Newsquawk European Market Wrap - 22nd July 2026

European bourses gained throughout the session, whilst US equity futures are lower, with underperformance in the NQ. Crude benchmarks gained throughout the day on continued strikes and as President Trump threatens Iranian bridges and power plants. Fleeting strength in the JPY was seen after a Bloomberg report suggested that the BoJ is said to be open to a faster rate hike pace. EQUITIES European bourses were broadly in the green this morning, with outperformance in the FTSE 100 (+1.5%), which benefited from gains across Energy names. The complex was buoyed by continued strength in the crude complex amidst ongoing geopolitical developments (see commodities). European sectors held their positive bias. Basic Resources topped the sector pile, followed by Food, Beverages & Tobacco and Utilities. Technology was the only sector that printed decent losses, while Travel & Leisure and Consumer Products & Services also printed modest losses. US equity futures are entirely in the red, with underperformance in the tech-heavy NQ. However, the bias since the cash open has been upward. Key US movers this morning include Supermicro (+22%, Stellar Q4 prelim GM figure), AT&T (+3.8%, Postpaid phone net adds. topped exp.), GE Vernova (-5.6%, Profit light; Lifted FY26 rev. guidance, but left EBITDA unch.). Ahead focus will be on earnings from Tesla, Alphabet, IBM and others. FX G10s were mostly firmer against the Buck. JPY was helped by BoJ sources early in the session, CAD and NOK boosted in tandem with energy prices while Antipodeans underperformed after recent gains. Geopols remained constructive for the Greenback as oil prices rose on hostile US and Iranian rhetoric, however, the risk tone failed to translate into Buck strength with energy exporters NOK and CAD weighing on it today. USD specific catalysts were absent amid an extremely light data calendar, so focus is set to be on GOOGL earnings due AMC, potentially a report which could give the Buck a bias. JPY moved sharply lower in the London morning, USD/JPY falling 45 pips from recent highs, before paring most of the move. A Bloomberg source report said the BoJ is said to be open to a hike faster than every 6 months, adding the recent JPY weakness is seen as an upside risk to inflation. Despite the initial move lower in USD/JPY, markets seemed inclined to buy dips in the pair, looking to push it towards the 165.00 region where option structures, last week, believed would be the next pain point for the MoF. USD/JPY was a little weaker and at the 163.00 level. GBP/USD lacked direction throughout the domestic session within a roughly 1.3350-1.3390 band, and was little moved following the UK inflation report. In brief; Headline Y/Y cooled at a faster rate than expected, 0.5ppts below BoE’s April MPR fcst.; Services cooled in line with BoE fcst. due to volatile airfares, while core metric stood at 2.6%, in line with BoE fcst. Within the series, one element likely to be welcomed by policymakers is the food component, slowing to its lowest since August 2024, at 1.1ppts below the BoE fcst. Overall, a report which supports the narrative of a BoE unchanged for the remainder of the year. CAD benefitted from energy strength with some strength likely also derived from recent US tariff-related losses. Scotiabank this afternoon noted that while the tariff news brought out some bearish CAD calls, it did not believe the developments represent a significant negative for the CAD at this point - tariff measures only impacting c. 5% of exports, alongside the potential for a US runoff. USD/CAD -0.2%. NOK also gained as oil prices helped the exporter. NOK/SEK was bid throughout the session, the next level above is the June high of 1.013, thereafter, the cross looks to 1.015 not seen since May. USD/NOK -0.5% with the 50DMA below near 9.55. FIXED Global fixed income benchmarks were contained throughout Wednesday's trade, although they traded at the lower end of their narrow ranges given the rise in energy prices and the continued geopolitical newsflow. US President Trump delivered a new threat earlier on, stating that "any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT." Although the initial reaction was modest downside, the majority of the move was later reversed. Gilts (-8 ticks) ended the European session at the bottom end of their 86.23-86.72 range. UK inflation printed broadly positive; headline inflation ticked lower to 2.6% Y/Y (exp. 2.7%, prev. 2.8%), while core inflation held at 2.6% Y/Y (exp. 2.5%). Services inflation also fell to 3.6% Y/Y from 3.8%, while food prices fell for a second consecutive month. ING sees the BoE holding rates throughout 2026, with the trend of lower core service inflation and low private-sector wage growth. Bunds (-16 ticks) were left relatively contained in a 124.32-124.60 range, and looks set to close at the lower end of the range. German debt has offered lower this week, as energy benchmarks continue to climb. EGB investors will be focusing on the ECB rate decision on Thursday, in which rates are expected to remain on hold. On the supply