MARKET WRAPS
Watch For:
ECB rate announcement; Germany CPI; trading updates from Currys, Associated British Foods
Opening Call: European stock futures traded mixed early Thursday. Asian stock benchmarks were down; the dollar lost ground; Treasury yields were flat; while oil futures were mixed and gold weakened.
Equities:
Stock futures point to a mixed open in Europe. Iran is increasingly trying to escalate its conflict with the U.S., as it seeks to break a stalemate in the Strait of Hormuz that is strangling its economy.
"This battle will continue," Iran's Islamic Revolutionary Guard Corps said.
In the "air pocket" after earnings season, there's "more appreciation of the conflict, how long it's been going on and what it means if it continues to go on further," said Timothy Chubb, chief investment officer at wealth-management firm Girard.
Forex:
The U.S. Dollar Index could rebound in the near term, as U.S. PPI and CPI data loom, StoneX's Matt Simpson said.
"The stage is set for a potential catalyst, particularly if inflation data surprises to the upside," the senior market analyst said. "With the U.S. Dollar Index having already fallen sharply, even a modest upside surprise in PPI or CPI could provide the excuse for a near-term rebound in" the index, Simpson added.
Bonds:
The European Central Bank's interest-rate decision due later Thursday could do the talking for U.S. markets that has failed to come from Federal Reserve Chairman Kevin Warsh.
Given that the Fed boss has left investors scrabbling for economic clues, the ECB's move could give a steer on how policymakers will respond to a flare-up in inflation.
The ECB is widely expected to raise its key interest rate to 2.5% from 2.25% on Thursday. That would mark the second time Frankfurt has hiked borrowing costs since the war in Iran broke out in late February.
Energy:
The Middle East conflict could exacerbate supply disruptions in the region, with Central Command saying on social media platform X that U.S. forces destroyed 10 Iranian tankers over the past week.
"A senior official from the Islamic republic had said that Iran was ready for a more intense war and will escalate counter strikes if the U.S. continues attacking its territory and infrastructure," ANZ Research analysts said, citing a media report.
Metals:
Gold was steady in early Asian trade, ahead of U.S. data.
There is hope that inflation data will provide some clarity about the Fed's rate path next week, said Peter A. Grant, vice president and senior metals strategist at Zaner Metals. Hot inflation prints could drive more hawkish Fed bets, underpinning the dollar and weighing on gold, he added. Copper strengthened, as supply shortages and tariff fears continued to drive sentiment.
"The market remains on tenterhooks as it awaits the Trump administration's decision on applying a 15% tariff on imports of refined metal," ANZ analysts said. Supply constraints are also propping up prices, as inventories at Shanghai Futures Exchange warehouses have fallen to their lowest level since 2024, the analysts added. Iron ore prices fell, as the metal's fundamentals remain soft, Baocheng Futures analysts said.
The consumption of iron ore has pricked up from low levels, while steel mills are restocking ahead of the holiday, providing some support to demand, they added.
However, persistent weakness in the steel market is limiting the extent of the recovery. Meanwhile, domestic iron ore supply is also rising, they said. High freight rates and preholiday restocking could provide some downside support, but with supply remaining elevated, iron ore prices are likely to remain under pressure, they added.
TODAY'S TOP HEADLINES
Trump's Top Advisers Confront Possibility That Iran War Lasts Through End of Term
WASHINGTON-Top White House advisers have raised privately with President Trump the prospect that the Iran war could drag on through the remainder of his term, U.S. officials said, a message at odds with Trump's public assurances of a swift victory.
In the Oval Office and Situation Room, Vice President JD Vance, Secretary of State Marco Rubio and others have discussed with the president that Tehran could continue to resist U.S. pressure under the blockade and other military tactics, potentially extending the conflict past Inauguration Day in January 2029, the officials said.
A Tiny Shift in the Inflation Rate Could Decide the Fed's Next Move
A single reading of consumer prices Friday morning could determine whether the Federal Reserve raises interest rates next week.
