Newsquawk European Market Wrap - 21st August 2026

European bourses are set to end the Friday's trade entirely in the green, with the EuroStoxx 50 snapping its 5-day losing streak. G10s were firmer against the Buck throughout the European day; Antipodeans were the clear outperformers. WTI and Brent futures remained on a softer footing earlier as geopolitical headlines quietened heading into the weekend. EQUITIES European bourses are set to end the Friday's trade entirely in the green, with the EuroStoxx 50 snapping its 5-day losing streak. Little in terms of a clear driver for the upside, with bond yields and energy benchmarks also higher. Sectors held their positive bias. Basic Resources remained the sector outperformer, with Autos and Optimised Personal Care rounding out the top 3 sectors. To the downside remained Health Care, highlighting the constructive risk tone. Energy and Media complete the sector laggards. Key stories include: Italian banks, BMPS (-1.6%) puts in a combined EUR 34bln all-cash offer to acquire Banco BPM (-0.5%) and Banca Generali (-2.0%); Bavarian Nordic (+9.9%), Q2 revenue beat and raised its FY26 guidance; Nibe (+7.5%), Q2 metrics grew Y/Y and highlighted optimism about its 2026 performance; Adidas (+1.8%), initiated with buy at JPMorgan. US cash equities initially opened entirely in the green, with miners and crypto firms leading gains in the SPX. On the data front, flash S&P PMIs printed mixed. Contrary to the EZ/UK figures, services printed stronger-than-expected while manufacturing missed estimates. S&P noted that reduced safety stock building and supply delays dampened factory production growth, explaining the downturn in manufacturing. FX G10s were firmer against the Buck throughout the European day; Antipodeans were the clear outperformers, energy exporters CAD and NOK were helped by oil prices, which were choppy but remained towards recent highs. DXY was at the lower end of its 98.56-98.84 range, with an absence of leads today not giving it much of a bias. Price action went in tandem with US yields, particularly the long end. In the fallout of the Treasury announcement and Bessent’s remarks on Monday, most desks are sceptical of a meaningful solution to fiscal consolidation; ING said a task force like Musk’s “DOGE” would be insignificant compared to the 6% budget deficit, while MUFG flagged the mid-terms ahead and GOP not having the numbers within Congress. All in all, measures to temper the fiscal situation are likely net-negative whether effective or not; the most decisive factor will be Iran developments, which are set to linger for some time. In terms of the little drivers we had today, geopolitics was quiet, while S&P Global PMIs did little to shift the dial. The UK’s Retail metrics were poor as consensus had expected, echoing the BRC monitor for the same period. For the BoE, the print does not change the narrative. Cable saw around 8 pips of downside after the Flash PMIs; action which was swiftly pared in choppy trade. Flash PMIs failed to spur a reaction, despite broadly printing further into expansionary territory. GBP/USD ventured as high as 1.3675 but lost buyers around 1.3650, which is proven multi-month support. EZ flash PMIs supported the bullish EUR bias today as figures indicated solid third quarter GDP growth, a return to hiring by companies for the first time this year, and inflation remaining elevated by historical standards. EUR/USD marked a session high of 1.1711 before returning to May resistance at 1.1685, set to finish the day flat. Antipodeans outperformed after China’s Vice Finance Minister pledged to roll out additional fiscal policy measures, remarks which follow similar rhetoric from July’s Politburo meeting. Attention lies on further measures to be released following a string of poor data, which could continue to help the Antipodeans. AUD and NZD were each firmer by 0.7% against the Buck, with Aussie rallied throughout the day and looked to 0.72, Kiwi lacked appetite at 0.5980. FIXED INCOME Fixed benchmarks meandered within familiar ranges throughout the European session. Initially held a slight upward bias in the morning, but then succumbed to some mild selling pressure into the afternoon as crude benchmarks picked up. The morning saw the US 30yr briefly slip below the 5.25% mark – a move which lacked a clear driver. That pressure has since stabilised, and is set to end the London session around that mark. US PMIs had little impact on USTs, off by c. 3+ ticks as the European day comes to a close. Geopolitical updates aside, near-term catalysts for the remainder of the day are lacking. Focus will be on US Treasury Sec Bessent, who is set to speak on Monday. Bunds (U/C) held steady throughout the day. The European benchmark had regional and EZ-wide PMI metrics to digest this morning, whereby the French and German releases were subject to poor Services components, whilst Manufacturing topped