• APAC stocks mostly firmer following the Wall St. handover, though China was mixed amid reports of Trump selling NVIDIA chips to China.
• Fed's Collins says she has not made up her mind on December. Treasury Secretary Bessent said prices are getting better.
• DXY contained, EUR/USD bounced from 1.15, Cable rangebound, USD/JPY firmer but limited in holiday trade.
• USTs and Bunds contained after the moves seen on Friday; Crude is uneventful, XAU continues to fade.
• US' Rubio said good progress had been made re. Ukraine, and none of the outstanding issues are insurmountable.
• Looking ahead, highlights include German Ifo (Nov), US National Activity Index (Oct), Dallas Fed Manufacturing Index (Nov), Speakers including ECB’s Cipollone, Elderson & Lagarde, Supply from the US.
• Click for the Newsquawk Week Ahead.

US TRADEEQUITIES

• US stocks rebounded on Friday and were largely supported by surprisingly dovish comments from Fed's Williams, who said that in his view, the Fed can still cut rates in the near term given current policy is modestly restrictive. The comment helped lift stocks and bonds with a dovish repricing in Fed money markets which saw as much as a 62% chance of a 25bps cut, but pared back a couple of bps after the BLS announced the Oct. CPI is cancelled and November CPI will be released after the December FOMC meeting, meaning the Fed will not have access to inflation or labour market data until after the confab.
• SPX +0.98% at 6,603, NDX +0.77% at 24,240, DJI +1.08% at 46,245, RUT +2.80% at 2,370.
• Click here for a detailed summary.

TARIFFS/TRADE

• White House is reportedly preparing a tariff fallback ahead of the court ruling, according to Bloomberg.
• US President Trump’s team was reported on Friday to internally float selling NVIDIA (NVDA) H200 chips to China, according to sources cited by Bloomberg. Trump’s team held internal talks about H200 chip shipments to China in recent days, although the sources stressed no final decision has been made, and it’s entirely possible that the idea remains an internal debate and never results in actual license approvals, which are required under export controls that Washington first imposed in 2022.
• EU plans to tighten foreign investment rules to prevent Chinese firms benefiting from the open market without contributing to local workers or tech transfer, according to FT.
• China welcomed more Italian companies to enter the Chinese market and hopes Italy will provide a fair, transparent, and non-discriminatory business environment for Chinese investment in Italy, according to Xinhua.
• Canadian PM Carney and German Chancellor Merz discussed partnerships in critical minerals, clean energy, AI, aerospace, energy and defence, while Carney also met with French President Macron, and it was stated that the leaders remained focused on key global priorities such as critical minerals, clean energy and AI. Furthermore, Carney said that he and Indian PM Modi launched negotiations for a trade deal that could more than double their trade to USD 70bln and separately commented that they are intensifying free trade negotiations with Mercosur.
• UK abolished its "de minimis" rules, which exclude cheap imports below GBP 135 from paying tariffs, according to a report on Friday by Sky News.

NOTABLE HEADLINES

• Fed’s Collins (2025 voter) said she has not made up her mind about the December rate decision and still sees reasons to be hesitant about a cut, while she added that financial conditions are a tailwind for the economy and that the Fed’s mildly restrictive policy is appropriate.
• US President Trump is expected to announce as early as Monday a general framework to address healthcare costs, proposed legislation would eliminate zero premium subsidies currently offered under the ACA, according to MS NOW. It was later reported that US President Trump is to sign an executive order on Monday at 16:00EST/21:00GMT.
• US President Trump said there is massive crime and rioting in the Chicago loop area, following an incident where 7 people were shot on Friday.
• US Treasury Secretary Bessent said they are seeing prices get better and will see an announcement this week on healthcare costs, while he added that inflation is up because of services, not imported goods. Bessent said he expects some prices to come down in weeks and others in months. Furthermore, he said that Republicans should end the filibuster if Democrats close the government again, while he noted the government shutdown caused a USD 11bln permanent hit to US GDP.
• US President Trump's Department of Government Efficiency has disbanded with eight months left to its mandate.
• US Appeals Court rejected the Trump administration’s bid to expand rapid deportations.
• Texas officials asked the US Supreme Court to allow a pro-Republican electoral map that a lower court blocked.
• JPMorgan Chase (JPM), Citi (C) and Morgan Stanley (MS) are among those that have been notified by SitusAMC that their client data may have been taken, according to NYT.

