Oil jumps on Hormuz strike as Warsh puts a September hike in play

• Asia is trading lower but well off its opening lows. The Nikkei 225 is at 66,174, down 0.35%, having traded as low as roughly 65,030 in the first hour; the Hang Seng is 0.51% weaker at 25,454 and the KOSPI is off 0.28% at 6,770 after a far uglier start. Mainland China is the exception, with the Shanghai Composite up 0.53% at 3,973.
• Wall Street ended Friday soft, the S&P 500 closing 0.25% lower at 7,711.76, the Nasdaq Composite down 0.52% at 26,402 and the Dow essentially unchanged at 53,560. Futures are the only live read on the US day: S&P 500 futures are down 0.19%, Nasdaq 100 futures a fraction firmer at +0.07%.
• Europe finished Friday on the front foot — the DAX up 0.77%, the CAC 40 up 0.98% and the FTSE 100 up 0.29% at 10,824 — but that was before the weekend's events. The London market does not open today.

Two things are driving the tape, and they point the same way for bonds and the dollar.

The first is the Middle East. US forces struck Iranian rocket launchers on Larak Island on Sunday, the first strikes in more than a month, after the launchers were seen being prepared to lay sea mines in the Strait of Hormuz; Iran responded with ballistic and anti-ship missiles at two US bases in Jordan, most of which were reported intercepted. Roughly a fifth of seaborne crude passes through that waterway, so the threat of mining it is a supply story rather than a demand one — hence Brent up 1.66% to $90.79 and WTI up 2.67% to $85.63 while equities sag.

The second is Friday's Jackson Hole speech by Fed chair Kevin Warsh, who said the Fed would 'have work to do' if it could not be confident underlying inflation was heading back to 2%, and noted financial conditions do not look restrictive. Futures markets moved to price a September hike as more likely than not. That is why the front end moved hardest — the five-year yield rose 8.5 basis points to 4.481% against 1.5bp on the 30-year — and why the euro and sterling are both weaker this morning.

Asia's recovery from its lows has no clean explanation beyond the absence of further escalation during the session.

This is a nervy tape rather than a panicked one. The VIX ended Friday at 14.43, marginally lower on the day and nearly 9% below where it sat a week ago; the pressure is showing up in rates instead, with the MOVE index of bond volatility up 1.58% to 71.0. Under the surface Friday was worse than the index level implied: across PrimerIQ's US universe 3,574 names fell against 2,198 that rose, with the average stock down 0.63%. Dispersion was the tell — our median US technology name fell 1.48% and healthcare 1.73%, while consumer defensive names edged up 0.34%. Gold offers little comfort as a haven read: at $4,487 it is barely changed overnight and down 3.2% over five sessions, squeezed by higher yields and a firmer dollar.

There are no UK releases and no London trading today: it is the late summer bank holiday and the London Stock Exchange is closed, so the usual 07:00 wave of ONS data and company results has not happened.

Overnight, China's official manufacturing PMI came in at 49.8 — better than the prior month but still under the 50 line that separates expansion from contraction — and Japanese factory output and retail sales both beat forecasts.

Still to come: German flash CPI for August at 13:00 BST, the first hard read on euro-area inflation before the bloc-wide print tomorrow, and the Chicago PMI at 14:45 BST. Neither is a first-tier number, but with a September Fed move now live, US data carries more weight than usual.

Nothing of consequence reports today. Friday's numbers still set the tone in tech: Marvell beat on both sales and earnings yet fell 10.28% to $216.62, because its fiscal 2028 outlook and the timing of its Google deal disappointed a stock priced for perfection. Elastic jumped 15.01% and Workday 5.76% on their own results, while PayPal's 12.71% slide was not an earnings story at all — a Stripe- and Advent-led consortium walked away from its takeover approach.