Squawk Box Europe Express

China’s economy grows at its weakest pace for a year as energy troubles and supply chain bottlenecks stifle momentum. But consumption remains strong as retail sales beat expectations. The PBOC says that the fallout from the Evergrande debt crisis is manageable but admits that ‘mismanagement’ within some of the country’s biggest companies does pose risks. The BoE’s Andrew Bailey says rising costs may prompt action from the central bank but ECB president Christine Lagarde tells the IMF that she has no reason to believe inflation will not be transitory. And in Germany, Olaf Scholz edges ever closer to the chancellery after the Green Party votes to enter formal coalition talks with the Social Democrats and FDP.

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The S&P posts its best day since March as earnings season kicks into gear on a upbeat day for US markets. All three major averages are now on track to end the week in positive territory. Banking stocks are among the winners on Wall St. Bank of America, Morgan Stanley, Citi and Wells Fargo all post earnings beats as trading ramps up and credit reserves are released. As the gas crisis grips Europe and prices soar, Russia's Deputy Prime Minister Alexander Novak tells CNBC that the Nord Stream 2 pipeline is a ready-made solution, waiting to go. And Hugo Boss hikes its full-year outlook, amid strong demand in Europe and the Americas, but the German fashion retailer warns of the impact of renewed Covid restrictions in the Asia Pacific region.

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President Vladimir Putin tells CNBC his country is not weaponising gas against Europe but instead blames the U.S. for not addressing supply issues in advance. Putin was speaking at Russia’s Energy Week, where we also spoke to a slew of energy bosses, including BP CEO Bernard Looney who said the current gas crisis can only be resolved with further investment in the sector. Meanwhile, two more UK gas companies - Pure Planet and Colorado Energy – collapse amid the autumn price spike. In Washington, the latest FOMC minutes indicate that U.S. tapering may begin as early as mid-November as annual inflation surges to its highest level for 30 years. Inflation sees highs across the Pacific as well, with Chinese factory gate prices rising at their fastest pace since records began, but CPI is held down by weak pork prices. And U.S. banks kick off Q3 earnings with JPMorgan profits boosted by better-than-expected loan losses.   

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China sees accelerating export growth beat expectations for the month of September, but imports fall short, prompting fears of a domestic slowdown. The IMF revises its global growth outlook, citing supply chain issues and the Covid pandemic for the cut. Chief Economist Gita Gopinath urges a more urgent global vaccine rollout. And earnings season gets under way with LVMH Q3 sales up 20 per cent, but an Asian Covid resurgence is hampering growth in its watches and jewellery divisions. Later this Wednesday, JPMorgan reports its latest earnings and we’ll get crucial inflation data from the U.S. 

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Oil surges with U.S. crude at 7-year highs but Wall Street finished in the red as global equities markets fret over inflation concerns. Under-fire IMF Managing Director Kristalina Georgieva gets the backing of the agency over a data-rigging scandal, but U.S. Treasury Secretary Janet Yellen warns over slipping ethical standards. Chinese property giant Evergrande fails to honour yet another debt deadline. Rival real estate companies Modern Land and Sinic also move to delay their own due dates. And JP Morgan CEO slams Bitcoin as ‘worthless’ but says he will still commit to helping clients access the cryptocurrency which is up 30 per cent in October.  

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A positive week for Wall Street gives way to disappointing U.S. jobs data in September, despite Congress agreeing to extend the debt ceiling. Meanwhile, world leaders reach a historic agreement for a minimum global tax rate of 15 per cent. The energy sector continues to be in focus with oil prices continuing to rise on surging demand. WTI hits its highest level in 7 years, surpassing $80 a barrel. Gas, however, falls. UK industry leaders still warn of potential shutdowns without government assistance. Business Secretary Kwasi Kwarteng has stopped short of guaranteeing there would be no disruption to consumers this winter. In China, Meituan shares are up after the shopping platform received a smaller-than-expected fine for abusing its market position.   

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U.S. markets hit a three-day green streak after lawmakers in Congress agree to extend the debt ceiling until early December. Chinese services activity bounces back, while stock markets resume activity positively following the Golden Week holiday. In Germany, Armin Laschet says he will stand down as leader of the CDU following the party’s worst electoral showing ever with leadership elections proposed for next week. The OECD inches closer to a 15 per cent global tax agreement after Ireland moved to ditch its 12.5 per cent rate. And in tech news, Samsung is due to post its best quarterly profits in 3 years on elevated semi-conductor prices. 

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The GOP offer a temporary truce in federal funding talks with Democrats, potentially extending the debt ceiling to December. U.S. equities rebound on the news and Asian stocks rise amid a volatile week of trading so far. Meanwhile, natural gas prices in Europe whip-saw on Wednesday after Russian President Vladimir Putin offers to boost supplies to the continent, as the Kremlin expects prices to ease further once Berlin greenlights the Nord Stream 2 pipeline. Germany’s FDP and the Greens enter coalition talks with the SPD today, moving Olaf Scholz closer to succeeding Angela Merkel as Chancellor. And plans are afoot for Presidents Biden and Xi to hold virtual talks following successful high-level negotiations between the U.S. and China in Zurich.  

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Wall Street rebounds from recent lows, with tech stocks solidly in the green following Tuesday’s rout. Meanwhile, the U.S. heads towards a potential default if Congress cannot pass measures to raise the debt ceiling. U.S. Treasury Secretary Janet Yellen tells CNBC exclusively that delays failing to pay government debt could be “catastrophic”, warning of a potential recession. Gas prices soar once again in Europe and the U.S. causing fresh inflationary jitters. This as UK gilt yields hit two-year highs, with the driver shortage continuing to have knock-on effects in the economy. In Paris, OECD members have moved a step closer to agreeing a global tax deal, tweaking the wording of the draft. And a Facebook whistleblower testifies to the U.S. Senate saying the social media giant prioritises profits over user safety. CEO Mark Zuckerberg denies the claims. 

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Wall Street falls sharply lower, dragged down by U.S. tech stocks and rising bond yields. Financials and energy shares are also lower as investors eye the Fed’s next tapering move. Facebook shares tumble following a six-hour outage of its platforms while a whistleblower accuses the social media giant of “a betrayal of democracy”. U.S. oil prices surge to a seven-year high as Opec+ nations refuse to increase production. Volvo Cars have announced plans they will be seeking a Swedish listing next year with a potential value of $30bn. As Eurogroup finance ministers meet in Luxembourg, France and Spain have partnered to demand reform in the energy sector amid soaring gas prices across the continent. 

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