• US stocks caught a bid on Friday to atone for the recent rout that saw the S&P 500 enter correction territory the day before, while all major indices posted strong gains and all sectors were in green with outperformance in Tech, Energy and Financials. Furthermore, risk appetite was buoyed overnight with China underpinned by chatter of a PBoC RRR cut, while the strong sentiment continued throughout the US session and there were no fresh trade/tariff updates on Friday to derail the recovery.
• US President Trump ordered the US military to launch ‘decisive and powerful’ military action against Houthis in Yemen and told Iran to end support for Houthis immediately, while the Pentagon said US strikes against Houthis will last days or weeks. Furthermore, it was later reported that the death toll from the US attacks on Yemen reached 53.
• Looking ahead, highlights include Singapore Non-Oil Exports, Chinese House Prices, Industrial Production & Retail Sales.

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LOOKING AHEAD

• Highlights include Singapore Non-Oil Exports, Chinese House Prices, Industrial Production & Retail Sales.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks caught a bid on Friday to atone for the recent rout that saw the S&P 500 enter correction territory the day before, while all major indices posted strong gains and all sectors were in green with outperformance in Tech, Energy and Financials. Furthermore, risk appetite was buoyed overnight with China underpinned by chatter of a PBoC RRR cut, while the strong sentiment continued throughout the US session and there were no fresh trade/tariff updates on Friday to derail the recovery.
• SPX +2.13% at 5,639, NDX +2.49% at 19,705, DJI +1.65% at 41,488, RUT +2.53% at 2,044.
• Click here for a detailed summary.

TARIFFS/TRADE

• US Secretary of State Rubio said they will potentially engage in bilateral negotiations with countries on new trade arrangements once tariffs are imposed.
• Canada’s Defence Minister said they are reconsidering F-35 purchases amid tensions with Washington and are having conversations with other fighter jet makers.

NOTABLE HEADLINES

• US Senate voted 54-46 to pass the stopgap funding bill to keep the government funded through September 30th, while President Trump signed the budget appropriations bill into law.
• US President Trump’s administration was reportedly considering a new travel ban that would impact 43 countries, with a draft plan developed by the State Department several weeks ago.
• US President Trump invoked the Alien Enemies Act against Tren De Aragua which he declared is attempting and threatening invasion against the US, while he said any Venezuelans aged 14 or older who are TDA members and not US citizens or lawful permanent residents are liable to be “apprehended, secured and removed as alien enemies”.

COMMODITIES

• Iraq agreed to double electricity imports from Turkey.

GEOPOLITICAL

MIDDLE EAST

• US President Trump ordered the US military to launch ‘decisive and powerful’ military action against Houthis in Yemen and told Iran to end support for Houthis immediately, while the Pentagon said US strikes against Houthis will last days or weeks. Furthermore, it was later reported that the death toll from the US attacks on Yemen reached 53.
• US Defence Secretary Hegseth said the US campaign will be unrelenting, while he added that Iran has been enabling the Houthis far too long and they better back off.
• US Secretary of State Rubio commented that the US military campaign in Yemen will go on until the Houthis no longer have the capability to strike ships and said there is no way Houthis would have the ability to attack shipping unless they had support from Iran.
• US Secretary of State Rubio spoke with Russian Foreign Minister Lavrov on Saturday and told him about US operations against Houthis, while Lavrov stressed the need for an immediate cessation of the use of force against Yemen Houthis and said it is important for all parties to engage in political dialogue in order to find a solution that avoids further bloodshed.
• Yemen’s Houthis said naval operations will continue until the Gaza blockade is lifted and aid is let in, while the group said it targeted a US aircraft carrier with ballistic missiles and drones in the Red Sea but showed no proof.
• Iranian Revolutionary Guards top commander Salami said Tehran will respond decisively and destructively to any enemy taking threats into action and noted that Yemen’s Houthis take strategic and operational decisions on their own, according to state media.
• Israeli air strike killed nine in Gaza amid ceasefire disputes. It was separately reported that the Israeli PM’s office said Israel is to continue Gaza ceasefire talks in accordance with the US proposal for the immediate release of 11 living hostages and half of the dead. Furthermore, an Israeli delegation was in Egypt discussing hostages with senior Egyptian officials and PM Netanyahu moved to dismiss the head of domestic Shin Bet security services, according to the PM’s office.

RUSSIA-UKRAINE

• Ukrainian President Zelensky said Ukraine’s partners must define a clear position on security guarantees and the path to peace must begin unconditionally, while he added there must be a foreign troop contingent based on Ukraine soil as part of a peacekeeping arrangement and the question of territory is complex and should be discussed later.
• US President Trump said it feels like Russia is going to make a deal with them and stated that they had pretty good news coming out of Russia. Trump also announced that General Kellogg was appointed as Special Envoy to Ukraine and will no longer be an envoy to Russia.
• US envoy Witkoff said differences between Ukraine and Russia have narrowed and they had positive discussions with Russian President Putin, while Witkoff said he expects Trump and Putin to speak this week and that US negotiating teams will meet with Ukrainians this week and will also meet with Russians.
• UK PM Starmer said following a meeting with world leaders that they reaffirmed commitment to Ukraine’s long-term security and agreed that Ukraine must be able to defend itself and deter future Russian aggression, while they agreed military planners would convene again in the UK this week to progress practical plans for how militaries can support Ukraine’s future security. Furthermore, Starmer said they will accelerate military support, tighten sanctions on Russia’s revenues and will continue to explore all lawful routes to ensure that Russia pays for the damage it has done to Ukraine, as well as commented that Putin’s response to the ceasefire proposal is not good enough.
• Russian Defence Ministry said its forces retook control of two settlements in Russia’s Kursk region.

OTHER

• Azerbaijan’s Defence Ministry said Armenian forces opened fire on Azerbaijan’s positions on Sunday, while Armenia’s Defence Ministry said the statement by Azerbaijan does not correspond to reality.
• North Korea condemned the US deployment of additional stealth fighter jets to Japan, according to KCNA.

ASIA-PAC

NOTABLE HEADLINES

• Chinese President Xi reportedly snubbed the EU-China anniversary summit, according to FT.
• China’s State Council released a special action plan to boost domestic consumption which includes measures to increase residents’ income, pensions and wages, as well as establishing a childcare subsidy scheme and increasing revenue from land reform including rural areas.
• PBoC detailed the measures to improve the quality and efficiency of financial services and will grow the financial ecosystem that supports tech innovation, while state media reported that China should choose the right timing and strength for monetary easing.

EU/UK

NOTABLE HEADLINES

• Moody’s raised Greece’s sovereign rating from Ba1 to Baa3: Outlook revised to Stable from Positive and affirmed Spain at A; Outlook Stable. It was also reported that Fitch affirmed France at AA-: Outlook Negative, affirmed Portugal at A-; Outlook Positive, and affirmed Poland at A-: Outlook Stable.