Squawk Box Europe Express

ECB officials attending the central bank’s annual forum in Sintra have played down talk of rate cuts. We hear from ECB chief economist Philip Lane who says the bank must remain data-dependent when making rate decisions. U.S. housing and consumer data shows resilience but Chinese industrial further declines by double digits. On Wall Street, the Dow breaks a six-session losing streak to stay on track to record its best month since November. Resurgent tech stocks have pushed the Nasdaq towards its best H1 for forty years. In banking news, UBS is reportedly ready to cut Credit Suisse staff by half starting next month.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Russian President Vladimir Putin makes his first public remarks since the abandoned coup by the PMC Wagner Group at the weekend. Chinese Premier Li Qiang addresses the ‘Summer Davos’ in Tianjin, calling form more foreign direct investment and warns against global economic fragmentation. We are live in Sintra, Portugal for the ECB’s annual summit where the Bank of Lithuania governor Gediminas Šimkus tells us the there is some way to go for the current rate-hiking cycle. In the U.S., the Dow sees its longest losing streak since September last year. Investors have profited on well performing tech stocks. The VIX hits its lowest level since before the pandemic.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Russian President Vladimir Putin’s grip on power is severely tested over the weekend after the private military company Wagner Group marches on Moscow before performing an abrupt u-turn. Asian equities remain sanguine despite the tumult as the Wall Stret rally recedes. Oil, however, is slightly higher. We are live at the first ‘summer’ Davos in Tianjin since the Covid pandemic. And in Greece, Kyriakos Mitsotakis’s New Democracy party secures a landslide victory, winning enough parliamentary seats to govern outright.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Tech stocks u-turn on Wall Street but the Nasdaq is on course for its worst run since April. The Bank of England raised rates by 50bps but Governor Andrew Bailey played down fears of a looming UK recession. Siemens Energy shares fall sharply lower after it scrapped its FY outlook upon discovering further technical problems within its turbine unit Gamesa. The company warns it now faces costs of €1bn. The White House welcomes Indian Prime Minister Narendra Modi and unveils a slew of new partnership deals between Washington and New Delhi.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The S&P 500 records its worst session this month while short positions on U.S. shares hit their highest level in more than a year. U.S. Federal Reserve Chairman Jerome Powell tells the House Financial Services Committee that efforts to rein in inflation are far from over. The Bank of England faces pressure do the same after a shock inflation print sends two-year gilts surging to a 15-year high. In the wake of the collapse of Credit Suisse, the SNB has called for more robust capital buffers and a framework to stabilise or wind down important lenders. And in retail news, the FTC sues Amazon, accusing it of duping customers into subscribing to its Prime service without their consent.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The recent U.S. equities rally runs out of steam as investors lock in profits and mull the rates forecast before Fed Chair Jerome Powell testifies in front of Congress later this week. UK Chancellor of the Exchequer Jeremy Hunt rules out offering government mortgage relief as he meets with bank chiefs to discuss spiralling repayments. Softbank CEO Masayoshi Son makes bullish comments about potential A.I. benefits, shifting the company to an offensive position. Deutsche Post DHL CEO plays down concerns about de-globalisation, telling CNBC that reliance on China is very entrenched and hard to replace. And we are live in North Greenwich, London at the Ukraine Recovery Conference where Rishi Sunak is set to unveil a major new support package to Kyiv.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

China slashes two more key lending benchmarks for the first time in 10 months as the PBOC attempts to stimulate a stuttering economy. In a sign of potentially easing tensions between the U.S. and China, Secretary of State Antony Blinken meets with President Xi Jinping in Beijing and calls for further dialogue. In tech news, Intel signs off on a €30bn chip manufacturing factory in Germany, making it the largest FDI in the country. Chancellor Olaf Scholz has highlighted the need to de-risk from China. And Airbus inks the largest commercial aviation deal ever, selling 500 single-aisle planes to Indian budget airline Indigo.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. Secretary of State Antony Blinken arrives in China and holds “candid and constructive” talks with his counterpart Wang Yi. It’s the first visit of an American cabinet-level official for five years. Meanwhile, Goldman Sachs downgrades its FY GDP forecast for China. It quoted Beijing’s limited ability to boost stimulus. Asian equities start the week in the red as a result despite scoring their best weekly run in five months. AstraZeneca seeks to spin off its Chinese unit and to list separately in either Hong Kong or Shanghai as growing geo-political tensions pushes the pharma giant to seek a safe haven. And after a four-year pandemic hiatus, we are live at the Paris Airshow where Airbus and Boeing vie for new orders.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

