Stocks open higher on Trump tariff carve-out

EU mid-market update: Stocks open higher on Trump tariff carve-out and Russia confirming Trump-Putin meeting next week; BoE in focus; SoftBank confirms Stargate project start takes longer than planned.

Notes/observations

- Europe rises on Trump confirmation that semiconductors will be exempt from the impending 100% tariff if businesses invest or build in the US; However, specifics are still pending before a formal announcement. Trump also increased India's tariff by 25% (to 50%) on purchases of Russian crude and has not ruled out secondary sanctions against China for comparable purchases.

- Tier 1 analysts view Trump's 100% chip tariffs positively for semiconductors and wafer fab equipment due to Apple exemption, noting exemptions favor US manufacturing and certain assembly activities, while Swiss subsystem manufacturers are unlikely to be exempt, and companies like Logitech, Nokia, and Ericsson may qualify for full exemptions due to US manufacturing or capacity expansion.

- Trump said there is a good chance he will meet with Putin and Zelenskiy soon; Kremlin confirmed this morning, giving tailwinds to US futures

- UK FTSE100 underperforms into BOE decision at 07:00 ET (11:00 GMT); Expected to cut Bank Rate by 25bps to 4.00%.

- After earnings, Maersk's CEO noted that the shipping industry is currently experiencing uncertainty with a wait-and-see approach from customers, while rising freight rates and resilient demand, especially from China, suggest that tariffs may ultimately present opportunities for logistics expansion. Meanwhile, WPP's CEO states that the challenging macro environment and uncertainty surrounding tariffs are causing clients to be distracted and unsure about their strategies, particularly regarding the secondary effects on pricing and consumer spending.

- Asia closed mixed with KOSPI outperforming +0.9%. EU indices -0.3% to +1.3%. US futures +0.3-0.6%. Gold +0.2%, DXY -0.1%; Commodity: Brent +0.4%, WTI +0.4%; Crypto: BTC +0.8%, ETH +2.6%.

Asia

- South Korea Jun Current Account Balance: $14.3B v $10.1B prior.

- Australia Jun Trade Balance (A$): 5.4B v 3.0Be; Exports M/M: +6.0% v -3.0% prior; Imports M/M: -3.1% v +3.3% prior.

- China July Trade Balance: $98.2B v $104.8Be; Exports Y/Y: 7.2% v 5.6%e; Imports Y/Y: +4.1% v -1.0%e.

Global conflict/tensions

- President Trump intends to meet in person with President Vladimir V. Putin of Russia as soon as next week (**Reminder: US special envoy Witkoff met with President Putin for the fifth time this year on Wednesday).

Europe

- Swiss govt Federal Council to hold extraordinary meeting following the return of officials from the US.

Trade

- President Trump stated to impose a tariff of about 100% on semiconductor chips imported from countries not producing in America or planning to do so.

- President Trump has increased US tariffs on India to 50 per cent as he tries to force President Putin to agree to a ceasefire in Ukraine by stopping countries from buying Russian oil.

Speakers/fixed income/fx/commodities/erratum

Equities

Indices [Stoxx600 +0.62% at 544.46, FTSE -0.33% at 9,134.27, DAX +1.32% at 24,220.99, CAC-40 +0.91% at 7,704.39, IBEX-35 +0.71% at 14,628.50, FTSE MIB +0.58% at 41,249.00, SMI +1.02% at 11,854.03, S&P 500 Futures +0.54%].

Market focal points/key themes: European earnings opened generally higher and advanced through the early part of the session; FTSE notable exception ahead of BOE decision; recent tariff announcements not being as bad as feared apparently supporting risk appetite; among sectors leading the way higher are financials and technology; lagging sectors include telecom and health care; focus on BOE rate decision later in the day; earnings expected in the upcoming US session include Eli Lilly, Gilead, Crocs, DataDog, ConocoPhillips and Parker-Hannifin.

