US stocks suffered amid the global stock rout but finished off worst after ISM Services data provided some solace - Newsquawk Asia-Pac Market Open

US stocks suffered firm losses on Monday in a continuation of the selling in the aftermath of last Friday's disappointing jobs data amid economic growth and recession fears, while the weakness also followed on from the market turmoil seen in Asia-Pac bourses which rolled over to the global counterparts. Nonetheless, the major indices on Wall St finished off their worst levels after finding some slight solace from the stronger-than-expected ISM Services report.
USD extended on post-NFP losses as concerns of a recession continued to swell which supported haven currencies, while money markets briefly fully priced a 50bps cut at the September meeting and a Bloomberg report suggested traders are putting a 60% chance of an emergency 25bps rate cut in the next week.
Looking ahead, highlights include Japanese Household Spending & Labour Cash Earnings, Philippines CPI & Trade Data, Australian Building Approvals, RBA Policy Decision & Press Conference, Supply from Japan.

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Highlights include Japanese Household Spending & Labour Cash Earnings, Philippines CPI & Trade Data, Australian Building Approvals, RBA Policy Decision & Press Conference, Supply from Japan.
Click for the Newsquawk Week Ahead.

US TRADE

US stocks suffered firm losses on Monday in a continuation of the selling in the aftermath of last Friday's disappointing jobs data amid economic growth and recession fears, while the weakness also followed on from the market turmoil seen in Asia-Pac bourses which rolled over to the global counterparts. Nonetheless, the major indices on Wall St finished off their worst levels after finding some slight solace from the stronger-than-expected ISM Services report.
SPX -3.0% at 5,186, NDX -3.0% at 17,895, DJIA -2.6% at 38,703, RUT -3.3% at 2,039
Click here for a detailed summary.

NOTABLE HEADLINES

Fed's Goolsbee (2025 voter) said the Fed has been in a restrictive position, while he added you only want to be that restrictive if there is a fear of overheating and that the data does not look like the economy is overheating, according to CNBC.
Fed's SLOOS found a net 7.9% of large and medium banks tightened standards for commercial and industrial loans in Q2 (prev. 15.6% in Q1) and net 0% of large and medium banks reported weaker C&I loan demand in Q2 (prev. 26.6% in Q2).

DATA RECAP

US S&P Global Services PMI Final (Jul) 55.0 (Prev. 56.0)
US S&P Global Comp Final PMI (Jul) 54.3 (Prev. 55.0)
US ISM N-Mfg PMI (Jul) 51.4 vs. Exp. 51.0 (Prev. 48.8)
US ISM N-Mfg Price Paid Idx (Jul) 57.0 (Prev. 56.3)
US ISM N-Mfg Employment Idx (Jul) 51.1 (Prev. 46.1)
US ISM N-Mfg New Orders Idx (Jul) 52.4 (Prev. 47.3)

USD extended on post-NFP losses as concerns of a recession continued to swell which supported haven currencies, while money markets briefly fully priced a 50bps cut at the September meeting and a Bloomberg report suggested traders are putting a 60% chance of an emergency 25bps rate cut in the next week.
EUR benefitted from the dollar weakness and EUR/USD briefly climbed above the 1.1000 level where it met resistance.
GBP softened after failing to sustain a brief reclaim of the 1.2800 status and amid weakness in most activity peers.
JPY strengthened amid the market turmoil during the Asian session although USD/JPY is off today's lows after bouncing off support near the 142.00 level.

T-notes were marginally lower with treasuries eventually mixed across the curve after with price action choppy despite the initial haven bid from continued US growth and recession fears.

Oil prices were lower on Monday but settled well off worst levels amid the global risk-off sentiment and Middle East tensions.
Libya's El Sharara oil field (300k BPD) reportedly fully halted production, according to Bloomberg.

MIDDLE EAST

IDF said it killed Jamal al-Din Jawad who is a leader of the Radwan unit of Hezbollah.
Commander of the Israeli army's Northern Command said the offensive plans against Hezbollah are ready, according to Walla's Elster.
Iranian Foreign Ministry summoned heads of diplomatic missions to confirm the response to Israel, according to Al Arabiya.
Iran claims it doesn’t want regional escalation but must ‘punish’ Israel, according to Times of Israel.
US President Biden's administration informed US lawmakers that Iran’s retaliatory strikes may happen as early as Monday or Tuesday, according to The Washington Post citing sources.
US Secretary of State Blinken spoke to his Egyptian counterpart and Qatar’s PM on Middle East tensions, while Blinken delivered a consistent message to refrain from escalation and calm tensions in the Middle East. Furthermore, Egypt's Foreign Minister called on his Blinken to pressure Israel to seriously engage in ceasefire talks in the Gaza Strip.
White House said the US is working to prevent Iran from attacking Israel.
Hungarian Foreign Minister called the Israeli Foreign Minister on Monday and told him that Iran informed Hungary earlier today that it is going to attack Israel in response to the assassination of Hamas's political bureau chief, according to Barak Ravid.

OTHER

Russia's Security Council Secretary Shoigu will hold a number of meetings including with Iran's President on regional security.
Japan and Mongolia are to agree on defence equipment cooperation and plan to sign a deal as early as this fall with specific exports to be decided through consultation, according to Nikkei citing sources.

NOTABLE HEADLINES

PBoC issued documents on financial support for rural areas and supports agricultural companies to issue financing tools.
PBoC reportedly asked some financial institutions to report daily changes in long-term treasury bond positions and balances, according to Reuters sources who noted that the PBoC did not say why it requested the daily reports.
Japan's Chief Cabinet Secretary Hayashi said they are monitoring financial situations both abroad and domestically with a sense of urgency, while he added it is important for the government to make a judgement on the market calmly.
Taiwan's top financial regulator said they will be asking the stock exchange to come up with necessary measures in the scenario of "irrational" falls within the markets.

DATA RECAP

UK S&P Global Service PMI (Jul) 52.5 vs. Exp. 52.4 (Prev. 52.4)
UK S&P Global PMI Composite (Jul) 52.8 vs. Exp. 52.7 (Prev. 52.7)
German HCOB Services PMI (Jul) 52.5 vs. Exp. 52.0 (Prev. 52.0)
German HCOB Composite Final PMI (Jul) 49.1 vs. Exp. 48.7 (Prev. 48.7)
EU HCOB Services Final PMI (Jul) 51.9 vs. Exp. 51.9 (Prev. 51.9)
EU HCOB Composite Final PMI (Jul) 50.2 vs. Exp. 50.1 (Prev. 50.1)
EU Producer Prices MM (Jun) 0.5% vs. Exp. 0.4% (Prev. -0.2%)
EU Producer Prices YY (Jun) -3.2% vs. Exp. -3.3% (Prev. -4.2%, Rev. -4.1%)
EU Sentix Index (Aug) -13.9 vs. Exp. -8.0 (Prev. -7.3)