Nvidia beats yet again – Kyiv saw first missile attack since Alaska summit

EU mid-market update: Nvidia beats yet again; Kyiv saw first missile attack since Alaska summit; Road ahead sees Fed's Waller speech today, US PCE data on Fri and return of liquidity as holiday period ends.

Notes/observations

- Nvidia shares down ~2% after Q2 top and bottom-line beat (23rd consecutive beat). Data center rev was at higher end of analyst range, gaming rev slows pace of quarterly growth, gross margin above consensus but excludes H20 charge; Q3 guidance was strong again but assumes zero H20 shipments to China; Additional $60B buyback.

- Euro is flat despite French political risks; France deficit concerns persist, but IMF bailout seen unlikely; Bond markets show no liquidity stress; Polymarket betting market prices 94% that French PM Bayrou to step down by end-Sept and 92% chance that no-confidence vote succeeds on Sept 8th.

- Gold is supported by Fed independence concerns as Trump seeks to oust Gov Cook. On the other side, some analysts point to Powell’s Jackson Hole framing treats tariffs as a fading level shock with anchored expectations, but a new minimum-tariff architecture, accelerating services prices, drifting household expectations, loose financial conditions, and still-tight services labor point to stickier inflation dynamics. That mix risks replaying the 1970s stop-go and 1998 insurance-cut mistakes, producing a ratchet-and-drift inflation profile over the next 12 to 15 months unless the Fed credibly leans against persistent services inflation rather than just headline prints.

- Bitcoin higher as risk sentiment improved on Fed rate cut expectations and PCE data due Friday.

- US retailer Five Below described its price/inventory strategy during earnings call: Retailers are outrunning tariffs by rebasing assortments onto a few whole-number price rungs ($1/$3-4/$5/$10), pre-buying against policy cliffs, and using pack-size engineering to “hold the rung,” which slashes repricing latency, returns store labor, reduces errors, and preserves conversion when costs jump.

- EU Earnings Recap: Delivery Hero Q2 GMV missed consensus, H1 EBITDA ahead; Raised full-year GMV/revenue guidance but cut EBITDA outlook ~7% below market due to FX. Pernod Ricard FY26 guidance viewed as soft, with Q1 sales expected to decline despite H2 improvement, management pledged to defend margins, interpreted as signaling potential margin decline; FY25 results slightly beat expectations on Asia and rest of world strength, offsetting a small miss in Americas. It said it is going to resume cognac sales in China in Q2.

- Microsoft to present later this morning at Deutsche Bank conference.

- Asia closed mixed with Shanghai Composite outperforming +1.1%. EU indices -0.4% to +0.6%. US futures +0.2% to -0.1%. Gold +0.1%, DXY -0.1%; Commodity: Brent -0.5%, WTI -0.5%; Crypto: BTC +2.1%, ETH +0.1%.

Asia

- Bank of Korea (BOK) left 7-Day Repo Rate unchanged at 2.50% (as expected). Statement noted to closely monitor changes in domestic and external policy conditions. Reiterated to maintain its rate cut stance and to adjust timing and pace of any further base rate cuts. To remain cautious of increased exchange rate volatility.

- Bank of Korea (BOK) Gov Rhee post rate decision press conference noted that the decision to keep policy steady was not unanimous (6-1) with dissenter seeking a 25bps cut. 5 of 6 members now open to rate cut in the next 3 months [prior:4 of 6]. Easing stance to stay through at least H1 of 2026.

- BOK updated its Staff Projections which raised 2025 GDP Growth forecast from 0.8% to 0.9% while maintaining 2026 GDP growth forecast at 1.6%. Projections raised 2025 CPI forecast from 1.9% to 2.0% and raised 2026 CPI forecast from 1.8% to 1.9%.

- New Zealand Aug ANZ Business Confidence: 49.7 v 47.8 prior.

- Australia Q2 Private Capital Expenditure: +0.2% v -0.1% prior.

- Japan 2-year JGB auction result saw a poorly received one with low bid-to-cover, wider tail.

Americas

- White House Trade Advisor Navarro noted India could get 25% off its tariffs if it stopped buying Russian oil. Had to stop India and China from buying Russian oil. Appeared to be a slam dunk case against the Fed's Cook; This was due process; Cook weaponized the Fed.

Trade

- Japan trade negotiator Akazawa cancelled plans to visit the US this week citing "administrative matter",. Had no immediate plan for next visit.

Energy

- UK, Germany and France (E3) said to be preparing to reimpose sanctions on Iran as hopes fade of a diplomatic breakthrough.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.08% at 555.20, FTSE -0.34% at 9,224.45, DAX +0.16% at 24,091.05, CAC-40 +0.67% at 7,795.52, IBEX-35 +0.02% at 15,028.38, FTSE MIB +0.31% at 42,480.00, SMI +0.09% at 12,226.39, S&P 500 Futures +0.08%].