Equities

- Consumer discretionary: InterContinental Hotels Group [IHG.UK] +6.5% (earnings).

- Healthcare: Merck KGaa [MRK.DE] -2.5% (earnings).

- Industrials: Maersk [MAERSKB.DK] +4.5% (raises outlook; CEO comments), Siemens [SIE.DE] +0.5% (earnings; book-to-bill ratio jump), Rheinmetall [RHM.DE] -4.5% (earnings; Russia confirmed Trump-Putin meeting).

- Telecom: WPP [WPP.UK] -4.0% (earnings; dividend cut; strategy review), Deutsche Telekom [DTE.DE] -2.5% (earnings), Swisscom [SCMN.CH] +1.5% (earnings).

Speakers

- ECB Economic Bulletin reaffirmed its data-dependent, meeting-by-meeting approach, not pre-committing to a rate path.

- Russia Govt aid Ushakov confirmed that an agreement to hold a meeting between Trump and Putin had been reached.

- Russia Security Council Sec Shoigu said to have met Indian officials; seek active cooperation.

- Japan govt confirmed to cut GDP forecast for FY26 from 1.2% to 0.7% (**Note: in-line with BOJ and IMF views).

Currencies/fixed income

Hopes. Trump trade tariffs and concerns over Fed independence were also factrs in the greenback’s soft sentiment.

- EUR/USD edging towards the 1.17 area

- GBP/USD at 1.3370 with focus on the BOE rate decision later today and was widely expected to cut its key Bank Rate by 25 bps to 4.00%. Focus to be on the vote split and the accompanying economic projections. Some analysts noted that there could be two MPC members supporting a larger 50 bps move and possibly up to two policymakers voting for unchanged policy.

- USD/JPY back around the 147 area by mid-session after testing 146.70 during Asia trading.

- 10-year German Bund yield at 2.64% and 10-year Gilt yield at 4.52%. 10-year Treasury yield: 4.24%.

Economic data

- (DE) Germany Jun Industrial Production M/M: -1.9% v -0.5%e; Y/Y: -3.6% v -1.0%e.

- (DE) Germany Jun Trade Balance: €14.9B v €17.3Be; Exports M/M: 0.8% v 0.4%e; Imports M/M: 4.2% v 0.8%e.

- (UK) July Halifax House Price Index M/M: 0.4% v 0.0% prior; Y/Y: 2.4% v 2.5% prior.

- (NO) Norway Jun Industrial Production M/M: -0.1% v -0.5% prior; Y/Y: -7.1% v -0.4% prior.

- (NO) Norway Manufacturing Production M/M: -0.1% v -1.6% prior; Y/Y: 4.2% v 5.9% prior.

- (SE) Sweden July Preliminary CPI M/M: 0.2% v 0.3%e; Y/Y: 0.8% v 0.9%e.

- (SE) Sweden July Preliminary CPIF M/M: 0.3% v 0.4%e; Y/Y: 3.0% v 3.0%e.

- (SE) Sweden July Preliminary CPIF (ex-energy) M/M: 0.2% v 0.2%e; Y/Y: 3.1% v 3.2%e.

- (SE) Sweden July Budget Balance (SEK): +20.1B v -81.7B prior.

- (ZA) South Africa July Net Reserves: $65.1B v $65.2B prior; Gross Reserves: $69.2B v $68.4B prior.

- (FR) France Jun Trade Balance: -€7.6B v -€7.6B prior; Current Account Balance: -€3.4B v -€2.6B prior.

- (FR) France Q2 Preliminary Wages Q/Q: 0.5% v 0.7% prior.

- (CH) Swiss July Unemployment Rate: 2.7% v 2.7%e; Unemployment Rate (seasonally adj): 2.9% v 2.9%e.

- (CH) Swiss July Foreign Currency Reserves (CHF): 716.4B v 713.1B prior.

- (CZ) Czech Jun Retail Sales (ex-auto) Y/Y: 4.5% v 4.9%e.

