Treading water ahead of US CPI on Tues

EU mid-market update: Treading water ahead of US CPI on Tues. Historic Putin/Trump meeting confirmed for Friday, Aug 15th in Alaska; Big China's lithium mine halted after permit expired.

Notes/observations

- European bourses opened marginally higher but turned lower as morning progressed; Similar story with US futures; Bitcoin breaks out above $120K.

- In geopolitics, ahead of Putin/Trump meeting on Friday in Alaska, Russia reportedly wants control of Donbas and Crimea, while Europe and Ukraine are preparing a counterproposal for a truce.

- Ahead of tomorrow's expiration of tariffs pause, China's official media has accused Nvidia H20s of having backdoor vulnerabilities; US has started to provide export permits, while China wants to lift export restrictions on chips more broadly. In other news, China is reportedly pressing the Trump administration to ease HBM export restrictions, as high-bandwidth memory is seen as the single biggest constraint on Chinese firms like Huawei developing AI chips at scale.

- UK's Chancellor Reeves considers tax raise possibilities for the Autumn Budget; Studies showed beginning salaries in the UK are at their lowest level since March 2021, and job openings are shrinking at the quickest rate since April.

- For macro data, China's July CPI on Fri was flat, and PPI deflation continues. US CPI tomorrow is focal point for the week.

- Notable Corp News: Orsted shares tanked after Q2 results, affirmed guidance, updated medium term targets and announced DKK 60B rights issue backed by Danish State.

- US lithium names higher premarket after China’s CATL confirmed it halted Yichun Mining operations on Aug 9 after its permit expired, saying it is seeking renewal and expects a “limited” impact, though Yichun supplies over 10% of global lithium carbonate equivalent from lepidolite.

- According to over the weekend review, new GPT-5 delivers median-task gains—faster responses, cleaner tool orchestration, and fewer hallucinations—but sacrifices depth, stylistic range, and user control at the edges, leaving some power users feeling downgraded. Its dynamic router drives efficiency by parallelizing tools and trimming context, yet this same system favors “safe” and concise completions, prunes earlier context, and erases model diversity, prompting a backlash that forced OpenAI to restore GPT-4o for those seeking more verbose, varied, or risk-tolerant outputs.

- Asia closed higher with Nikkei225 outperforming +1.9%. EU indices +0.4% to -0.7%. US futures +0.2% to -0.1%. Gold -1.2%, DXY 0.0%; Commodity: Brent -0.5%, WTI -0.6%; Crypto: BTC +2.8%, ETH +1.2%.

Asia

- Policy makers in China are expected to prioritize the strengthening of equity market stabilization tools during H2 [inline] - China Securities Journal.

- Former US Treasury official Mark Sobel said China should allow 'substantial' yuan appreciation as this would be consistent with the overhaul of China's growth model - US financial press.

- Beijing [local government] eased rules related to home purchases.

Europe

- UK Chancellor Reeves reportedly plans to link tax rises in the Budget with a promise of improved living conditions in the longer term; Reeves sat down with PM Starmer this past week to go through which taxes to increase, a task made harder by the pledge not to increase income tax, employee national insurance or VAT - FT.

- Reportedly JD Vance's hours-long meetings on Saturday in the U.K. produced "significant progress" toward President Trump's goal of ending the war in Ukraine - Axios.

- Poland PM Tusk: Europe remains united in approach to Ukraine peace talks.

Americas

- US Pres Trump: China worried about soybean shortage; Hopes China will quickly quadruple soybean orders from the US. - Truth Social post.

- Nvidia and AMD to pay 15% of China chip sale revenues to the US - FT.

- JPMorgan analysts see, if the Senate confirms Miran before the Sept. 16 FOMC, it could lead to as many as three dissents at that meeting; This increases the likelihood the Fed pulls forward its next 25bps cut to September.

Conflicts/tensions

- Reportedly White House is considering inviting Ukraine Pres Zelenskiy to the Alaska summit; Trump is open to a trilateral meeting in Alaska, but for now White House plans a bilateral summit as requested by Putin - press.

Trade

- Taiwan Cabinet official: Tariff negotiations with US are continuing; Target is for 'better and more reasonable' tariff rates.

- Treasury Sec Bessent: Expects trade issues to be "largely finished by end of October" - Nikkei Asia interview [**Note: late June, Treasury Sec Bessent said they could have trade deals wrapped up by Labor Day (Sept 1st)].

- China wants the US to relax export controls on chips as part of trade deal - FT [update].

- Philippines seeks clarification from US on semiconductor levy - press, citing Special Assistant Frederick Go.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.05% at 546.78, FTSE +0.19% at 9,113.24, DAX -0.54% at 24,063.47, CAC-40 -0.30% at 7,719.39, IBEX-35 -0.68% at 14,740.58, FTSE MIB -0.11% at 41,578.00, SMI +0.35% at 11,908.67, S&P 500 Futures +0.01%].