APAC TRADEEQUITIES

• APAC stocks were mostly positive following last Friday's advances on Wall St, where sentiment was lifted as dovish comments from Fed's Williams rekindled December rate cut hopes, while 'tremendous' progress was said to have been made during Ukraine peace talks in Geneva on Sunday, although conditions were quiet amid a sparse overnight calendar and with Japanese markets closed for Labor Day.
• ASX 200 rallied at the open with outperformance in tech and industrials front running the advances, while there were also some M&A related headlines with Qube surging to a record high on Macquarie Asset Management's fresh AUD 11.6bln takeover proposal. Conversely, BHP shares were indecisive and eventually trickled lower after it was reported to have made a renewed approach for Anglo American, which was rejected, prompting BHP to abandon its pursuit again.
• Hang Seng and Shanghai Comp Chinese markets are mixed with gains led by tech strength, although semiconductor names are pressured, including SMIC, following a report on Friday that US President Trump’s team was internally floating selling NVIDIA H200 chips to China.
• US equity futures extended on Friday's gains with the help of trade and geopolitical optimism, as well as rate cut hopes.
• European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 0.9% after the cash market closed with losses of 1.0% on Friday.

FX

• DXY traded little changed amid the lack of major catalysts stateside and as the dovish rhetoric last Friday from Fed's Williams was offset by remarks from Fed’s Collins, who said she has not made up her mind about the December rate decision and still sees reasons to be hesitant about a cut, as well as noted that the Fed’s mildly restrictive policy is appropriate.
• EUR/USD returned to flat territory after bouncing off a floor near the 1.1500 level ahead of several ECB speakers.
• GBP/USD price action was kept within tight parameters as the pair eyed a retest of the 1.3100 level to the upside, while the focus in the UK this week is on Chancellor Reeves's Budget announcement due on Wednesday.
• USD/JPY marginally edged higher alongside the mostly positive risk appetite in Asia-Pac, but with further upside contained amid the absence of Japanese participants for a holiday.
• Antipodeans were rangebound with NZD slightly lagging against its trans-Tasman counterpart ahead of a widely expected 25bps rate cut by the RBNZ at its meeting on Wednesday.
• PBoC set USD/CNY mid-point at 7.0847 vs exp. 7.1162 (Prev. 7.0875).
• SNB President Schlegel said uncertainty is poison for the economy and that 15% tariffs are better than 39% for Switzerland, while he added that Switzerland still has a lot of gold on an international basis.

FIXED INCOME

• 10yr UST futures took a breather and held onto last Friday's gains after dovish comments by Fed's Williams stoked Fed rate cut hopes, while price action was contained with overnight cash treasuries trade shut due to Labor Day in Japan.
• Bund futures traded little changed ahead of German Ifo data and several ECB speakers, while ECB's Lagarde pushed back against recent suggestions that the ECB should relaunch large-scale asset purchases, in which she stated that monetary policy cannot solve debt problems.

COMMODITIES

• Crude futures were uneventful with price action contained amid a lack of major energy-related newsflow and following Ukraine peace talks in Geneva on Sunday, which US Secretary of State Rubio said made tremendous progress.
• World oil majors are returning to Libya as they hunt for new energy reserves and with Tripoli launching its first exploration auction in 18 years, according to FT.
• Spot gold continued its retreat from resistance at the USD 4,100/oz level with demand sapped amid the mostly positive risk appetite in the Asia-Pac region.
• Copper futures traded rangebound near the USD 5.00/lb level following last Friday's risk-fuelled rebound.

CRYPTO

• Bitcoin was choppy overnight and traded on both sides of the USD 87k level.

NOTABLE ASIA-PAC HEADLINES

• BoJ board member Masu said on Friday that the BoJ is 'close' to the decision to raise rates but can't say which month. Masu stated it is not good for real interest rates to be deeply negative and that Japan's policy rate is lower than the neutral rate, which he strongly believes they need to change quickly, while he said they won't wait until after the Spring wage talks to end in raising rates.
• Japan is said to be open to intervening in the currency market “to mitigate the side effects of a weak yen,” according to a government panel member.
• New Zealand PM Luxon vowed to increase the pension saving scheme, according to Bloomberg.

GEOPOLITICS

MIDDLE EAST

• Israel’s military said it killed a Hamas commander in Gaza City, while the Israeli military confirmed that Hezbollah military leader Ali Tabtabai was killed in an Israeli strike in southern Beirut.
• Canadian PM Carney and German Chancellor Merz discussed the situation in the Middle East and noted their support for the comprehensive peace plan to end the war in Gaza, while they reaffirmed support for Ukraine and underscored that any settlement must include Ukraine’s involvement.

