Squawk Box Europe Express

Private sector jobs in the U.S. grew by almost half a million last month with the labour market showing no signs of abating. Non-farm payroll numbers are out later today. Equites and bonds see a sell-off as investors anticipate the U.S. Federal Reserve to continue its hiking cycle further into the year. The 2-year U.S. Treasury bill hits its highest level in 16 years while Europe’s Stoxx 600 plunges to its steepest one-day drop since March. U.S. Treasury Secretary is in Bejing attempting to thaw difficult trade relations between the world’s two largest economies. An emphasis on healthy competition is top of the agenda. In tech news, Samsung expects a 96 per cent fall in quarterly profit in what would be the Korean electronics giant’s worst performance since 2009. Hydrogen firm Thyssenkrupp Nucera is due to list on the Frankfurt stock exchange in what will be one of Europe’s largest IPOs this year. Nucera shares are priced at €20 providing the company with a market cap of €2.5bn.See Privacy Policy at https://a

U.S. markets are slightly down after June’s FOMC minutes indicated that more rate hikes are on the way despite the Fed opting to pause last month. Asian equities mirror the losses Stateside. U.S. Treasury Secretary, Janet Yellen, is due to visit China but tensions have been ramped up as Beijing warns that export restrictions on no chip raw materials are ‘just a start’. We are live in Vienna at the Opec seminar where the CEOs of TotalEnergies and Saudi Aramco tells CNBC that the oil sector remains robust despite recent signs of faltering demand. In IPO news, ThyssenKrupp’s hydrogen arm is set to list in Frankfurt valued at €2.5bn while Romanian energy firm Hidroelectrica is to go public on the Bucharest Stock Exchange next week and will be Europe’s biggest IPO of 2023 so far. Meta’s social media platform Threads goes live, earning 5 million subscribers within its first 4 hours.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-i

The Chinese post-Covid recovery continues to stutter with services activity growing at its slowest pace in five months. Meanwhile, Beijing has said it will no longer exploit its own rare material resources only to be subject to U.S. restrictions in producing semi-conductors. Tesla and BYD both post record Q2 deliveries as the EV race in China gathers momentum. We are live in Vienna for the Opec Seminar where despite Russian and Saudi Arabian production cuts to come, a price rally has failed to materialise. Brent pulls back as concerns over a Chinese slowdown and higher rates mount. And U.S. markets are back online today following yesterday’s 4th July celebrations as investors await the latest Fed minutes over its decision to pause its rate hiking cycle.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. indices start H2 positively ahead of today’s 4th July holiday. Meanwhile the RBA’s hiking cycle pause has buoyed investor sentiment in Asia. In tech news, China imposes export controls on vital rare materials gallium and germanium which are used in semi-conductor production. The move is seen to be in retaliation against Western chip curbs on Beijing. Russian and Saudi oil cuts fail to sustain a crude rally as recession fears and the Chinese slowdown continue to hamper demand. Social media giant Meta unveils Threads to rival Twitter. The platform is set to go live on Thursday.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Asian markets begin H2 in the green with strong business sentiment in Japan outweighing slowing factory activity in China. U.S. equities end the first half of the year in very positive territory. The Nasdaq surges more than 30 per cent to close its best H1 in 40 years. Apple closes Friday’s session as the world’s first-ever $3tn company. In autos news, Tesla boasts of record production numbers in Q2 while deliveries are up by 83 per cent on the year with CEO Elon Musk’s move to cut prices appearing to have worked. And France suffers a sixth night of nationwide violence following the police shooting of a 17-year-old. President Emmanuel Macron has postponed a long-planned state visit to Germany in a bid to quell the unrest.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Nasdaq is on track for its best H1 in 40 years with A.I. demand fuelling tech stocks. China’s post-Covid recovery, however, continues to stutter with factory activity contracting for a third consecutive month. EU leaders meet in Brussels and make pledges to shore up military and financial aid to Ukraine in the wake of last week’s attempted Wagner Group mutiny in Russia. In retail news, U.S. sportswear giant Nike reports its first quarterly miss in three years. And there are signs of a thaw in the IPO market as shares in the U.S. thrift store chain Savers Value Village jump on the Wall Street debut. Online Chinese fashion brand Shein is also reportedly eyeing a New York listing later this year. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The world’s top central bankers meet at the ECB annual forum in Sintra, Portugal and stand firm on further rate hikes. U.S. Federal Reserve Chairman Jerome Powell says restrictive policies have not been restrictive for long enough to rein in inflation. ECB President Christine Lagarde tells CNBC that more hikes remain a prospect and that the central bank requires more time to assess its previous moves. U.S. markets are flat on the comments coming from Sintra but Apple stands out closing close to a record $3tn market cap. The main U.S. banks easily pass the Federal Reserve’s stress tests but concerns remain about the health of smaller regional lenders. In tech news, Micron beats Q3 earnings expectations on soaring A.I. demand and supply bottlenecks clearing.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