front, Germany tapped its 2041 and 2047 Bunds, which brought in some decent demand; however, no move was seen in Bunds. USTs (-1 tick) rotated in a 108-14 to 108-22+ band, with slight downticks seen as Brent continued to hold above USD 94/bbl. Plenty of block trades throughout the day, with a total of 19.2k ZQQ6 contracts at 96.3. On the supply front, the US is to sell USD 16bln 20yr bonds. The combination of higher outright yields and a solid long-end auction backdrop should support demand. However, elevated geopolitical uncertainty may temper investor participation. Germany sold EUR 1.708bln vs exp. EUR 2bln 2.60% 2041 and 3.40% 2047 Bund. Kuwait to sell USD-denominated 3yr, 5yr and 10yr noted. COMMODITIES Crude – Crude was firmer following several escalatory updates overnight and into the European morning. US CENTCOM confirmed a further night of airstrikes, while Iran retaliated with drone attacks on US-linked targets in the region. Diplomatic progress appeared limited, with Iranian officials downplaying negotiations and reiterating control over the Strait of Hormuz. Disruptions around Bab el-Mandeb and rising shipping costs also underpinned prices. WTI and Brent were higher by over 4% intraday at one point before waning, with WTI notching a USD 84.44–88.41/bbl range and Brent at the upper end of USD 91.31–95.47/bbl. Most recently, President Trump threatened Iran by stating that if Iran shoots at a ship in the Strait of Hormuz, the US will bomb and destroy one bridge or power plant. Modest upticks were seen on the warning, albeit remained within the day’s range. Precious Metals – Precious metals were firmer intraday but off best levels, caught between support from risk and pressure from higher oil prices. Spot gold traded within this morning's USD 4,076–4,141/oz range after topping USD 4,100/oz, while spot silver was more contained within USD 58.73–60.06/oz. Base Metals – Base metals were mostly firmer, though copper pared recent gains amid the rise in oil prices and its implications for inflation and growth. 3M LME copper traded around the middle of a USD 13,769.00–13,919.00/t range. Glencore (GLEN LN) reportedly planning to withdraw large amounts of lead from LME warehouses. Iran set its August Asian-loading price for Iranian Light at a USD 4.35/bbl discount to the Oman/Dubai benchmark. Iraqi PM to visit Iran Thursday, INA reported; gas file will be on the topic of discussions. Chinese refiners are offering some Middle East crude for resale as prices rebound, Bloomberg reported. Equinor (EQNR NO) said Johan Sverdrup is now seen declining at the low-end of the previously indicated 10-20% range this year, implying stronger production than earlier feared. Goldman Sachs analysts raised TTF forecasts for Q3 and Q4 to EUR 60/MWh (prev. saw 41/MWh) and EUR 53/MWh (prev. 40/MWh), following an assumed delay to Persian Gulf LNG export normalisation to October 2026. Goldman said that a prolonged disruption could push December 2026 TTF above EUR 100/MWh, while a faster Hormuz ramp could see prices fall toward EUR 40/MWh. It adds that the 2028/29 outlook remains bearish, sees EUR 19/MWh in 2028, and 16/MWh in 2029. EUROPEAN DATA UK PPI Output MoM (Jun) M/M 0.0% vs. Exp. 0.4% (Prev. 0.5%). UK Core Inflation Rate MoM (Jun) M/M 0.3% (Prev. 0.3%). UK Inflation Rate MoM (Jun) M/M 0.1% vs. Exp. 0.1% (Prev. 0.2%). UK Core Inflation Rate YoY (Jun) Y/Y 2.6% vs. Exp. 2.5% (Prev. 2.6%). UK Inflation Rate YoY (Jun) Y/Y 2.6% vs. Exp. 2.7% (Prev. 2.8%); Services 3.6% (prev. 3.7%). UK PPI Core Output MoM (Jun) M/M 0.5% (Prev. 0.8%). UK PPI Core Output YoY (Jun) Y/Y 2.6% (Prev. 2.3%). UK PPI Output YoY (Jun) Y/Y 3.5% (Prev. 4%). UK PPI Input YoY (Jun) Y/Y 7.3% (Prev. 8.7%). UK PPI Input MoM (Jun) M/M -2.0% vs. Exp. 0.2% (Prev. 0.2%). NOTABLE HEADLINES UK PM Burnham is reportedly to set out plans on youth unemployment next week. UK PM Burnham said tax decisions will be made in the budget when asked about potential tax rises. Tax-free personal allowance will not be changed through unfunded commitments and will instead be reviewed as part of the budget. EU regulators will formally charge JD.com (JD) over its USD 2.5bln bid for German electronics retailer Ceconomy (CEC GY), Reuters reported. The statement of grounds will outline concerns about unfair subsidies under the Foreign Subsidies Regulation, requiring the companies to address them or risk the deal being vetoed. TRADE/TARIFFS US Secretary of State Rubio expects a "very positive" US visit by China's President Xi, AFP reported. UK Defence Secretary Streeting said US President Trump is right to ask Europe for more spending on defence. US Secretary of State Rubio said cooperation with China on fentanyl trade is a work in progress. US Secretary of State Rubio said he discussed trade issues with China, including the Board of Trade. GEOPOLITICSRUSSIA-UKRAINE Russia's Defence Ministry said Russian forces had taken control of Blahodatne in Ukraine's Zaporizhzhia region, Interfax reported. Ukrainian President Zelensky tasked Ukraine’s new top military commander with stepping up counteroffensive operations. Russian President Putin said