US stocks mostly gained as tech and crypto rebounded - Newsquawk Asia-Pac Market Open

• US stocks closed the day mostly in the green with outperformance in the Nasdaq, while Industrials, Tech and Communications outperformed. There were several developments on AI, with OpenAI declaring a "code red" for workers to shift focus to improve ChatGPT in the face of threats from other chatbots. Meanwhile, Amazon (AMZN) announced its new AI chip, which some labelled as rushed but others labelled as a threat to NVIDIA (NVDA). The Amazon AI chip announcement led to downside in US equities, but that later reversed. Aside from AI, focus was on the potential next Fed Chair. US President Trump announced he would name Powell's successor in early 2026, which led to a brief Dollar strength and a flattening of the Treasury curve as participants speculated whether Hassett is still the front-runner. However, Trump later announced he had narrowed his choice down to one, and then referred to Hassett as the "potential" next Fed Chair, which in turn saw the Dollar move to lows while the curve steepened again.
• USD marginally softened but with price action confined to relatively tight parameters amid a quiet calendar, although there were remarks from US President Trump who said he will announce his pick for Fed Chair in early 2026 (was expected by year's end) and referred to NEC Director Hassett as "potential Fed Chair".
• Looking ahead, highlights include South Korean GDP, Australian GDP, Chinese RatingDog Services & Composite PMIs, Supply from Australia.

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LOOKING AHEAD

• Highlights include South Korean GDP, Australian GDP, Chinese RatingDog Services & Composite PMIs, Supply from Australia.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks closed the day mostly in the green with outperformance in the Nasdaq, while Industrials, Tech and Communications outperformed. There were several developments on AI, with OpenAI declaring a "code red" for workers to shift focus to improve ChatGPT in the face of threats from other chatbots. Meanwhile, Amazon (AMZN) announced its new AI chip, which some labelled as rushed but others labelled as a threat to NVIDIA (NVDA). The Amazon AI chip announcement led to downside in US equities, but that later reversed. Aside from AI, focus was on the potential next Fed Chair. US President Trump announced he would name Powell's successor in early 2026, which led to a brief Dollar strength and a flattening of the Treasury curve as participants speculated whether Hassett is still the front-runner. However, Trump later announced he had narrowed his choice down to one, and then referred to Hassett as the "potential" next Fed Chair, which in turn saw the Dollar move to lows while the curve steepened again.
• SPX +0.25% at 6,829, NDX +0.84% at 25,556, DJI +0.39% at 47,474, RUT -0.17% at 2,465.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said they will give refunds out of the tariffs and believes they won't have income tax to pay in the near future.
• US President Trump thanked Chinese President Xi for soybean purchases, while it was separately reported that President Trump said he had a great call with Brazil's President Lula and talked about trade and sanctions.
• Dutch economy minister cancelled a plan to travel to China in December but has "arrangements" with China on a possible visit to discuss Nexperia.
• Switzerland is to tighten rules related to foreign investment, while the review intends to make some deals involving foreign state-controlled firms subject to increased scrutiny, according to Bloomberg citing the Swiss parliament.

NOTABLE HEADLINES

• US President Trump said he will be announcing Fed Chair in early 2026, while he commented that even JPM's Dimon said Powell should reduce rates and reiterated that US Treasury Secretary Bessent doesn't want the job. It was later reported that President Trump said they looked at ten Fed candidates and have it down to one, while he referred to NEC Director Hassett as a potential Fed chair.
• US President Trump to hold the White House meeting with auto executives on Wednesday to announce the rollback of vehicle fuel standards with Ford (F), General Motors (GM), and Stellantis (STLA) to be at the event. It was separately reported that Trump said something is going to happen on health care, but it won't be easy.
• US President Trump said Trump Accounts are to start on 4th July 2026 and that eligible children born in 2025–2028 may receive a USD 1,000 government contribution to jump-start long-term savings.
• US Treasury Secretary Bessent said the US will have low-inflationary growth and that inflation is going to roll next year.

DATA RECAP

• US RCM/TIPP Economic Optimism (Dec) 47.9 (prev. 43.9 M/M)

FX

• USD marginally softened but with price action confined to relatively tight parameters amid a quiet calendar, although there were remarks from US President Trump who said he will announce his pick for Fed Chair in early 2026 (was expected by year's end) and referred to NEC Director Hassett as "potential Fed Chair".
• EUR eked slight gains in choppy trade after rebounding from a brief dip beneath 1.1600, while inflation data was mixed and had little impact on rate expectations.
• GBP was flat on the day amid a lack of major catalysts and after comments from BoE Governor Bailey provided very little incrementally.
• JPY faded some of the previous day's post-Ueda speech spoils and briefly returned to the 156.00 handle amid the positive risk appetite.