ECB officials attending the central bank’s annual forum in Sintra have played down talk of rate cuts. We hear from ECB chief economist Philip Lane who says the bank must remain data-dependent when making rate decisions. U.S. housing and consumer data shows resilience but Chinese industrial further declines by double digits. On Wall Street, the Dow breaks a six-session losing streak to stay on track to record its best month since November. Resurgent tech stocks have pushed the Nasdaq towards its best H1 for forty years. In banking news, UBS is reportedly ready to cut Credit Suisse staff by half starting next month.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Russian President Vladimir Putin makes his first public remarks since the abandoned coup by the PMC Wagner Group at the weekend. Chinese Premier Li Qiang addresses the ‘Summer Davos’ in Tianjin, calling form more foreign direct investment and warns against global economic fragmentation. We are live in Sintra, Portugal for the ECB’s annual summit where the Bank of Lithuania governor Gediminas Šimkus tells us the there is some way to go for the current rate-hiking cycle. In the U.S., the Dow sees its longest losing streak since September last year. Investors have profited on well performing tech stocks. The VIX hits its lowest level since before the pandemic.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Russian President Vladimir Putin’s grip on power is severely tested over the weekend after the private military company Wagner Group marches on Moscow before performing an abrupt u-turn. Asian equities remain sanguine despite the tumult as the Wall Stret rally recedes. Oil, however, is slightly higher. We are live at the first ‘summer’ Davos in Tianjin since the Covid pandemic. And in Greece, Kyriakos Mitsotakis’s New Democracy party secures a landslide victory, winning enough parliamentary seats to govern outright.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Tech stocks u-turn on Wall Street but the Nasdaq is on course for its worst run since April. The Bank of England raised rates by 50bps but Governor Andrew Bailey played down fears of a looming UK recession. Siemens Energy shares fall sharply lower after it scrapped its FY outlook upon discovering further technical problems within its turbine unit Gamesa. The company warns it now faces costs of €1bn. The White House welcomes Indian Prime Minister Narendra Modi and unveils a slew of new partnership deals between Washington and New Delhi.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The S&P 500 records its worst session this month while short positions on U.S. shares hit their highest level in more than a year. U.S. Federal Reserve Chairman Jerome Powell tells the House Financial Services Committee that efforts to rein in inflation are far from over. The Bank of England faces pressure do the same after a shock inflation print sends two-year gilts surging to a 15-year high. In the wake of the collapse of Credit Suisse, the SNB has called for more robust capital buffers and a framework to stabilise or wind down important lenders. And in retail news, the FTC sues Amazon, accusing it of duping customers into subscribing to its Prime service without their consent.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The recent U.S. equities rally runs out of steam as investors lock in profits and mull the rates forecast before Fed Chair Jerome Powell testifies in front of Congress later this week. UK Chancellor of the Exchequer Jeremy Hunt rules out offering government mortgage relief as he meets with bank chiefs to discuss spiralling repayments. Softbank CEO Masayoshi Son makes bullish comments about potential A.I. benefits, shifting the company to an offensive position. Deutsche Post DHL CEO plays down concerns about de-globalisation, telling CNBC that reliance on China is very entrenched and hard to replace. And we are live in North Greenwich, London at the Ukraine Recovery Conference where Rishi Sunak is set to unveil a major new support package to Kyiv.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

