Squawk Box Europe Express

We are live in Rome where the centre-right coalition have won a clear majority with 43 per cent of the vote. Fratelli d’Italia leader Giorgia Meloni is now set to be Italy’s next prime minister. The opposition Democratic Party has conceded defeat with the fractured centre-left bloc struggling in the polls. In forex news, sterling falls to its lowest level against the dollar since 1971 as investors fear Chancellor Kwasi Kwarteng’s tax cuts cluster will increase the UK’s debt burden. The Dow has hit its lowest point this year as the global sell-off continues.

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Wall Street is in the red for a third consecutive day while European equities hit an 18-month low amid a slew of central bank tightening measures. Italy’s political parties hold their last rallies ahead of Sunday’s snap election. Brothers of Italy leader Giorgia Meloni says her party is ready to govern. The BoE is split with the UK government with one voting member questioning policy in tackling inflation. Chancellor Kwasi Kwarteng is set to slash taxes in his mini-budget. And at the UN, Russian foreign minister Sergei Lavrov walks out of the Security Council over alleged war crimes committed in Ukraine by Russia forces.  

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The U.S. Federal Reserve increases interest rates by 75bps for the third consecutive month. The rate is now at its highest level since early 2008. Chairman Jerome Powell warns that the there will be more rate moves to come to tackle inflation. U.S. equities are down and the 2-year Treasury yield has hit 4 per cent for the first time in 15 years. The BoJ, however, holds rates at record low levels. At the UN, U.S. President Joe Biden leads global condemnation of Russia’s partial military mobilisation and threats of nuclear strikes.  

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U.S. markets continue their sell-off with 2- and 10-year Treasury yields reaching new highs ahead of another large Fed rate hike. Hedge fund manager Leon Cooperman slams U.S. Fed chair Jerome Powell for “irresponsible fiscal monetary policy”. JP Morgan CEO Jamie Dimon gives a stormy economic forecast ahead of Congress appearances by bosses of the seven largest U.S. banks. Russian President Vladimir Putin is expected to give his first national address since the beginning of the Ukraine invasion. The Kremlin is likely to ramp up military operations in the country and to fast-track annexation referenda in four occupied territories. And in energy news, Berlin is set to complete the final stage of its takeover of troubled utility Uniper, also providing a further €8bn in support measures.

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U.S. markets are braced for the Fed’s policy meeting starting today, breaking a two-day losing streak and pushing the 10-year Treasury yield to an 11-year high. The PBC keeps rates steady with the BoJ expected to do the same despite inflation reaching an 8-year high. Germany is expected to ink a gas deal with Qatar as it pivots away from Russian energy. However Bilfinger CEO Thomas Schulz tells this channel that Europe has the requisite energy infrastructure to weather the current power crisis. In autos news, Ford shares reverse in extended trade after supply chain issues weigh on costs.

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We are live at Windsor Castle and in London where world leaders have arrived for the funeral of Queen Elizabeth II. The S&P 500 and the Nasdaq suffer their worst week since June ahead of the Fed’s next meeting. In Europe, ECB officials warn of further rate hikes. In IPO news, Volkswagen aims for a partial valuation of Porsche of up to €75bn. And the EU could withhold €7.5bn of funding from Hungary over a rule-of-law dispute with Budapest.

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U.S. retail sales climb, and jobless claims fall ahead of next week's Fed meeting. This, as the market rally falters, with major U.S. indices on track for their fourth negative week in five, while Man Group CEO Luke Ellis tells CNBC he expects further pain to come as the Fed tightens policy and Fedex CEO Raj Subramaniam warns of a global recession. Chinese consumer confidence shows signs of resilience with retail sales rising at their fastest pace in six months, while factory output and investment data also top expectations. Russia acknowledges Chinese "questions and concerns" over the Ukraine war, after Presidents Putin and Xi hold in person talks for the first time since the invasion. In extended U.S. trade, Adobe shares sink after the software company announces a 20 billion dollar deal to buy Figma.

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U.S. producer prices fall for a second straight month as easing energy costs offer some respite, while the IMF's Kristalina Georgieva calls on central bankers to be stubborn in their fight against inflation. A shutdown deadline looms large, as President Biden mediates crunch talks to avoid a national railway strike that could throw U.S. supply chains into deeper disarray, potentially costing the economy $2 billion a day. Chinese President Xi Jinping makes his first overseas trip since the start of the pandemic, with the war in Ukraine on the agenda as he meets Russia's Vladimir Putin. In Europe, the French government announces it will cap energy price rises for households at 15 percent in 2023, at a cost of 16 billion euros and Uniper shares plunge after the gas importer confirms it is in talks with the German government over further support.

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Wall Street plunges in its worst sell-off in more than two years, with the Dow diving 1200 points, while the two-year Treasury yield rockets to levels not seen since 2007, all after a hotter-than-expected U.S. CPI print of 8.3%, raising expectations the Fed could look to hike rates by 100 basis points at its next meeting. In other news, Germany's cabinet prepares to approve an expanded state support program for troubled energy providers, and Twitter shareholders approve Elon Musk's $44 billion takeover, while a whistleblower tells US lawmakers of alleged major security flaws at the social media platform and says regulators are ill-equipped for their role.

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US CPI expectations ease according to a key Fed survey ahead of today's August print, with inflation expected to slow to eight percent. Swiss lender UBS hikes its annual dividend by ten percent and announces share buybacks will top five billion dollars this year, as fellow bank Goldman Sachs plans to cut hundreds of jobs this month according to a CNBC source, looking to rein in expenses amid a collapse in deals volume. Twitter shareholders reportedly vote in favour of Elon Musk's 44 billion dollar takeover, as the billionaire tries to force his way out of the deal.

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