Newsquawk European Market Wrap - 10th August 2026

European bourses are set to end Monday’s trade with broad gains. WTI Sept and Brent Oct futures held a positive bias as US-Iran geopolitics remain uncertain. JPY saw ~40 pips of strength on a Kyodo report that said the BoJ has "no choice but to raise interest rates". EQUITIES European bourses are set to end Monday’s trade with broad gains, with the AEX the outperformer while the FTSE 100 lagged. Lack of a clear driver for equities as geopolitical updates remained light, and the earnings docket started to quieten down. Sectors held their broadly negative bias. Tech held the top spot, as European chip names benefited from TSMC’s 45% Y/Y revenue jump for July. Other sector gainers include Consumer Products & Services and Energy. The sector laggards were Telecoms, Media and Food, Beverages & Tobacco. Top stories included: GEA Group (-0.3%), despite raising its FY26 guidance; Hypoport (+1.9%), Q2 revenue and gross profit gained Y/Y and confirmed FY26 guidance; Eutelsat (-0.3%%), the ESA said an additional 66 satellites are required for its space project; Vistry (-9.0%), as Allianz Trade reportedly cut its credit limits for suppliers; Coca-Cola HBC (-4.2%), downgraded to neutral at BNP Paribas. US cash equities open broadly in the red. There were plenty of stories in the US to compensate for the lack of earnings: Microsoft (+1.%)plans to significantly increase next-gen AI chip production; Intel (-3.0%) announces USD 15bln common stock offering; Apple (-2.4%), downgraded at Jefferies citing cancelled all-glass iPhone orders and soaring memory costs. FX G10s mostly flat/weaker against the Buck throughout the day; JPY was the laggard throughout the session, GBP outperformed. USD posted gains in APAC, which waned throughout the European morning; however returning to the green on renewed JPY weakness (see below), DXY now set to complete the London session +0.2% after peaking around 99.80. Focus this week will overwhelmingly be on the CPI print, especially since FT sources before NFP suggested Warsh was focused on the inflation side of the mandate heading into the September meeting. On that note, market bets for tightening remain trimmed vs. Friday, with the OIS curve implying ~22% probability of a hike, around half of that seen pre-data. Today's calendar is light, though remarks are expected from hawk Hammack at 20:00 BST. JPY saw ~40 pips of strength on a Kyodo report that said the BoJ has "no choice but to raise interest rates after Governor Ueda signalled it at the last meeting; a report which follows a hawkish Summary of Opinions overnight. Strength on this has since pared, and USD/JPY now attempts to build on today's gains, which, despite these bullish factors, MUFG attributes to retail short USD/JPY positions which have "probably" been liquidated. Participants are now potentially turning to a carry strategy, which could be seen as more attractive than chasing the pair lower at these levels. USD/JPY surpassed 159.00; the next upside level is 160, which is also the 100DMA. A continued UK narrative of "no news is good news" with Parliament on recess and PM Burnham trickle-feeding incremental cost-of-living policies. GBP carry remains attractive, and, combined with technicals, a strong REC/KPMG jobs number helped Cable, which was above 1.35 for most of the session. EUR/GBP was 0.2% weaker and will likely attempt the 0.8550 level to the downside. On that, EZ drivers are light, with a strong Sentix survey not sparking a reaction. EUR was incrementally firmer against most CEE, with the week's calendar highlighted by Polish/Turkish/Czech inflation. FIXED INCOME A contained start to the week for the fixed income space, with specifics light in conditions that feel almost like the typical summer holiday period. However, as the session progressed, gradual energy upside has lifted yields and weighed on fixed. Bunds were unreactive to the EZ Sentix figure this morning, which was much stronger than expected, driven almost entirely by a surge in the current figure; globally, all regions ex-Japan improved. Bunds set to end the European day lower by 20 ticks, in 124.78 to 125.08 parameters. Gilts opened with modest gains, before slipping to a 87.23 low, down by 30 ticks and modestly underperforming. A function of the typical relationship between gilt and energy performance, rather than a specific fresh driver. USTs also came under pressure as energy pickedup, though to a much lesser extent with downside of just five ticks in a 108-15+ to 108-24 band. Ahead, we have a speech from Fed's Hammack scheduled. Treasury Block Trades- 08:27ET/13:27BST: 5.0k 2-Year T-Note Futures (ZTU6) at 102-300. Spread. 04:25EDT/09:25BST: Bought 3.3k 5-Year T-Note Futures (ZFU6) for 106-120 & sold 1.6k Ultra 10-Year U.S. Treasury Note Futures (TNU6) at 110-160. Charles Schwab (SCHW) announces USD-denominated two-parter. COMMODITIES WTI Sept and Brent Oct futures held a positive bias as US-Iran geopolitics remained uncertain, although gains were initially capped as no direct military firings or airstrikes were exchanged between US and Iranian forces over the weekend. To briefly recap, the US, Iran and Oman continued negotiating a temporary plan to partially reopen the Strait of Hormuz, although Iran said no immediate reopening was guaranteed. Iran continues to demand major concessions, while disputes remain over banning US/Israeli ships and imposing transit fees under an Oman-Iran traffic-management deal. Elsewhere, Ukraine struck the Taneco oil refinery in Russia’s Tatarstan region. WTI resided in a USD 77.79-79.98/bbl range (vs Friday’s USD 76.53-78.77/bbl range), while Brent traded within a USD 83.33-84.97/bbl range (vs Friday’s USD 81.50-85.38/bbl range). Dutch TTF posted larger gains as Middle Eastern concerns were compounded by EU gas storage levels entering August at a historically low 55% capacity. Dutch TTF traded up almost 8%, near EUR 60/MWh vs a low