- (MY) Malaysia end-July Foreign Reserves: $121.3B v $120.9B prior.

- (CZ) Czech July International Reserves: $161.3B v $161.9B prior.

- (CN) China July Foreign Reserves: $3.292T v $3.281Te.

- (HK) Hong Kong July Foreign Reserves: $425.4B v $431.9B prior.

- (SG) Singapore July Foreign Reserves: $397.3B v $405.0B prior.

Fixed income issuance

- (ES) Spain Debt Agency (Tesoro) sold total €4.498B vs. €4.0-5.0B indicated range in 2028, 2035 and 2043 SPGB bonds.

- Sold €1.675B in 2.4% May 2028 SPGB bonds; Avg Yield: 2.166% v 2.159% prior; bid-to-cover: 2.24x v 1.91x prior (July 3rd 2025).

- Sold €1.602B in 3.20% Oct 2035 SPGB bonds; Avg Yield: 3.199% v 3.303% prior; bid-to-cover: 2.12x v 1.98x prior (July 17th 2025).

- Sold €1.221B in 3.45% July 2043 SPGB bonds; Avg Yield: 3.758% v 3.900% prior; Bid-to-cover: 2.15x v 1.76x prior.

- (ES) Spain Debt Agency (Tesoro) sold €490M vs. €250-750M indicated range in 1.0% Nov 2030 inflation-linked bonds (SPGBei); Real Yield: 0.810% v 0.721% prior; Bid-to-cover: 2.83x v 2.16x prior.

- (FR) France Debt Agency (AFT) sold total €10.499B vs. €8.5-10.5B indicated range in 2034, 2036, 2040 and 2055 bonds.

- Sold €4.580B in 1.25% May 2034 Oat; Avg Yield: 3.17% v 3.77% prior, bid-to-cover: 2.47x v 1.98x prior.

- Sold €2.3.96B in 1.25% May 2036 Oat; Avg Yield: 3.41% v 3.27% prior; Bid-to-cover: 2.93x v 3.15x prior.

- Sold €2.175B in 0.50% May 2040 Oat; Avg Yield: 3.70% v 3.17% prior; bid-to-cover: 3.30x v 2.31x prior.

- Sold €1.348B in 4.00% Apr 2055 Oat; Avg Yield: 4.09% v 3.49% prior; Bid-to-cover: 2.96x v 2.02x prior.

Looking ahead

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell combined HUF35B in 3-year, 5-year and 10-year bonds.

- 05:40 (UK) BOE 7-day short-term repo operation (STR).

- 06:00 (IL) Israel Jan Chain Store Sales Y/Y: No est v 0.4% prior.

- 06:00 (IE) Ireland July Unemployment Rate: No est v 4.0% prior.

- 06:00 (IE) Ireland July CPI M/M: No est v 0.5% prior; Y/Y: No est v 1.8% prior.

- 06:00 (IE) Ireland July CPI EU Harmonized M/M: No est v 0.5% prior; Y/Y (final): No est v 1.6% prelim.

- 06:00 (FI) ECB's Rehn (Finland) on Geopolitics in Mikkeli, Finland.

- 07:00 (UK) Bank of England (BOE) Interest Rate Decision: Expected to cut Bank Rate by 25bps to 4.00%.

- 07:00 (UK) Bank of England (BOE) Aug Minutes.

- 07:00 (UK) Bank of England (BOE) Monetary Policy Report.

- 07:00 (ZA) South Africa Jun Electricity Production Y/Y: No est v 2.3% prior; Electricity Consumption Y/Y: No est v -0.4% prior.

- 07:00 (BR) Brazil July FGV Inflation IGP-DI M/M: -0.1%e v -1.8% prior; Y/Y: 2.9%e v 3.8% prior.

- 07:30 (UK) Bank of England (BOE) Gov Baily post rate decision press conference.

- 08:00 (PL) Poland July Official Reserves: No est v $247.6B prior.