All three major U.S. indices hit historically high averages ending the session more than 1 per cent in the green. The BoJ sticks to its guns and maintains negative rates despite inflation moving higher. The Nikkei is up in afternoon trade while the yen drops against the dollar. In Frankfurt, ECB President Christine Lagarde hikes euro zone rates to a 22-year high. Lagarde said there was no sign that the hiking cycle could be paused beyond the summer. European leaders attempt to woo the next Tesla gigafactory with CEO Elon Musk meeting with Italian Prime Minister Georgia Meloni before attending the Vivatech conference in Paris later today. And on Wall Street, restaurant chain Cava sees shares surge 100 per cent following its IPO.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Fed makes a hawkish pause but Chairman Jerome Powell warns of two more rate rises later this year in a bid to balance market expectations. The rate decision pushes the S&P 500 and Nasdaq off 13-month highs while U.S. treasuries waver. Bond king Jeffrey Gundlach tells CNBC that the Fed strategy remains flawed and delayed. The PBOC cuts a key policy rate which sees the yuan fall to a six-month low. The ECB is now set to hike rates yet again as inflation hovers above 6 per cent. And we are live at Vivatech in Paris where French President Emmanuel Macron tells us that countries must work together to draft coordinated regulation regarding A.I.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. inflation drops to its lowest level since in 2021 with investors anticipating a pause in rate hikes from the Fed. The S&P 500 and the Nasdaq respond by hitting 13-month highs and U.S. Treasuries yields also rise on investor optimism the hiking cycle may be coming to a close. In the UK, stronger-than-expected jobs data push short-term gilt yields to levels not seen since last year’s chaotic mini-budget. BoE governor Andrew Bailey admits that inflation in Britain is more stubborn than first thought. In tech news, chip maker AMD makes inroads into A.I., creating a new semi-conductor while Nvidia closes the session with a $1tn valuation for the first time ever – the seventh U.S firm to do so. We are live at Vivatech in Paris which is President Emmanuel Macron’s annual pitch to increase tech investment in France.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The S&P 500 closes at its highest level since April 2022 as investors anticipate a Fed rate hike pause later this week. Bank of America CEO Brian Moynihan tells our U.S. colleagues that the central bank cannot yet signal the end of the tightening cycle. In China, the PBOC cuts a key short-term policy for the first time in 10 months as its post-Covid recovery stutters and crude prices are impacted as a result. Intel is reportedly set to be an anchor investor in Arm’s Wall Street listing. The chip designer aims to raise $8-10bn later this year. Also in tech news, Oracle shares reach a record high after the company beats Q4 estimates. The FTC seeks to block Microsoft’s proposed $68.7bn deal for Activision over fears it may withhold or degrade the company’s games on rival platforms.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The S&P 500 enjoys its fourth straight week in the green ahead of this week’s Fed rate decision. The FOMC is expected to pause its hikes in order to assess ten consecutive interest rate increases. UBS completes its takeover of Credit Suisse marking a new historic chapter for the banking behemoth. In oil news, WTI slides below the pivotal $70-mark as demand concerns continue to grow. Saudi Arabian energy minister, Abdulaziz Bin Salman tells CNBC he is working within a difficult environment. Spain’s left-wing parties strike a last-minute deal to merge in next month’s general elections which could prove to be a boon for Socialist Prime Minister Pedro Sanchez.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