domestic fuel market difficulties are temporary. reported indicate Russian attacks in Odesa continue. Russian Foreign Minister Lavrov said his meeting with US Secretary of State Rubio is scheduled for tomorrow. Ukrainian President Zelensky said Ukraine has struck logistics centres involved in the supply of drone components in Russia's Krasnodar and Stavropol regions. Ukraine reportedly has agreed to export drones to the US, according to reported. Russia's Defence Ministry said its forces attacked Ukrainian port and two vessels were struck at sea, according to TASS. MIDDLE EAST US President Trump posted "From this point forward, any time Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT". Full post: "From this point forward, any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT, including those located next to, or in, the Capital City of Tehran. Thank you for your attention to this matter! President DONALD J. TRUMP". Iran said its production of strategic missiles has never stopped, Tasnim reported. Iran set its August Asian-loading price for Iranian Light at a USD 4.35/bbl discount to the Oman/Dubai benchmark. Iran's Foreign Ministry Spokesperson said there is no nuclear activity at Iran's Kolang Kouh (Pickaxe Mountain), via X. Iran's IRGC said that if aggressions continue, "we will be ready for a regret-inducing operation that will follow with an announcement of a general mourning in the United States". Italy will host a new round of talks between Lebanon and Israel on August 4th, Al Hadath reported. EU naval force Aspides said ships with US, Israeli, or Saudi links face a higher risk of Houthi attacks following a warning issued by the Yemen-based military. US, Israeli, or Saudi links should avoid sailing through the Red Sea and Gulf of Aden until the threat level decreases. Iraqi PM to visit Iran Thursday, INA reported; gas file will be on the topic of discussions. US Secretary of State Rubio said US has many options to deal with Iran if it refuses to negotiate. US Secretary of State Rubio said US would love to reach a diplomatic settlement with Iran. US Secretary of State Rubio said Strait of Hormuz remains a key source of energy; Iran can never possess nuclear weapons. Adds that China does not want tolling through international waterways like the Strait of Hormuz. US Secretary of State Rubio said China is displeased with Iran's actions in the Strait of Hormuz; Iran is in "a lot" of trouble. In some cases, China has been cooperative in Iran. Disagree with China's activities on Taiwan. The Israeli security cabinet is to discuss the Iran and Lebanon files next Sunday, Al Hadath reported. Iranian Army Commander-in-Chief said Iran controls Hormuz Strait and will fire upon American forces, Press TV reported. Iranian lawmaker Qashqavi said US President Trump's claim about Iran's request for negotiations is not true. Explosions were reported in Israel's Eilat during Iran's missile strike on Jordan's Aqaba, N12 reported. Iranian Interior Ministry spokesperson said there is currently no ongoing negotiation; it may only involve the exchange of messages, Mehr News reported. "No new message has been put forward by Iran". Iranian Army Commander-in-Chief said will fight with everything if the US put "feet in Iran", Tasnim reported. Iran’s Interior Ministry said it had no new information to provide; details light. Iran’s military said it struck US targets at Jordan’s Azraq base and Bahrain’s Sheikh Isa Air Base, according to Iranian state media. Pakistan is said to have sought USD 10bln in US funding after mediating talks with Iran, sources say. US strikes caused two explosions in Iran's Bushehr and one near Khormoj, with no casualties, while power to Bandargah village was restored within two hours, ILNA reported. Saudi civil defence said early warning issued in Dammam to alert of potential danger; danger has passed from Dammam. Four tankers changed course in the Red Sea on Wednesday, shipping data suggest. Two of the four tankers changed course in the Red Sea and listed the Suez Canal as their next destination. A car carrier changed course in the Gulf of Aden and sailed away after previously signalling Saudi Arabia's Port of Jeddah as its destination. Iranian media reported that US forces struck several fishing boats after allegedly mistaking them for IRGC speedboats. China's MOFCOM Spokesperson said China has noted that France recently enacted an "anti-ultra-fast fashion" law that imposes discriminatory restrictions on Chinese-funded cross-border e-commerce platforms; China expresses its serious concern over this. Will monitor and will take necessary measures to retaliate. US Secretary of State Rubio said arms sales to Taiwan continue to be under review. US Secretary of State Rubio said China's He and Wang talked about Xi's trip to the US. Both sides have differences but their job is to manage those. There are areas of potential cooperation. NOTABLE NORTH AMERICAN NEWSUS Senate Committee to take up Chinese connected vehicle crackdown bill Wednesday.NORTH AMERICAN DATA US MBA Mortgage Applications (Jul/17) 1.9%. US MBA 30-Year Mortgage Rate (Jul/17) 6.69%.