Market focal points/key themes: European indices open higher across the board but quickly turned around to trade mixed; market sentiment seen fragile after Nvidia earnings and political situation in France; better performing sectors include materials and industrials; among underperforming sectors are utilities and health care; Barclays sells stake in Entercard to Swedbank; focus on release of ECB minutes and second reading of US GDP; earnings expected in the upcoming Americas session include Hormel Foods, Autodesk, and Dell Technologies.

Equities

- Consumer discretionary: Pernod Ricard [RI.FR] +8.5% (earnings; Q1 outlook; to resume cognac sales in China), Delivery Hero [DHER.DE] -0.5% (earnings), Air France KLM [AF.FR] +1.0% (debt offering; French Fin Min comments).

- Energy: Drax Group [DRX.UK] -10.5% (FCA probe).

- Healthcare: Qiagen [QIA.DE] -1.5% (offering).

- Industrials: Strabag [STB1.DE] -2.5% (earnings).

- Technology: ASML [ASML.NL] -0.5% (Nvidia results; outlook on next year).

Speakers

- ECB Rehn (Finland) stated that Council stood ready to act if needed; Trump's escalating attacks on Fed could have substantial and global knock-on effects on the financial markets and the real economy.

- France Fin Min Lombard stated that public deficit would be on target in 2025; Did not see the possibility of the French financial crisis. Have no problem financing the economy; tap the markets frequently.

- Poland Central Bank (NBP) Member Duda: Not ruling out 25bps rate cut in Sept.

- BOJ Nakagawa noted that risk of being behind the curve was not high at this time; to make decisions based upon data. Environment for rate hike had improved since April.

- Philippines Central Bank Gov post rate decision press conference noted that policy rate at Goldilocks level; less dovish than before.

Currencies/fixed income

- FX markets were quite tame in the session despite a pickup in economic releases. Market awaiting 2nd reading of US Q2 GDP data as well as weekly jobless claims for insights on Fed rate path. Currently markets forecasting approx 90 probability that the Fed would resume easing in Sept.

- EUR/USD at 1.1635 with focus on the French political situation with the French-German 10-year spread at 80bps.

- USD/JPY moved lower after BOJ Nakagawa reaffirmed the BOJ’s preference to raise interest rates. Pair at 147.30 by mid-session.

- 10-year German Bund yield at 2.69% and 10-year Gilt yield at 4.71% 10-year Treasury yield: 4.22%.

Economic data

- (EU) Euro Zone July EU27 New Car Registrations: +7.4% v -7.3% prior.

- (NL) Netherlands Aug Producer Confidence: -2.2 v -4.9 prior.

- (FI) Finland July House Price Index M/M: +0.2 v -0.6% prior; Y/Y: -0.9% v -1.4% prior.

- (FI) Finland Jun Final Trade Balance: €0.5B v €0.5B prelim.

- (SE) Sweden July Trade Balance (SEK): 4.5B v 12.6B prior.

- (HU) Hungary July Unemployment Rate: 4.3% v 4.4%e.

- (PH) Philippines Central Bank (BSP) cut Overnight Borrowing Rate by 25bps to 5.00% (as expected).

- (CH) Swiss Q2 GDP Q/Q: 0.1% v 0.1%e; Y/Y: 1.2% v 1.3%e; GDP (final sports adj) Q/Q: 0.1% v 0.1% prelim.

- (SE) Sweden Aug Consumer Confidence: 91.1 v 90.8 prior; Manufacturing Confidence: 97.0 v 95.8 prior.

- (TR) Turkey Aug Economic Confidence: 97.9 v 96.3 prior.

- (TR) Turkey July Trade Balance: -$6.4B v -$8.2B prior.

- (EU) Euro Zone July M3 Money Supply Y/Y: 3.4% v 3.5%e.

- (IT) Italy Aug Consumer Confidence: 96.2 v 97.3e; Manufacturing Confidence: # v 86.6e.

- (PT) Portugal Aug Consumer Confidence: -16.2 v -15.7 prior; Economic Climate Indicator: 2.9 v 2.8 prior.

- (EU) Euro Zone Aug Economic Confidence: 95.2 v 96.0e.

- (IT) Italy Jun Industrial Sales M/M: +1.2% v -2.1% prior; Y/Y: +0.3% v -1.8% prior.

- (IS) Iceland Aug CPI M/M: -0.2% v +0.3% prior; Y/Y: 3.8% v 4.0% prior.

Fixed income issuance

- (IN) India sold total INR210B vs. INR210B indicated in 3-month, 6-month and 12-month bills.

- (IT) Italy Debt Agency (Tesoro) sold total €6.0B vs. €5.25-6.0B indicated range in 5-year and 10-year BTP Bonds.

- Sold €2.75B vs. €2.5-2.75B indicated range in 2.7% Oct 2030 BTP bonds; Avg Yield: 2.80% v 2.80% prior; Bid-to-cover: 1.51x v 1.72x prior.

- Sold €1.25B vs. €1.0-1.25B indicated range in 3.65% Aug 2035 BTP bonds; Avg Yield: 3.54% v 3.83% prior; bid-to-cover: 1.85x v 1.66x prior.