China’s post-Covid recovery stutters as factory prices nosedive at their fastest pace in seven years. Risk of deflation prompt calls for more government stimulus. The S&P 500 is up by 20 per cent since its low in October, sparking talk of a potential new bull market. Crypto exchange Binance suspends all U.S. dollar deposits in the wake of its SEC lawsuit. SEC chair Gary Gensler has slammed the crypto sector calling it rife with ‘hucksters’ and ‘fraudsters’. Meanwhile in Washington, President Biden hosts UK Prime Minister Rishi Sunak where the pair announced an ‘Atlantic Declaration’ which pledges to strengthen ties on clean energy and A.I. The deal, however, falls far short of an FTA between the two nations. And former U.S. President Donald Trump has been indicted on seven criminal charges in Miami over alleged mishandling of classified documents.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Bank of Canada surprises markets by hiking rates, becoming the second global central bank to take a hawkish turn ahead of next week’s Fed meeting. U.S. Treasury Secretary tells CNBC exclusively that strong American employment will not prevent inflation from being reined in back to target. Crypto exchange Coinbase’s CEO Brian Armstrong slams the SEC for moving to ring-fence the sector, saying that the case against his company should not be compared with procedures against Binance. UK Prime Minister Rishi Sunak is in Washington on a two-day trip where he is to meet with President Biden, seeking to play down trade tensions between the two countries. Volvo unveils its electric EX30 premium SUV as it plans for half of its products to be fully electric by 2030. We hear from CEO Jim Rowan who says that last year’s supply chain concerns are finally dissipating.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese exports disappoint in May by a wide margin as weak domestic forecasts and global consumption concerns weigh. U.S. indices rally, however, with fresh record highs for the S&P 500 and the Nasdaq. The VIX drops to its lowest intra-day level since before February 2020. The World Bank slashes its global growth forecast for next year, citing higher rates and tight credit conditions. Deputy Chief Economist Ayhan Kose tells CNBC that the world economy remains in a precarious situation. U.S. authorities clamp down on crypto, targeting Coinbase and freezing all U.S. assets globally owned by Binance. SEC Chairman Gary Gensler tells our U.S. colleagues that the sector’s business model must be regulated. And in sports news, the PGA Tour merges with Saudi-backed outfit LIV, ending all litigation between the factions.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Apple launches Vision Pro – its first mixed-reality product since it first entered the wearable category almost a decade ago. In crypto news, the SEC sues the world’s biggest exchange, Binance, as well as its CEO Changpeng Zhao for breaking security rules in the U.S. The RBA unexpectedly hikes rates by 25bps, warning that a soft landing still remains elusive for the Australian economy. ECB President Christine Lagarde admits that there are signs core inflation is moderating but says it is too early to announce price pressures have peaked in the euro zone.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Oil prices lift following Saudi Arabia’s pledge to cut supply by a further 1m bpd from July onwards. Speaking exclusively to CNBC, Prince Abdulaziz bin Salman said that the move was a precautionary measure. Friday’s Dow Jones session was the strongest since January, moving 700 points on news of a strong U.S. jobs report and President Biden signing the debt agreement into law. We also hear from IMF managing director Kristalina Georgieva in Dubrovnik who says that despite a stellar U.S. employment situation, it is still too early for the Fed to step back from its tightening cycle. ECB hawk and Croatian National Bank Governor Boris Vujčić echoes her words, saying that rate rises will only stop when the economic situation allows. We are also at the Shangri-La Dialogue in Singapore where German defence minister Boris Pistorius tells us that German weapons manufacturers are working non-stop to support Ukraine’s military endeavours against Russia.See Privacy Policy at https://art19.com/privacy and California Pr

The U.S. Senate votes to pass the debt ceiling agreement to send it onto President Biden to ratify, avoiding what would have been the first ever U.S. default. The news pushes Asian markets into the green. The Nikkei is now on course for its eighth consecutive week of gains while tech stocks lead the way on the Hang Seng in Hong Kong. Ukrainian President Volodomyr Zelenskyy puts pressure on NATO to forge a path for Kyiv’s accession with UK Prime Minister Rishi Sunak telling CNBC Ukraine rightfully belongs in the alliance. And crude prices are up ahead of this weekend’s Opec+ meeting but still track towards their worst week since early May.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The debt ceiling bill is approved by House Representatives, moving it onto the Senate. Hose Speaker Kevin McCarthy has warned Democrats he intends on making more cuts in coming years. Markets lower odds of a Fed rate hike in June after two officials say they are in favour of pausing this month. We are live in Moldova where 50 European leaders are meeting to discuss the war in Ukraine with President Volodomyr Zelenskyy expected to attend. Manufacturing activity in China recovers in May according to a private sector survey.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.