Newsquawk European Market Wrap - 14th August 2026

European bourses are to end the final session of the week mixed G10s were entirely firmer against the Buck throughout the session. Kiwi and NOK led in a reversal of recent losses. Crude was choppy and reversed its earlier gains as the session progressed despite a lack of a clear fresh catalyst. EQUITIES European bourses are to end the final session of the week mixed, with a slight tilt to the upside as markets rebound from the earlier losses amid a light volume environment. Germany's DAX 40 outperformed, supported by SAP (+4.6%) gains. Sectors ended mixed. Media topped the sector pile, followed by Tech and Insurance. On the other hand, Health Care was the sector laggard, with Basic Resources and Utilities following closely. Key headlines included: Aviva (+1.8%), despite beating H1 EPS and Operating Profit estimates; Valneva (+23.5%), EMA validated its Lyme disease vaccine candidate; Maersk (+6.0%), upgraded to neutral at Nordea. US cash equities opened muted. No key earnings pre-market; however, Applied Materials reported earnings after-hours, in which shares fell despite quarterly metrics beating estimates and strong guidance. In terms of index changes, Reddit is to join the S&P 500 on August 18th. FX G10s were entirely firmer against the Buck throughout the session. Kiwi and NOK led in a reversal of recent losses. DXY gradually weakened throughout the day in thin summer trade, with earlier bearishness accelerated by a very soft retail sales print, pushing DXY to a 99.05 session low; action which has reversed somewhat alongside JPY action where the pair found support at 158.60. USD/JPY continued faimilar choppy action after another BoJ source, via Reuters, said the bank was set to raise interest rates as soon as September; this saw the pair slip 17 pips to a 159.15 base which was later breached on the emergence of US traders, and accelerated by that soft US Retail sales print; pushing the pair to 158.60 base where it has found support a handful of times in recent days. On the BoJ, currently, markets assign a c. 80% probability of a 25bps hike in September. More pertinently, Bloomberg sources on Thursday said the Takaichi government is to support faster BoJ rate hikes; the piece noted the bank could raise rates in either September or October, whereas Reuters was more explicit on a move in the September meeting, potentially the reason why JPY strength continued throughout the session. Kiwi is set to finish the day the best performer vs the USD after losses following Thursday's soft inflation expectations survey; action which entirely faded with the pair ~0.5% higher than pre-data. NZD/USD +0.7%, once again above all significant DMAs. NOK was one of the G10 outperformers, strength which came likely as a function of earlier firm oil prices and a reversal of Norges Bank-related weakness on Thursday. FIXED INCOME A muted trading session for fixed income, as Summer markets come into full force. USTs traded in a 108-24+ to 109-03 range, with the peak formed following soft retail sales. The headline figure printed at -0.6% M/M (exp. 0.1%, prev. 0.2%), while the ex-gas/auto figures fell 0.2% M/M. 5 of 13 categories posted declines, led by a 2.2% drop in sales at nonstore retailers. The yield curve was steepening heading into the figure, with the US 2-10yr spread now printing at 53bps. Gilts gapped lower at the open and oscillated in a narrow 86.80-87.26 range throughout the European session. Despite the result of Farage winning the Clacton by-election coming before the market open, the initial downside seemed to be a result of the energy upside. Bunds sold off overnight but held steady at a low of 124.65 throughout the European morning. As the session progressed, another leg lower formed, despite a clear driver, and is to close just shy of the 124.54 daily trough. COMMODITIES Crude was choppy and reversed its earlier gains as the session progressed despite a