-expected Services PPI data, but with some tailwinds seen after a stronger demand ratio at the enhanced-liquidity auction for long- to super-long JGBs. COMMODITIES Crude futures extended their declines after falling around 5% yesterday as geopolitical developments appeared more constructive following US Treasury Secretary Bessent's underwhelming sanctions and 'Operation Outcast' announcement, as Iran and Oman held consultations focused on the importance of resuming safe navigation through the Strait of Hormuz. There was also a report by Russian press that a ceasefire between the US and Iran has been agreed upon, which includes free navigation in the Strait of Hormuz and will be announced in the coming days, although there was no confirmation of this from any officials and it was not mentioned in any mainstream media outlets. US Weekly Private Inventory Data (bbls): Crude +4.2mln (prev. -0.3mln), Gasoline -3.2mln (prev. +1.1mln), Distillate -0.5mln (prev. -2.8mln), Cushing +1.0mln (prev. -1.4mln). Tanker Trackers highlighted at least fifteen sets of ship-to-ship transfers were taking place in the Gulf of Oman, with 25mln barrels of crude oil counted plus some refined products, while it was stated that the oil originates from almost every country in the region, minus Iran. Spot gold was choppy following the prior day's indecisive performance and with the Fed's preferred inflation gauge scheduled for release later ahead of Fed Chair Warsh's inaugural Jackson Hole keynote address. Copper futures eked mild gains in rangebound trade amid the ultimately positive overnight sentiment. CRYPTO Bitcoin gradually edged higher overnight and returned to above the USD 79,000 level. NOTABLE ASIA-PAC HEADLINES BoJ Governor Ueda will not attend the Jackson Hole meeting, while Board Member Tamura is to attend on Ueda's behalf. DATA RECAP Japanese Services PPI YY (Jul) 3.6% vs Exp. 3.2% (Prev. 3.2%, Rev. 3.4%) Australian CPI YY (Jul) 3.5% vs. Exp. 3.3% (Prev. 3.8%) Australian RBA Trimmed Mean CPI YY (Jul) 3.6% vs. Exp. 3.5% (Prev. 3.6%) Australian Construction Work Done QQ (Q2) -2.1% vs. Exp. 0.5% (Prev. 3.4%) GEOPOLITICS MIDDLE EAST Agreement was reached to resolve any dispute diplomatically between Syria and Israel, with the US acting as a guarantor for Turkey, according to Al Hadath citing sources. US President Trump sent a civil nuclear agreement with Saudi Arabia to Congress, while he still insists that the agreement is contingent on Saudi Arabia normalising relations with Israel, according to WSJ. UK PM Burnham is poised to announce “robust” new sanctions on Israeli settlements in the West Bank next month ahead of the Labour conference, according to The Times. RUSSIA-UKRAINE Ukrainian President Zelensky said he is counting on China's strong diplomatic role in ending Russia's war against Ukraine, while he added that peace can be their shared achievement. OTHER US Pacific Command said the US is preparing for Freedom Edge joint exercises with South Korea and Japan, according to Yonhap. An advisor to Russian President Putin said Japan only needs one year to possess a nuclear weapon. China's naval and air forces conducted a routine patrol in the South China Sea on August 21st-25th. EU/UK NOTABLE HEADLINES UK PM Burnham looks at giving mayors in England the authority to suspend the “right to buy” policy and block the sale of council homes, according to FT. ECB policymakers are reportedly ready to raise rates in September to stem side effects of the Iran war, while they have little appetite to signal further tightening, according to sources. ECB's Schnabel said rates must increase further on inflation risks and ECB must prevent second round effects early on. Natural gas situation particularly concerning. Economy looks to be gaining further momentum. Inflation likely to top 2% for extended period.