expectations. The EZ-wide figure saw both the Manufacturing and Services figures top expectations. The accompanying release highlighted that “although high prices reportedly continue to dampen demand, price pressures have shown signs of further easing”. The report concluded by suggesting that data plays in favour of the hawkish bias. Gilt (-4 ticks) price action essentially echoed the above. UK Retail Sales were weak, whilst the PMIs mildly topped expectations. In the accompanying report, “the data suggest the Bank of England looks likely to keep a hawkish bias but will stay cautious, holding off any rate hikes until the growth and inflation trajectories become clearer”. The release saw downticks of c. 7 ticks, but this proved fleeting. COMMODITIES Crude - WTI and Brent futures were on a softer footing earlier as geopolitical headlines quietened heading into the weekend. Crude then extended downside after Iranian President Pezeshkian said the war “must end at some point” and that it would be better to end it today, with Brent falling from around USD 94.00/bbl to USD 93.30/bbl at the time as the remarks were picked up by newswires almost an hour after Newsquawk reported it to clients. Prices subsequently recovered from those reaction lows. WTI traded within a USD 85.80-87.51/bbl range, while Brent remained within a USD 92.74-94.43/bbl range. Natural Gas – Dutch TTF remained firmer despite the pullback in crude, with European storage replenishment continuing to support the complex. TTF extended to almost EUR 67/MWh, rising to a EUR 66.96/MWh high from a EUR 64.65/MWh low. Precious Metals – Precious metals extended their upside amid continued USD weakness. Spot gold briefly rose above the psychological USD 4,600/oz mark, reaching a USD 4,604.61/oz high from a USD 4,508.90/oz low, before easing modestly. Spot silver similarly surged to test USD 70/oz, reaching a USD 70.02/oz high from a USD 67.92/oz low. Base Metals - Base metals remained firmer amid the weaker Dollar, with COMEX copper recovering strongly from a USD 6.48/lb low to a USD 6.62/lb high and trading around USD 6.59/lb. 3M LME copper traded towards the upper end of a USD 14,050.90-14,265.00/t. US CENTCOM told CNBC that the US military helped over 660mln barrels of oil through the Strait of Hormuz since May. Saudi Aramco reportedly instructed LPG buyers to resume loading cargoes from inside the Persian Gulf for the first time since port infrastructure was damaged amid the war, sources state. A Saudi Aramco-loaded VLCC has transited the Strait of Hormuz and is headed to Sohar, Oman, according to Argus Media citing ship-tracking data. Petrobras (PBR) begins negotiations for exploration blocks in Ghana. US President Trump said, for the next 90 days, US will allow up to 300K metric tons of product for ground beef to be imported with no quota... have a commitment this beef will be sold at 25% below current market prices. Full post:. Today, I concluded a deal to substantially lower the price of ground beef for working American families. As everyone knows, under President Biden, beef prices soared at their fastest rate and the American beef herd fell to its smallest size in modern history. As we work to rebuild this herd and help our ranchers, for the next 90 days, the United States will allow up to 300,000 metric tons of product for ground beef to be imported with no out of quota tariff. We have a commitment that this beef will be sold at 25 percent below current market prices. This deal will reduce prices for Americans while giving space for our Great American Beef Herd to grow again. Thank you for your attention to this matter! President DONALD J. TRUMP. Nigeria will provide exploration cost subsidies to mining companies to spur the discovery of new commercial mining and processing opportunities, Semafor reported citing a government source. Government officials say it is an effort to identify untapped reserves of more than 44 minerals, especially for those used for batteries and digital infrastructure, like lithium, nickel, cobalt and rare earths. Mexico extends its fuel price stabilisation plan for six months, reported suggest. Oil tankers have to wait for up to 30 days to load at Venezuelan ports, according to shipping data and sources. Iraq's PM said that the country plans to raise oil production to 8-10mln bpd, within six years; Iraq has sent a minister to Saudi Arabia to discuss OPEC output. Offers of Iranian crude to Chinese buyers have reportedly declined, Reuters reported. Germany has withdrawn carbon credits from 30 China-based projects deemed to be suspicious, overstated or fake, Bloomberg reported; ExxonMobil (XOM) and Vitol are linked to some of the projects. EUROPEAN DATA European Negotiated Wage Growth (Q2) 2.44% (Q/Q Rev. 2.56%, Prev. 2.48%). European S&P Global Composite PMI Flash (Aug) 52.1 vs. Exp. 51.7 (Prev. 52.0). European S&P Global Manufacturing PMI Flash (Aug) 52.8 vs. Exp. 51.8 (Prev. 