lack of a clear fresh catalyst. Geopolitical tensions remain elevated after US Treasury Secretary Bessent overnight said the US would implement unprecedented measures on Iran, while Iran said a possible agreement with Oman on a new Hormuz shipping route would not by itself mean the Strait would reopen. UKMTO also reported that a tanker was struck by a drone while transiting outbound through the Strait. WTI Sep'26 fell from a USD 82.99/bbl high to a USD 80.71/bbl low and traded around USD 81.16/bbl at the time of writing, while Brent Oct'26 retreated from a USD 88.69/bbl high to a USD 86.20/bbl low. Precious Metals edged higher as the session progressed and with DXY on a softer footing, with further downticks seen on soft US Retail Sales. Spot gold rebounded from a USD 4,311/oz low to a USD 4,387/oz high and traded near best levels around USD 4,379/oz at the time of writing. Spot silver similarly extended higher from a USD 63.51/oz low to a USD 65.25/oz high. Base Metals were mixed, with copper waning from earlier highs. COMEX copper fell from a USD 6.61/lb high to a USD 6.55/lb low and traded around USD 6.59/lb. 3M LME copper earlier remained above USD 14k/t within a USD 14,045.20-14,145.63/t range. Ukraine’s agriculture minister said the it expects Ukraine to produce 80mln tonnes of grains, oilseeds and processed products in the current marketing year, with normal port operations allowing exports of up to 60mln tonnes. EIA expects US oil production to average 13.83mln BPD in August, (vs 13.82mln BPD in July), and forecasts 13.77mln BPD in September. Projects US natural gas production to average 122.6 bcf per day in August (vs 122.0 bcf per day in July), and forecasts 123.2 bcf per day in September. Iraq’s oil exports have reached 2mln BPD since the beginning of August, according to the state news agency INA. China's State Planner said domestic gasoline and diesel retail price caps will be cut by CNY 230/T and CNY 220/T, respectively; effective on August 14. Poland's Energy Minister said the cost of reintroducing fuel price measures will reach about PLN 500mln within two weeks. EUROPEAN DATA Belgian Trade Balance (Jun) 6442.1 (Prev. 4271.9). EZ Trade Balance (Jun) 8.6 vs. Exp. -2.2 (Prev. -9.0). EZ GDP Growth Rate 2nd Est (Q2 QQ) 0.4% vs. Exp. 0.4% (Prev. 0.0%). EZ GDP Growth Rate 2nd Est (Q2 YY) 1.0% vs. Exp. 1% (Prev. 0.5%). EZ Employment Change Prel (Q2 YY) 0.5% vs. Exp. 0.6% (Prev. 0.5%). EZ Employment Change Prel (Q2 QQ) 0.1% vs. Exp. 0.1% (Prev. 0.1%). French CPI Final (Jul YY) 2.10% vs. Exp. 2.1% (Prev. 2.10%). French CPI Final (Jul MM) 0.6% vs. Exp. 0.6% (Prev. -0.3%). French HICP Final (Jul YY) 2.4% vs. Exp. 2.4% (Prev. 2.0%). French HICP Final (Jul MM) 0.6% vs. Exp. 0.6% (Prev. -0.3%). German Wholesale Prices (Jul YY) 5.3% (Prev. 4.9%). German Wholesale Prices (Jul MM) 0.2% vs. Exp. 0.4% (Prev. -0.7%). Swiss GDP Growth Rate Flash (Q2) Q/Q 1.5% vs. Exp. 0.3% (Prev. 0.4%). Polish Core CPI (Jul YY) 3.1% vs. Exp. 3.1% (Prev. 3.0%). NOTABLE HEADLINES Reform UK leader Farage wins Clacton by-election with 22,293 votes. TRADE/TARIFFS Mexico will reportedly impose a duty on imports of ammonium sulfate from China. CENTRAL BANKS BoJ is reportedly set to raise interest rates as soon as September and also considering accelerating subsequent hikes, according to reported. CNB Minutes (Aug. 6) meeting states that the Board assessed the current monetary policy stance as appropriate; Governor Michl said the June interest rate hike had further tightened monetary conditions, making it possible to continuously evaluate new data. GEOPOLITICS MIDDLE EAST US ambassador to Lebanon said negotiations between Lebanon and Israel will be completed, but a date has not yet been set, Al Jazeera reported. Yemeni armed forces launched new drone strikes against Saudi-backed troops in several areas in Yemen, Press TV reported. Pakistan's Foreign Minister tells the US Ambassador that the MoU with Iran must be implemented "in