RUSSIA-UKRAINE

• Ukrainian President Zelensky said they are grateful for all efforts by US President Trump and the US to end the war. Zelensky said they also thank Europe, the G7 and the G20 for helping them protect lives, while they are working on every point and every step to achieve peace. Zelensky also commented that there are signals that the US team is hearing them.
• US President Trump said ‘no’ when asked if his offer is the final one for Ukraine. Trump separately commented that the Ukrainian leadership has expressed zero gratitude for our efforts and that Europe continues to buy oil from Russia.
• US Secretary of State Rubio said we’ve had the most productive and meaningful meeting so far and made good progress. Rubio said there is still some work left to do, and their teams will revert on Sunday night with more updates, while Rubio added this will have to be signed off by their presidents, but he is comfortable about that. Rubio later commented that they made a tremendous amount of progress and have a foundational document, while they were able to narrow down the points of the plan, but added that work remains to be done. Furthermore, he said they are much further ahead than when they began on Sunday morning and noted there are some outstanding issues involving the role of the EU and NATO, but stated that none of the outstanding issues are insurmountable.
• US official said that talks between US and Ukrainian officials so far have been productive and even conclusive in some areas, while it was also reported that US and Ukrainian officials were discussing a possible trip by Ukrainian President Zelensky to Washington to discuss the peace plan, possibly this week, according to sources cited by Reuters.
• European leaders’ summit on Ukraine stated that they believe the US 28-point peace plan required additional work and they are concerned by proposed limitations on Ukraine’s armed forces, while they are clear on the principle that Ukraine’s borders must not be changed by force.
• European counterproposal to the US’s Ukraine peace plan proposes that the Ukrainian military be capped at 800,000 in peacetime and stated that Ukraine joining NATO depends on the consensus of NATO members, which does not exist, while NATO agrees not to permanently station troops under its command in Ukraine in peacetime. The counterproposal also stated that NATO jets will be stationed in Poland and Ukraine will receive a US guarantee that mirrors NATO’s Article 5, as well as noted that Ukraine will be compensated financially, including through Russian sovereign assets that will remain frozen until Russia compensates for damage to Ukraine. Furthermore, Ukraine commits not to recover its occupied sovereign territory through military means, while negotiations on territorial swaps will start from the line of contact, and Ukraine will hold elections as soon as possible after the signing of the peace agreement.
• White House readout stated there was an extensive and productive meeting with the Ukrainian delegation, while it added that the Ukrainian delegation affirmed all of their principal concerns and believes the current draft reflects their national interests. Furthermore, it stated Ukrainians underscored that the strengthened security guarantee architecture meaningfully addresses their core strategic requirements and they agreed to continue consultations as the agreements move toward final refinement.
• Nordic-Baltic Eight Leaders’ joint statement noted that they spoke with Ukrainian President Zelensky and stated that Russia has so far not committed to a ceasefire or any steps leading to peace, while they will continue to arm Ukraine and strengthen Europe’s defence to deter further Russian aggression.
• Russia’s Ryabkov said regarding chances of another Trump-Putin meeting that the issue is on the agenda and nothing can be ruled out, while he added that progress in building dialogue between Russia and the US is impressive and that contacts are yielding results.
• Russia’s Defence Ministry said Russian forces took control of Petrivske in Ukraine’s Donetsk and took control of the Tikhe and Odradne regions in eastern Ukraine, according to TASS. It was also reported that Russian forces captured Nove Zaporizhzhia and Zvanivka in eastern Ukraine, according to RIA.
• Ukrainian drones struck a heat and electricity station in Moscow region’s Shatura, which caused a fire.

OTHER

• Chinese Foreign Minister Wang said China urges Japan to reflect on and correct mistakes as soon as possible and not become obsessed, while he added that Japan’s leader sent a wrong signal of trying to intervene in the Taiwan issue by force and crossed the red line that should not be touched. Wang also said that if Japan continues down this path, countries have the right to re-examine Japan’s historical crimes. It was separately reported that a senior Japanese government spokeswoman said China’s claim that Japan has altered its position is entirely baseless, while Japanese Defence Minister Koizumi said during a visit to the island of Yonaguni in Okinawa that Japan is on track to deploy missiles to the island, which is near Taiwan.
• US is poised to start a new phase of Venezuela-related operations and is weighing options, including to overthrow Venezuela’s government, while covert operations are expected to come first, according to officials cited by Reuters.- Armed bandits kidnapped more than 300 students from a Catholic school in Nigeria on Friday, while it was reported on Sunday that fifty of the kidnapped students have escaped.
• White House said South Africa is refusing to facilitate a smooth transition of the G20 presidency and has weaponised its G20 presidency to undermine the G20’s founding principles.

GLOBAL NEWS

• Brazilian federal police took former president Bolsonaro into custody after being determined a flight risk, according to BBC.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Reeves is expected to further protect those on the national minimum wage at the Budget, according to the UK Treasury. It was also reported that Reeves will freeze rail fares in a cost-of-living push and the US is to extend EV subsidies to blunt the tax increase in the Budget, according to Bloomberg.
• UK Budget’s pensions tax raid to raise over GBP 3bln, while the expected move by Chancellor Reeves in the week ahead faces strong pushback from businesses, while she is preparing to lift the two-child benefit cap in the Budget, according to FT.
• UK and Indonesia agreed on a GBP 4bln maritime deal securing 1,000 jobs in the UK.
• ECB President Lagarde warned against viewing monetary policy as a solution to debt problems, implicitly rejecting recent suggestions from France’s far-right party that the ECB should relaunch large-scale asset purchases, according to Bloomberg.
• Moody’s affirmed the UK at Aa3; Outlook Stable, while it raised Italy’s sovereign rating by one notch from Baa3 to Baa2; Outlook Revised to Stable from Positive.