Shares flat in Asia before Iran sanctions news, Nvidia results

Asian share markets remained flat on Monday as traders awaited the imminent U.S. sanctions on Iran and Nvidia's upcoming quarterly results, which are eagerly anticipated due to the company's high expectations. The Canadian dollar declined amid looming trade tensions with its southern neighbor. The tech sector remains restless, awaiting Nvidia's results on Wednesday, where investors expect the chip maker to meet the sky-high expectations.

Analysts anticipate Nvidia's quarterly revenue to almost double to around $92 billion and full-year earnings guidance of $103 billion to $105 billion. The Federal Reserve Chairman, Kevin Warsh, will provide insights on U.S. interest rates when he speaks in Jackson Hole, Wyoming, on Friday, though his reluctance to offer forward guidance may lead to disappointment.

Bruce Kasman, JPMorgan's chief economist, noted that past chairmen have shied away from offering forward guidance at the event, urging market participants to expect underwhelming results. Warsh is expected to focus on aspects of his 'regime change' agenda, likely addressing the Federal Reserve's balance sheet reduction and discussing the topic during the September 16 meeting.

The odds of a rate hike around this time stand at around 40%, as markets are priced for a move by December. The odds could shift based on U.S. inflation figures released this week, with median forecasts for core inflation staying at 3.3% in July.

Warsh is poised to face questions about Treasury Secretary Scott Bessent's recent announcement of a potential doubling in bond buybacks to curb rising yields, which has not yielded significant results so far. Yields have climbed to 5.2760%, close to the 19-year peak of 5.3371%. Higher yields make debt more attractive compared to equities, increasing the discount applied to future earnings, highlighting the precarious state of some valuations.

Bessent is scheduled to hold a news conference later on Monday to unveil the sanctions on Iran, whose control over the Strait of Hormuz remains unbroken. Brent oil prices fell 1.0% to $93.43 before the announcement, down from a 6.6% gain the previous week. U.S. crude eased 1.1% to $86.14 a barrel.

Early trade showed equity markets to be quiet, with Japan's Nikkei near flat after a 4% drop last week. South Korean shares slipped 0.8%, while Taiwan dipped 0.5%. MSCI’s Asia-Pacific index outside Japan also lost 0.2%. In Europe, EURO STOXX 50, DAX, and FTSE futures remained steady. On Wall Street, S&P 500 and Nasdaq futures were marginally lower.

In currency markets, the dollar gained 0.1% against the Canadian dollar, reaching 1.3784, after Prime Minister Mark Carney announced Canada's retaliation against U.S. tariffs by imposing levies on various products. The dollar faced pressure as investors feared that increasing U.S. debt and policy uncertainties would erode its purchasing power, driving demand for scarce assets, such as gold.

Gold rose 0.4% to $4,623 an ounce, having increased over 14% this month, marking the largest monthly gain on record if it sustains this momentum throughout August.