letter and spirit" and that implementation is the only way forward, Al Hadath reported. Iranian MP Jowkar said the US "thinks it can push us back by intensifying the maritime blockade... conditions will not return to before the 40-day war, and control of the Strait of Hormuz will remain with Iran.", Iran International reported. Hezbollah chief to deliver a speech at 16:30 BST/ 11:30 ET, Mehr News reported. Pakistan's deputy PM said the Islamabad MoU is the "only way forward". Iranian Shura Council approved the principles of a draft to secure the Strait of Hormuz and ban the transit of the equipment of hostile states through it, Al Mayadeen reported. White House deputy national security adviser Andy Baker will leave the administration in coming weeks, Axios reported. Baker was among the officials most involved in foreign-policy and national-security decision-making over the previous 18 months. A source close to Baker said he wants to spend more time with his family and stayed on months longer than planned. Japanese Regional Coast Guard said four Chinese ships intruded into Japanese territorial waters, Kyodo reported. Occured around the Senkaku Islands. UKMTO said a tanker was struck by a drone while transiting outbound through the Strait of Hormuz. "UKMTO has received a report of an incident in the Strait of Hormuz. UKMTO has received reported from Military Authorities that a tanker was struck by a Uncrewed Ariel Vehicle (UAV) whilst conducting an outbound transit of the Strait of Hormuz. The vessel was subject to minor damage, crew are reported as safe and accounted for and no environmental impact has been reported. Vessels are advised to transit with caution and report any suspicious activity to UKMTO.". Iranian Foreign Ministry spokesman Baghaei said a possible agreement with Oman on a new shipping route through the Strait of Hormuz will not, by itself, mean the strategic waterway will reopen, Press TV reported. Stresses that its reopening depends on separate security and sovereignty consideration. US CENTCOM commander met with Saudi Crown Prince and the two spoke about regional developments, Fars news reported citing Saudi press; both sides reviewed defense relations and cooperation between Riyadh and Washington. NATO HQ confirms allied jets were scrambled after a drone entered Latvian airspace, according to reported. Airstrikes hit separatist militant group in Erbil, Iraq, according to Tehran Times. RUSSIA-UKRAINE Ukraine's military confirms it struck the Ust-Luga complex in Russia's Leningrad region. Oil export loadings at Russia’s Ust-Luga port (~700k BPD) were unaffected by a drone attack, sources say. Novatek’s Ust-Luga gas condensate processing complex was damaged in the 14th August attack. Romania’s Defence Ministry said a drone that was not detected by radar fell on Romanian territory near the border with Ukraine. Russia's Foreign Ministry said it has not received a proposal from Turkey on a ceasefire with Ukraine in the Black Sea; there can be no return to the 2022-23 Black Sea initiative. Russia's Foreign Minister Lavrov said an immediate ceasefire in Ukraine is not possible, IFX reported. Ukrainian official said if a ceasefire is implemented in the Black Sea region, Ukraine could restore grain exports through its seaports within one month. NOTABLE NORTH AMERICAN NEWS Multiple US officials told POLITICO that "more West Wing departures are coming before the end of the year". NORTH AMERICAN DATA US Retail Sales (Jul MM) -0.6% vs. Exp. 0.1% (Prev. 0.2%). US Retail Sales (Jul YY) 5% (Prev. 6.7%). US Retail Sales Ex Autos (Jul MM) -0.3% vs. Exp. 0.2% (Prev. -0.2%). US Retail Sales Control Group (Jul MM) -0.4% vs. Exp. 0.3% (Prev. 0.4%). US Retail Sales Ex Gas/Autos (Jul MM) -0.2% (Prev. 0.4%) Canadian Capacity Utilization (Jun) 82.3% (Prev. 82.5%). Canadian Wholesale Sales Final (Jun MM) 2.8% vs. Exp. 2.7% (Prev. 0.0%). Canadian Manufacturing Sales Final (Jun MM) 0.1% vs. Exp. -0.1% (Prev. 1.3%).