- 08:00 (MX) Mexico July CPI M/M: 0.3%e v 0.3% prior; Y/Y: 3.5%e v 4.3% prior.

- 08:00 (MX) Mexico July CPI Core M/M: 0.3%e v 0.4% prior; Y/Y: 4.2%e v 4.2% prior.

- 08:00 (MX) Mexico July Vehicle Production: No est v 361.0K prior; Vehicle Exports: No est v 331.5K prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:30 (US) Q2 Preliminary Nonfarm Productivity: +2.0%e v -1.5% prior; Unit Labor Costs: 1.5%e v 6.6% prior.

- 08:30 (US) Initial Jobless Claims: 220Ke v 218K prior; Continuing Claims: 1.95Me v 1.946M prior.

- 08:30 (CL) Chile July Trade Balance: $0.5Be v $1.3B prior; Exports: No est v $8.3B prior; Imports: No est v $7.0B prior; Copper Exports: No est v $4.7B prior.

- 08:30 (CL) Chile July International Reserves: No est v $46.4B prior.

- 08:30 (CZ) Czech Central Bank (CNB) Interest Rate Decision: Expected to leave 2-Week Repurchase rate unchanged at 3.50%.

- 08:30 (US) Weekly USDA Net Export Sales.

- 09:00 (RU) Russia Gold and Forex Reserve w/e Aug 1st: No est v $695.5B prior.

- 09:00 (RU) Russia July Official Reserve Assets: No est v $688.7B prior.

- 09:00 (CL) Chile Jun Nominal Wage Y/Y: No est v 8.2% prior.

- 09:00 (UK) Bank of England (BOE) Decision Maker Panel (DMP) July Survey: 1-year ahead CPI Expectations: 3.3%e v 3.3% prior.

- 09:00 (CZ) Czech Central Bank (CNB) post rate decision press conference.

- 09:00 (FI) ECB's Rehn (Finland) with former BOE Gov King in Mikkeli, Finland.

- 10:00 (US) Jun Final Wholesale Inventories M/M: 0.2%e v 0.2% prelim; Wholesale Trade Sales M/M: 0.2%e v 0.2% prior.

- 10:00 (CA) Canada July Ivey Purchasing Managers Index : No est v 53.3 prior; PMI (unadj): No est v 54.6 prior.

- 10:00 (BR) Brazil July Vehicle Production: No est v 200.8K prior; Vehicle Sales: No est v 212.9K prior; Vehicle Exports: No est v 50.7K prior.

- 10:00 (US) Fed’s Bostic.

- 10:30 (US) Weekly EIA Natural Gas Inventories.

- 10:30 (TR) Turkey July Cash Budget Balance (TRY): No est v -455.1B prior.

- 11:00 (US) July NY Fed 1-yer Inflation Expectations: No est v 3.0% prior.

- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.

- 12:00 (CA) Canada to sell 10 Year Bonds.

- 13:00 (US) Treasury to sell 430-Year Bonds.

- 15:00 (MX) Mexico Central Bank (Banxico) Interest Rate Decision: Expected to cut Overnight Rate by 25bps to 7.75%.

- 15:00 (US) Jun Consumer Credit: $7.2Be v $5.1B prior.

- 19:30 (JP) Japan Jun Household Spending Y/Y: 2.7%e v 4.7% prior.

- 19:50 (JP) Japan Jun Current Account Balance: ¥1.086Te v ¥3.436T prior; Adjusted Current Account Balance: ¥2.751Te v ¥2.818T prior; Trade Balance (BOP Basis): +¥402.1Be v -¥522.3B prior.

- 19:50 (JP) BOJ Summary of Opinions.

- 19:50 (JP) Japan July Bank Lending Y/Y: No est v 2.8% prior; Bank Lending (Ex-Trusts) Y/Y: No est v 3.0% prior.

- 23:00 (ID) Indonesia July Consumer Confidence: No est v 117.8 prior.

- 23:30 (JP) Japan to sell 3-Month Bills.