英伟达财报在即，美伊谈判压低油价，美加贸易战升级

Good morning. Everybody is Wednesday. It's August the 26th and here is what is on our agenda. Oil and gas prices are dropping as Iran and Oman discuss a maritime corridor through the strait. Nvidia earnings take center stage as we continue to chart the AI industry's massive data center expansion, and the U.S. is considering even more tariffs on Canada as the trade war spirals. European futures pointing modestly higher by about a 10th of those risk events, of course, being factored in by investors gains of 3/10 by the close yesterday.

So building on that very modestly today does seem to be a bit of a disinflation trade or theme, at least in the last few hours. And we'll see if that continues. China pointing out, of course, the drop in the oil price currently down 1.8% on Brent at just shy of $87 a barrel. Eurodollar interesting at 116, just a little softer by a 10th of a percent. Despite the fact that Isabelle Schnabel has come out and said rates need to be high, that is already effectively priced in for September, she's known to be hawkish, so we continue to watch the single currency current at 116.

The countdown to that bitrate starts right now. Welcome back, everybody to the opening trade this Wednesday morning once again. And we're back to focusing on developments in the Middle East. That's one of the agenda items. Of course we've got tech earnings from Nvidia later. We'll get to that certainly. And trade tariffs continue to be topical. But let's start by thinking about where we are on Iran because we do have a slightly weaker oil price.

It was down more than that. It is now an hour or so ago. It's been down by more than 2% in this morning session here in Europe, but now down by 1.8% on Brent. In fact, it's the third day that we're seeing this drop in Brent prices and gas prices also substantially weaker, down as much as 6% in the earlier part of the trading day, now down by 4.4. So we'll watch to see whether this offers any risk. Sentiment boost for European stocks.

The futures are pointing a little bit higher. It isn't helping U.S. futures. It doesn't. Hasn't had that link perhaps in the past, but this is all because we've seen a statement from Iran and Oman saying that they are talking about a framework to resume traffic. It's talking about a temporary joint maritime corridor. Uh, talking about de-mining the Straits as well. I mean, it's all very incremental and just baby steps, according to some analysts, but it does seem to be having at least some downward impact on the oil.

The optimists in the market seeming to think that this may be a bridge to a broader deal that brings in the U.S. and there's all sorts of caveats around that, of course, but that is where at least the optimists seem to be leading, and that is driving oil and gas prices lower. Who'd have thought, though, that at this time this week, after this D-Day on Iran, that Scott Besson, the Treasury Secretary, announced of course, on Monday that this is where we'd be on energy prices, energy prices lower and bonds getting a bid.

And to Scott Benson's credit, the Treasury markets and yields do seem to be capped to some extent. Treasuries are actually outperforming. There's questions and a debate as to whether or not the best input is there at the long end. But inflation is a beneficiary at least is beneficial to the Treasury Secretary and possibly good news as well. We get the PC data later. And then, of course Kevin Walsh and his comments on Friday.

But it does seem to be aligning in a slightly more positive direction for the Treasury sector and arguably the fed chair as well. Right? Yes. As we move towards what Kevin Walsh later in the week. That is interesting. Maybe there's a difference between their perspectives here, but it is interesting, as you say, that there does seem to be this reflection of absent pushing the markets. Is this acting as a bit of a backstop at the long end of the curve in the US as it outperforms, as you say, the rest of the world?

But fundamentally, is this all driven by the deficit? And fundamentally, if you want people to focus on the fundamentals, do you don't have to take some action on the deficit. And maybe that's the view of some of the guests that we can speak to today on this subject. We'll get into that. We've heard from Thomas banking at the fed, and he's agreeing with some of the sentiments that we've that we've heard from them, from those who are alarmed by the extent of the debt in the US?

Say, you know, it's okay for now, but it's it's okay for as long as it's okay. And then at some point it's not okay. There could be, in his words, a reckoning. He's asked about what this what this what this high level of debt could mean. Those structural issues are still there. There's still going to be huge issuance by the US Treasury, of course, to fund to fund that deficit. There's also which is coming through, of course, and we've talked about the competition for capital from from the hyperscalers and from other major players in the eye space.

Which brings us to not just a corporate event, but a macro event that is Nvidia. The expectations are that revenue could double around 92 billion USD, earnings per share expected to increase to above $2 per share as well. There's going to be a lot of focus on what Jensen the team have to say about the outlook about the scale up as well in terms of the new chips that they have in the pipeline, and of course, the questions about margin, whether and able to preserve that 75% margin, what they're doing, how they're managing the supply chain, and particularly around high bandwidth memory.

But will they give a convincing case and present the data that suggests that there is continued demand and support most. And the consensus view is that they will how the how the stock reacts on the back of that is a different question, is a different question, and often is a different question, isn't it? But it will all help to illustrate what we know now about return on investment. Saying I is the case. There is the case is easy delivering what it what we expect it to deliver in the time horizons.

We expect it to deliver for the customers of Nvidia. And therefore are they ordering more. We might get some shades of some light shed on that particular subject. The appetite for the hyperscalers continues. It seems fit for these products. Interesting. Paul Olson of Bloomberg Opinion Reflecting on the increase in pricing that we've seen from Nvidia over recent days and and saying they might have that customers for Nvidia might have to make like the Chinese little bit more and get used to having to work around some of the supply chain issues.

And that might, might, might include higher prices. And they could all learn a bit from the from the Chinese about how to maximize what they're spending with companies. Less lessons from China a potentially and certainly it may accelerate the competitive shift as well. We're saying we've had reports. In fact, we've been speaking to the chip czar, the head of OpenAI, talking about the progress they've had there with their own jalapeno chip, and the fact that according to their metrics from the testing, it actually outperforms some of Nvidia's chips on some metrics, particularly around inference, which just a reminder that even a number of customers are building out their own chips, are trying to ensure that they have some ability to diversify.

And what is the life expectancy of the things that Nvidia has produced some five, six years ago? That's also going to be interesting. We'll talk to two, I guess a little later. Clay will be with us from line just to talk about that. Let's talk about tariffs as well Tom, because that is, of course, another subject of conversation that is just not going away in a hurry. And it seems that the latest news lines here is that the from our colleagues in Bloomberg News, the US is readying an increase in tariffs yet again.

That could be a higher rate of ta