around EUR 56/MWh. Precious Metals were initially firmer in continuation of Friday’s NFP-driven upside, although the steady grind higher in oil prices weighed on the complex. Spot gold looks to end the European session flat/subdued, still within its narrow USD 4,313-4,362/oz morning range, within Friday’s USD 4,230-4,372/oz parameter. Base Metals were eventually mostly firmer, with a mixed performance seen as oil ground higher, with 3M LME copper holding above USD 14k/t in a USD 14,033.98-14,171.80/t range, while the weekend’s soft Chinese inflation report had little impact. India is reportedly considering limiting the share of sugarcane used for ethanol production next season to help safeguard domestic sugar supplies, sources say. Iraq’s SOMO set the September Basrah Medium crude price for North and South America at a USD 5.10/bbl premium to Argus Sour. Ukraine's Agriculture Ministry said export disruptions could create a grain storage capacity shortfall of around 11mln T this autumn. Hungarian PM said rising Danube water levels have allowed Paks nuclear power plant to begin reverting one turbine to its original state. UAE's ADNOC Gas is planning to invest over USD 8bln as part of its expansion push, WSJ reported. Kazakhstan is mulling using the BTC and Baku-Supsa pipelines and the Trans-Caspian route via Azerbaijan, for oil exports amid disruptions to the CPC, IFX reported. Magnitude 6.7 earthquake reported near Choco, Colombia; EMSC suggests magnitude 6.8 strikes Columbia.; No tsunami warning was issued after the earthquake struck Colombia. Kazakhstan is mulling using the BTC and Baku-Supsa pipelines and the Trans-Caspian route via Azerbaijan, for oil exports amid disruptions to the CPC, IFX reported. EUROPEAN DATA EZ Sentix (Aug): 0.9 vs. exp. -0.7 (prev. -3.1). In particular, the current conditions sub-index recovered by a significant 6.8 points. Economic expectations rose only slightly this month, by 1.0 points to +10.3 points. The German economy also continues to perform well: economic expectations rose again by 2.5 points to +6.0 points, reaching their highest level since February 2026. The assessment of the current situation improved significantly, rising by 11.5 points, but remains clearly in negative territory at -28.3 points. Globally, the signs continue to point to a boom: the sentix Global Aggregate rose by 1.4 points to +14.7 points in August, signalling a broad-based economic recovery. Global expectations rose slightly by 0.4 points. Almost all economic regions recorded an improvement in August. Only Japan failed to join this positive trend. Swedish Construction Output (Jun YY) 7.6% (Prev. 3.6%). Swedish Industrial Production (Jun MM) -0.4% (Prev. 0.2%). Swedish Industrial Production (Jun YY) -1.5% (Prev. 6.9%). Swedish New Orders (Jun YY) 29.9% (Prev. 1.3%). Norwegian PPI (Jul YY) 23.4% (Prev. 14.9%). Norwegian Core CPI (Jul YY) 2.7% (Prev. 2.7%). Norwegian CPI (Jul MM) 1.0% (Prev. -0.2%). Norwegian Core CPI (Jul MM) 0.8% (Prev. -0.1%). Norwegian CPI (Jul YY) 3.0% (Prev. 2.7%). CENTRAL BANKS US White House NEC Director Hassett said him replacing Lisa Cook on Fed board 'not gonna happen'. Kevin Warsh is an independent as it comes. US White House NEC Director Hassett said if he were at the Fed now he'd hold or cut rates. September rate hike signal from the BoJ resulted in the US joining in on intervention, Kyodo reported citing sources; BoJ now has "no choice but to raise interest rates" in September. One senior official said, "Mr. Ueda's remarks were highly valued by the U.S. side. On the other hand, the Bank of Japan now has no choice but to raise interest rates (at its next monetary policy meeting on September 17th and 18th).". PBoC said it plans to strengthen its financial framework by building a high-quality technology board in the bond market, expanding its macroprudential and financial-stability role, and improving liquidity-injection and monetary-policy tools. GEOPOLITICS MIDDLE EAST Iran's Foreign Ministry spokesperson said Iran is currently focused on the Strait of Hormuz rather than resuming negotiations with the US, Al Mayadeen reported. Iran's Foreign Ministry spokesperson said talks with Oman are constructive and positive; "We did not address the issue of fees in the discussions with Oman regarding the Strait of Hormuz, but it is natural to collect fees for services received.". Iranian Foreign Ministry spokesperson Baghaei said Iran has demanded compensation for damage caused by the US-Israel war, while the Strait of Hormuz could reopen if no third party interferes, Al Jazeera reported. adds that Iran will not hold talks with the US as long as Washington continues to violate the interim deal. Tehran's mayor said Iran must negotiate with countries in the region from a position of strength, SNN reported. Iranian President said a meeting with the Iranian Supreme Leader lasted seven to eight hours. The Iranian parliament’s National Security and Foreign Policy Committee on Sunday approved the general outlines of a bill to manage the Strait of Hormuz, ISNA reported. Iranian Parliament Speaker Ghalibaf's visit to Iraq has been delayed to next week, Al Hadath reported. RUSSIA Russia will treat any military provocations along the Dniester River as an attack on Russia, TASS reported, citing a Russian diplomat. NOTABLE NORTH AMERICAN NEWS US White House NEC Director Hassett said no need to conduct theory on Treasuries for stable Yen; suggest stable Yen can help head off contagion. US White House NEC Director Hassett said AI is perhaps most important policy issue next 2 years and admin carefully studying AI security issues. US Health Secretary RFK jr. is to announce a plan on Monday to reform a loophole which allows food companies to add chemicals to products without notifying the FDA, WaPo reported. White House officials warn that OpenAI is risking its relationship with the government by hiring Dean Ball in senior role, NYP reported, citing sources.