FIXED INCOME

• T-notes eked slight gains and the curve steepened in quiet trade, although there were comments from US President Trump who pushed back the Fed Chair announcement to early 2026 and referred to NEC Director Hassett as a potential Fed chair.

COMMODITIES

• Oil prices were mildly lower amid light energy-specific newsflow and as participants awaited the readout from the US-Russia meeting in Moscow.

GEOPOLITICAL

MIDDLE EAST

• Israeli PM Netanyahu said with goodwill and understanding, it is possible to reach an agreement with the Syrians. Netanyahu also stated they are determined to prevent hostile activities against Israel and protect Druze allies, while he expects Syria to establish a demilitarised buffer zone from Damascus to the buffer area.

RUSSIA-UKRAINE

• Russian President Putin said Europeans do not have a peaceful agenda and are on the side of war, while he stated the Europeans seek demands that are not acceptable to Russia and that "if Europe wants to fight war, we are ready now". Putin also commented that Europeans have detached from the talks themselves and noted that attacks on tankers near Turkey are piracy, while he added that they will take measures against tankers of countries that help Ukraine and will increase strikes on facilities and Ukrainian vessels.
• Russia's Kremlin spokesperson Peskov said US Special Envoy Witkoff and Russian President Putin would discuss the understanding reached between the US and Ukraine, while the S-400 and SU-57 fighter jets will be on the agenda.
• Ukrainian President Zelensky said he can see some optimism in the speed of the negotiations and US interest in the process, while he added they don't have alternatives to the use of Russian assets to finance Ukraine. Furthermore, he responded 'yes' when asked if he is afraid that the US might lose interest in the process, and noted the goal of Russia is for the US to withdraw from engagement with Ukraine.
• Ukraine's Foreign Minister said Russian President Putin made statements that demonstrate he does not plan to end the war, and it is time to force Russia to end the war, while a Ukrainian Foreign Ministry spokesman said Ukraine has nothing to do with the attack on a Russia-flagged tanker near Turkey.
• Ukraine's Naftogaz said Russia attacked gas infrastructure on Monday and Tuesday, while it added that gas production and storage facilities came under Russian strikes.
• US President Trump said Ukraine is not an easy situation and commented, "what a mess", while he added that their people are over in Russia right now trying to settle it.
• US Envoy Witkoff is expected to travel from Moscow to a European country and meet Ukrainian President Zelensky, according to Axios's Ravid.
• NATO Secretary General Rutte said NATO elements of a deal to end the war in Ukraine will be dealt with separately and consensus is needed for NATO membership, but currently, there is no consensus.

OTHER

• US President Trump said they still haven't gotten a lot of information and did not know about the second strike on a Venezuelan boat, while Hegseth will have to speak regarding the second boat strike. Trump also commented that if they have to attack drug traffickers on land, they will, and are to start strikes on land, with land strikes much easier, and will start soon. Furthermore, he said any country drug trafficking to the US is subject to attack.
• US War Secretary Hegseth said they've only just begun striking narco traffickers and paused on strikes because it's hard to find boats right now.
• Venezuela's civil aviation authority confirmed receipt of the US request to resume repatriation flights for Venezuelan citizens.
• Colombia’s President said any US attack on its sovereignty would be a declaration of war.

ASIA-PAC

NOTABLE HEADLINES

• UK ministers will delay a decision over whether to approve a Chinese super-embassy in London until January, when PM Starmer is expected to make his first formal visit to Beijing.

EU/UK

NOTABLE HEADLINES

• BoE Governor Bailey said he expects banks to support the economy through lending. Bailey also commented that tech firms do have positive cash flow, unlike the dotcom bubble, but added that not all firms may be long-term winners.
• ECB's Kazaks said a negative shock would make a cut likelier than an equal positive shock would justify a hike. Kazaks said that they just monitor ETS 2 status, as inflation impact is “of significant magnitude” and noted that available data does not “warrant a strong discussion on changing the policy rates”, according to Econostream.
• ECB's Nagel said the German economy could grow by more than a percent in 2027, while he stated the EZ inflation is virtually at target, and likely to fluctuate around it, according to Stern.

DATA RECAP

• EU HICP Flash YY (Nov) 2.2% vs. Exp. 2.1% (Prev. 2.1%)
• EU HICP-X F&E Flash YY (Nov) 2.4% vs. Exp. 2.5% (Prev. 2.4%)
• EU HICP Excluding Food, Energy, Alcohol & Tobacco Flash YY (Nov) 2.40% (Prev. 2.40%)
• EU Unemployment Rate (Oct) 6.4% vs. Exp. 6.3% (Prev. 6.3%, Rev. 6.4%)