Market focal points/key themes: European indices open generally higher, but quickly turned around to trade mixed in the early part of the session; markets in holding pattern ahead of risk events later in the week; among sectors leading to the upside are telecom and consumer discretionary; underperforming sectors include industrials and energy; oil & gas subsector under pressure amid optimism of reaching a ceasefire deal in Ukraine war; Norther Data to sell its Peak Mining asset to Elektron Energy; earnings expected in the upcoming America session include Barrick, Dole and Owens & Minor.

Equities

- Consumer discretionary: Plus500 [PLUS.UK] -3.5% (final results; shareholder returns), Aryzta [ARYN.CH] -1.0% (earnings), Marshalls [MSLH.UK] -1.5% (earnings).

- Energy: Orsted [ORSTED.UK] -27.0% (rights issue; earnings; targets update).

- Industrials: Rheinmetall [RHM.DE] -5.5%, Hensoldt [HAGG.DE] -2.0% (Reportedly JD Vance's hours-long meetings on Saturday in the U.K. produced "significant progress" toward President Trump's goal of ending the war in Ukraine).

- Technology: ASML [ASML.NL] +1.0% (Nvidia and AMD to pay 15% of China chip sale revenues to the US), Northern Data [NB2.DE] -17.0% (Rumble confirms 'Intent' to acquire AI Company Northern Data in all-stock deal).

Speakers

-Fed's Bowman (voter, dovish dissenter): Still support three 25 bps cuts this year; Upside risks to price stability have diminished.

-Philippines Central Bank (BSP) Gov Remolona: Believes [inflation] will hit 2.0% in 2025; affirms sees room for at least 1 more interest rate cut in 2025; has to balance inflation risks and growth.

Economic data

-(NO) Norway July CPI M/M: 0.8% v 0.2% prior; Y/Y: 3.3% v 3.0%e (highest annual pace since Feb).

CPI Underlying M/M: 0.8% v 0.5% prior; Y/Y: 3.1% v 3.0%e.

-(NO) Norway July PPI (including oil) M/M: +0.8% v -0.3% prior; Y/Y: -0.3% v -1.0% prior.

-(DK) Denmark June Current Account Balance (DKK): 27.3B v 26.6B prior.

-(DK) Denmark July CPI M/M: 1.5% v 0.2% prior; Y/Y: 2.3% v 1.9% prior.

-(TR) Turkey June Industrial Production M/M: 0.7% v 3.1% prior; Y/Y: 8.3% v 4.9% prior.

-(CZ) Czech June Import Price Index Y/Y: -0.5% v -0.1% prior; Export Price Index Y/Y: -0.1% v +0.3% prior.

-(CH) Swiss Weekly Total Sight Deposits (CHF): 437.1B v 468.5B prior; Domestic Sight Deposits: 437.1B v 439.5B prior.

(IT) Italy Jun Final CPI M/M: 0.4% v 0.4% prelim; Y/Y: 1.7% v 1.7% prelim; CPI EU Harmonized M/M: -1.0% v -1.0% prelim; Y/Y: 1.7% v 1.7% prelim; CPI Index (ex-tobacco): 121.8 v 121.3 prior.

-(IT) Italy June Trade Balance: €5.4B v €6.1B prior; EU Trade Balance: -€0.1B v €0.8B prior.

Fixed income issuance

- Philippines sells total PHP25.0B vs. PHP25.0B indicated in 3-month, 6-month and 12-month bills.

-South Korea MOF sells KRW4.4T vs. KRW4.4T indicated in 3-year Bonds; Avg Yield: 2.415%.

Looking ahead

- 07:00 (ZA) South Africa Jun Manufacturing Production M/M: No est v 2.0% prior; Y/Y: No est v 0.5% prior.

- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 08:00 (IS) Iceland July Unemployment Rate: No est v 3.4% prior.

- 08:00 (MX) Mexico Jun Industrial Production M/M: No est v 0.6% prior; Y/Y: No est v -0.8% prior; Manufacturing Production Y/Y: No est v 0.5% prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 09:00 (RU) Russia Jun Trade Balance: No est v $8.7B prior; Exports: No est v $33.1B prior; Imports: No est v $24.4B prior.

- 09:00 (FR) France Debt Agency (AFT) to sell €B in 3-month, 6-month and 12-month bills.

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

- 16:00 (US) Weekly Crop Progress.

- 19:01 (UK) July BRC LFL Sales Y/Y: No est v 2.7% prior.

- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 90.6 prior.

- 19:50 (JP) Japan July M2 Money Supply Y/Y: No est v 0.9% prior; M3 Money Supply Y/Y: No est v 0.4% prior.

- 20:01 (IE) Ireland July Construction PMI: No est v 48.6 prior.

- 21:30 (AU) Australia July NAB Business Confidence: No est v 5 prior; Business Conditions: No est v 9 prior.