Fed officials have been divided all summer over whether interest rates are high enough to bring inflation down to their 2% goal. Price readings were firmer than expected through the spring before easing in June and July. Friday's consumer-price index report, from the Labor Department, will show whether that improvement marks the turn most officials have been forecasting or another false start for an inflation rate that has run above target for five years.
The ECB Could Tell Markets What Fed's Warsh Won't
The European Central Bank's interest-rate decision Thursday could do the talking for U.S. markets that has failed to come from Federal Reserve Chairman Kevin Warsh.
The Fed boss has left investors scrabbling for economic clues after spending his first summer in charge signaling he wants the central bank to do less talking, by scrapping forward guidance and favoring shorter policy statements. In that information void, the ECB's move could give a steer on how policymakers will respond to a flare-up in inflation.
Bessent's Latest Buyback Move Leaves Investors Wanting More
Treasury Secretary Scott Bessent promised to go big to bring down bond yields. So far, his efforts still aren't big enough.
U.S. government bond yields climbed to fresh multiyear highs on Wednesday after the Treasury Department said it would repurchase up to $6 billion of longer-term debt at a buyback operation on Thursday, disappointing some investors who had thought that a larger amount was possible.
With Close Calls on U.S. Warships, Iran Shows New Appetite for Escalation
Iran is increasingly trying to escalate its conflict with the U.S. as it seeks to break a stalemate in the Strait of Hormuz that is strangling its economy.
At least three times in the past week, Iranian forces have launched missiles at American warships, including an aircraft carrier, taking direct aim at the U.S. Navy in a way it hasn't done since the start of the war. Iran also fired a large missile salvo at U.S. forces stationed in Jordan on Wednesday.
Porsche AG Eyes Wider Margins After $1.2 Billion Sale of Bugatti, Rimac Stakes
Porsche AG said it expects its profitability to get a boost from the nearly $1.2 billion the company netted from its sale of stakes in a venture producing sports-car label Bugatti and in electric-vehicle maker Rimac Group.
The luxury-auto maker on Wednesday completed the sale of its 45% stake in Bugatti Rimac-its joint venture with Rimac housing Bugatti-and its 21% stake in Rimac itself, a deal announced in April this year. The German group, looking to focus on its core business, sold its stakes to a consortium led by U.S.-based investment firm HOF Capital, and which includes Abu Dhabi-based BlueFive Capital as its largest investor.
Star AI Researcher Is Leaving Meta
Andrew Tulloch, the star AI researcher who was offered a pay package worth more than $1 billion to join Meta Platforms last year, is leaving the company, according to people familiar with the situation.
Tulloch's hiring was a coup for Meta and capped a frantic recruiting spree last summer, when Meta threw money at researchers to try to catch up in the race to build artificial intelligence. He had spent 11 years at Meta before leaving in 2023 for OpenAI and then co-founding Thinking Machines Lab.
Write to singaporeeditors@dowjones.com
Expected Major Events for Thursday 04:30/NED: Jul Manufacturing output
05:00/FIN: Jul Industrial Production
06:00/SWE: Jul New orders & deliveries in industry
06:00/SWE: Jul Industrial Production Index
06:00/NOR: Aug CPI
06:00/DEN: Aug CPI
06:00/GER: Aug CPI
07:00/SPN: Jul Industrial Production
07:00/AUT: Jul Production Index
07:00/CZE: Aug CPI
07:00/CZE: Jul Import & export price indices
07:00/TUR: Jul Industrial Production Index
07:00/SVK: Jul Construction production
08:00/BUL: Jul Industrial Production
08:00/ITA: Jul Industrial Production
08:00/EU: Aug Long term interest rates statistics
09:00/CRO: Aug PPI
09:00/GRE: Jul Industrial Production Index
09:00/LUX: Jul Industrial Production
09:00/MLT: Jul Industrial Production Index
10:00/POR: Aug CPI
10:00/FRA: Jul OECD Harmonised Unemployment Rates
10:00/IRL: Aug CPI
11:00/TUR: Turkish interest rate decision
12:15/EU: ECB interest rate announcement
16:59/AUT: Sep OPEC Monthly Oil Market Report
23:01/UK: Aug Scottish Retail Sales Monitor
All times in GMT. Powered by Onclusive and Dow Jones.