- Sold €2.0B vs. €1.75-2.0B indicated range in 3.60% Oct 2035 BTP bonds; Avg Yield: 3.58% v 3.52% prior; bid-to-cover: 1.63x v 1.59x prior.

- (IT) Italy Debt Agency (Tesoro) sold €2.0B vs. €1.5-2.0B indicated range in Apr 2034 Floating Rate Notes (CCTeu); Real Yield: 3.19% v 3.13% prior; bid-to-cover 1.59x v 1.68x prior.

Looking ahead

- (EG) Egypt Central Bank Interest Rate Decision: Expected to cut Deposit Rate by 100bps to 23.00%.

- (BR) Brazil July Central Govt Budget Balance (BRL):-58.7e v -44.3B prior.

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

- 05:30 (ZA) South Africa July PPI M/M: 0.7%e v 0.2% prior; Y/Y: 1.4%e v 0.6% prior.

- 05:30 (BE) Belgium Aug CPI M/M: No est v 0.5% prior; Y/Y: No est v 1.9% prior.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills.

- 06:00 (FI) Finland to sell Bonds via Ori auction.

- 06:00 (RO) Romania to sell RON500M in 6.75% Apr 2035 Bonds.

- 06:00 (VN) Vietnam Finance Ministry announcement on upcoming bond issuance (held on Wed).

- 06:30 (IN) India July Industrial Production Y/Y: 2.3%e v 1.5% prior.

- 07:00 (BR) Brazil Aug FGV Inflation IGPM M/M: No est v -0.8% prior; Y/Y: No est v 2.96% prior.

- 07:30 (EU) ECB Publishes Account of July 23-24 Rate Decision (aka Minutes).

- 08:00 (PL) Poland National Bank (NBP) July Minutes.

- 08:00 (MX) Mexico July Unemployment Rate: 2.9%e v 2.7% prior.

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

- 08:30 (US) Q2 Preliminary GDP Annualized (2nd of 3 readings) Q/Q: 3.1%e v 3.0% advance; Personal Consumption: 1.6%e v 1.4% advance.

- 08:30 (US) Q2 Preliminary GDP Price Index: 2.0%e v 2.0% advance; Core PCE Price Index Q/Q: 2.6%e v 2.5% advance.

- 08:30 (US) Initial Jobless Claims: 230Ke v 235K prior; Continuing Claims: 1.97Me v 1.972M prior.

- 08:30 (CA) Canada Q2 Current Account Balance: No est v -$2.1B prior.

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

- 09:00 (RU) Russia Gold and Forex Reserve w/e Aug 22nd: No est v $686.5B prior.

- 10:00 (US) July Pending Home Sales M/M: -0.2%e v -0.8% prior; Y/Y: +0.1%e v -0.3% prior.

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

- 11:00 (US) Aug Kansas City Fed Manufacturing Activity: 0e v +1 prior.

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

- 12:00 (CA) Canada to sell 2-year Bonds.

- 13:00 (US) Treasury to sell 7-year Notes.

- 18:00 (NZ) New Zealand Aug ANZ Consumer Confidence: No est v 94.7 prior.

- 18:00 (US) Fed's Waller on Monetary Policy.

- 19:00 (KR) South Korea July Industrial Production M/M: 0.2%e v 1.6% prior; Y/Y: 3.9%e v 1.6% prior; Cyclical Leading Index: No est v 0.2 prior.

- 19:01 (UK) Aug Lloyds Business Barometer: No est v 52 prior; Own Price Expectations: No est v 61 prior.

- 19:30 (JP) Japan July Jobless Rate: 2.5%e v 2.5% prior; Job-To-Applicant Ratio: 1.23e v 1.22 prior.

- 19:30 (JP) Japan Aug Tokyo CPI Y/Y: 2.6%e v 2.9% prior; CPI (ex-fresh food) Y/Y: 2.5%e v 2.9% prior; CPI (ex-fresh food/energy) Y/Y: 3.0%e v 3.1% prior.

- 19:50 (JP) Japan July Preliminary Industrial Production M/M: -1.1%e v +2.1% prior; Y/Y: -0.6%e v +4.4% prior.

- 19:50 (JP) Japan July Retail Sales M/M: -0.2%e v +0.9% prior (revised from 1.0%); Y/Y: 1.6%e v 1.9% prior (revised from 2.0%); Dept. Store, Supermarket Sales Y/Y: No est v -0.1% prior.

- 20:30 (NZ) RBNZ chief economist Conway.

- 21:00 (PH) Philippines July Trade Balance: -$4.3Be v -$4.0B prior; Exports Y/Y: 10.7%e v 26.1% prior; Imports Y/Y: 1.0%e v 10.8% prior.

- 21:30 (AU) Australia July Private Sector Credit M/M: 0.6%e v 0.6% prior; Y/Y: No est v 6.8% prior.

- 22:00 (SG) Singapore July M2 Money Supply Y/Y: No est v 7.8% prior; M1 Money Supply Y/Y: No est v 9.7% prior.

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