51.9). European S&P Global Services PMI Flash (Aug) 51.7 vs. Exp. 51.5 (Prev. 51.7). UK S&P Global Composite PMI Flash (Aug) 52.5 vs. Exp. 51.6 (Prev. 52.2). UK S&P Global Services PMI Flash (Aug) 52.8 vs. Exp. 51.8 (Prev. 52.1). UK S&P Global Manufacturing PMI Flash (Aug) 51.5 vs. Exp. 51.5 (Prev. 51.9). UK Retail Sales (Jul MM) -0.5% vs. Exp. -0.5% (Prev. 0.7%). UK Retail Sales (Jul YY) 1.6% vs. Exp. 2.2% (Prev. 3.8%). UK Retail Sales ex Fuel (Jul YY) 2.3% vs. Exp. 3.3% (Prev. 5.0%). UK Public Sector Net Borrowing (PSNB) ex-Banks (Jul) 1.8B vs. Exp. 0B (Rev. 12.8B, Prev. 16.0bln). UK Retail Sales ex Fuel (Jul MM) -0.9% vs. Exp. -0.5% (Prev. 0.9%). German S&P Global Composite PMI Flash (Aug) 51.0 vs. Exp. 51.3 (Prev. 51.3). German S&P Global Manufacturing PMI Flash (Aug) 54.1 vs. Exp. 52 (Prev. 52.2). German S&P Global Services PMI Flash (Aug) 48.5 vs. Exp. 50.1 (Prev. 49.8). French S&P Global Manufacturing PMI Flash (Aug) 51.5 vs. Exp. 50 (Prev. 49.8). French S&P Global Composite PMI Flash (Aug) 48.8 vs. Exp. 49.5 (Prev. 49.4). French S&P Global Services PMI Flash (Aug) 48.4 vs. Exp. 49.8 (Prev. 49.6). French Business Climate Indicator (Aug) 98 vs. Exp. 98 (Prev. 97). French Business Confidence (Aug) 103 vs. Exp. 101 (Prev. 101). Swedish Employed Persons (Jul) 5.507M (Prev. 5.398M). Swedish Unemployment Rate (Jul) 7.8% (Prev. 9.9%). NOTABLE HEADLINES Germany's VDMA said German Machinery expects fell 0.8% Y/Y in H1'26; Geopolitical crises, tariffs, and weak demand in certain countries are collectively weighing on foreign trade in the machinery sector. Free trade agreements and a strong EU single market remain important. TRADE/TARIFFS Canadian Trade Minister Leblanc said will meet with USTR Greer in Washington at 10:30 EDT. CENTRAL BANKS ECB Consumer Expectations Survey (Jul):. 1-year inflation expectation: 2.9% (prev. 3%). 3-year inflation expectation: 2.7% (prev. 2.8%). 5-year inflation expectation: 2.4% (prev. 2.4%). ECB's Kazaks said he sees wage growth gradually slowing; the ECB is well placed to act, if needed. PBoC reportedly to "survey" some mutual funds regarding long-dated bonds, sources suggest. GEOPOLITICS MIDDLE EAST Iranian Parliament Speaker Ghalibaf said Iran and Iraq’s alliance is unbreakable and vowed they would again confront the US and Israel. Iranian President Pezeshkian reiterates Iran will under no circumstances bow to bullying, Al Jazeera reported. Iran's acting defence minister said "We never started war but will not allow military aggression". Iran President Pezeshkian said "The war must end at some point, it is better to end the war today, when we are in power and dignity and the whole world acknowledges our victory", IRIB reported. "The war must end at some point, it is better to end the war today, when we are in power and dignity and the whole world acknowledges our victory". "Some people are sitting outside the hole because they do not know what the government is in, they comment and analyze without any bias, they have not suffered any suffering and hardship and then they talk about high prices". Iran’s Acting Defence Minister said Iran’s military strength is intended to deter war and that Tehran has never initiated, and will not initiate, aggression against another country, Al Mayadeen reported. Security officials reportedly see a lower near-term risk of an expanded war with Iran, with Trump’s new economic sanctions intended to buy time until after the US midterms, Jerusalem Post reported. Israel is increasing military preparedness in case strikes resume. Iranian Parliament speaker Ghalibaf said Iran must draw up plans to overcome unjust sanctions in order to defeat them. Iran and Oman have finalised a preferential trade agreement aimed at strengthening economic ties, with the deal sent to Iran’s parliament for final review. Nour News reported. Yemeni Armed Forces announce the targeting Houthi heavy equipment and fortifications, according to Al Arabiya. Lebanon's Hezbollah said US sanctions will not deter its resistance activities, SNN reported. Yemeni Armed Forces announce it will issue an important statement at 16:00 local time (14:00BST/09:00EDT) regarding the targeting of Saudi Mercaneries with the Rajum drone. "An explosion targeting the enemy [Israeli] army between the towns of Arnoun and Kfar Tebnit", Al-Nour radio reported. RUSSIA-UKRAINE Ukranian President Zelensky said Ukrainian forces struck an oil refinery in Russia's Perm and a military base in Marinovka. NORTH AMERICAN DATA US S&P Global Manufacturing PMI Flash (Aug) 53.2 vs. Exp. 53.9 (Prev. 53.9) US S&P Global Composite PMI Flash (Aug) 56.0 (Prev. 54.5) US S&P Global Services PMI Flash (Aug) 56.8 vs. Exp. 54 (Prev. 54.6) Canadian Retail Sales (Jun YY) 8% (Prev. 5.9%). Canadian Retail Sales Final (Jun MM) 0.6% vs. Exp. 0.4% (Prev. 1%). Canadian Retail Sales Prel (Jul MM) -0.8% (Prev. 1%). Canadian Retail Sales Ex Autos (Jun MM) 0.5% vs. Exp. 0.4% (Prev. 1.2%).