China slashes two more key lending benchmarks for the first time in 10 months as the PBOC attempts to stimulate a stuttering economy. In a sign of potentially easing tensions between the U.S. and China, Secretary of State Antony Blinken meets with President Xi Jinping in Beijing and calls for further dialogue. In tech news, Intel signs off on a €30bn chip manufacturing factory in Germany, making it the largest FDI in the country. Chancellor Olaf Scholz has highlighted the need to de-risk from China. And Airbus inks the largest commercial aviation deal ever, selling 500 single-aisle planes to Indian budget airline Indigo.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. Secretary of State Antony Blinken arrives in China and holds “candid and constructive” talks with his counterpart Wang Yi. It’s the first visit of an American cabinet-level official for five years. Meanwhile, Goldman Sachs downgrades its FY GDP forecast for China. It quoted Beijing’s limited ability to boost stimulus. Asian equities start the week in the red as a result despite scoring their best weekly run in five months. AstraZeneca seeks to spin off its Chinese unit and to list separately in either Hong Kong or Shanghai as growing geo-political tensions pushes the pharma giant to seek a safe haven. And after a four-year pandemic hiatus, we are live at the Paris Airshow where Airbus and Boeing vie for new orders.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

All three major U.S. indices hit historically high averages ending the session more than 1 per cent in the green. The BoJ sticks to its guns and maintains negative rates despite inflation moving higher. The Nikkei is up in afternoon trade while the yen drops against the dollar. In Frankfurt, ECB President Christine Lagarde hikes euro zone rates to a 22-year high. Lagarde said there was no sign that the hiking cycle could be paused beyond the summer. European leaders attempt to woo the next Tesla gigafactory with CEO Elon Musk meeting with Italian Prime Minister Georgia Meloni before attending the Vivatech conference in Paris later today. And on Wall Street, restaurant chain Cava sees shares surge 100 per cent following its IPO.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Fed makes a hawkish pause but Chairman Jerome Powell warns of two more rate rises later this year in a bid to balance market expectations. The rate decision pushes the S&P 500 and Nasdaq off 13-month highs while U.S. treasuries waver. Bond king Jeffrey Gundlach tells CNBC that the Fed strategy remains flawed and delayed. The PBOC cuts a key policy rate which sees the yuan fall to a six-month low. The ECB is now set to hike rates yet again as inflation hovers above 6 per cent. And we are live at Vivatech in Paris where French President Emmanuel Macron tells us that countries must work together to draft coordinated regulation regarding A.I.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. inflation drops to its lowest level since in 2021 with investors anticipating a pause in rate hikes from the Fed. The S&P 500 and the Nasdaq respond by hitting 13-month highs and U.S. Treasuries yields also rise on investor optimism the hiking cycle may be coming to a close. In the UK, stronger-than-expected jobs data push short-term gilt yields to levels not seen since last year’s chaotic mini-budget. BoE governor Andrew Bailey admits that inflation in Britain is more stubborn than first thought. In tech news, chip maker AMD makes inroads into A.I., creating a new semi-conductor while Nvidia closes the session with a $1tn valuation for the first time ever – the seventh U.S firm to do so. We are live at Vivatech in Paris which is President Emmanuel Macron’s annual pitch to increase tech investment in France.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The S&P 500 closes at its highest level since April 2022 as investors anticipate a Fed rate hike pause later this week. Bank of America CEO Brian Moynihan tells our U.S. colleagues that the central bank cannot yet signal the end of the tightening cycle. In China, the PBOC cuts a key short-term policy for the first time in 10 months as its post-Covid recovery stutters and crude prices are impacted as a result. Intel is reportedly set to be an anchor investor in Arm’s Wall Street listing. The chip designer aims to raise $8-10bn later this year. Also in tech news, Oracle shares reach a record high after the company beats Q4 estimates. The FTC seeks to block Microsoft’s proposed $68.7bn deal for Activision over fears it may withhold or degrade the company’s games on rival platforms.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The S&P 500 enjoys its fourth straight week in the green ahead of this week’s Fed rate decision. The FOMC is expected to pause its hikes in order to assess ten consecutive interest rate increases. UBS completes its takeover of Credit Suisse marking a new historic chapter for the banking behemoth. In oil news, WTI slides below the pivotal $70-mark as demand concerns continue to grow. Saudi Arabian energy minister, Abdulaziz Bin Salman tells CNBC he is working within a difficult environment. Spain’s left-wing parties strike a last-minute deal to merge in next month’s general elections which could prove to be a boon for Socialist Prime Minister Pedro Sanchez.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.