Squawk Box Europe Express

We are live from the shores of Lake Como where EU Economy Commissioner Paolo Gentiloni says that the continent must move to fill the geo-political void created by the U.S. following the Afghanistan withdrawal. French Finance Minister Bruno Le Maire also echoes the sentiment, telling CNBC that EU nations must now increase defence spending. In the U.S., the August jobs report falls short of expectations with hospitality and leisure sector growth faltering. We are also live at the IAA Mobility show in Munich where VW CEO Herbert Diess says automated vehicles are the future of the car industry. 

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U.S. weekly jobless claims come in at their lowest level since the early days of the pandemic, helping Wall Street to new record highs. We are live at the Ambrosetti Forum on the shores of Lake Como where former World Bank chief economist Joseph Stiglitz tells CNBC that he welcomes a tighter labour market. China’s services sector shrinks in the month of August, according to a private survey, plunging to levels not seen since the start of the pandemic. In Japan, Prime Minister Yoshihide Suga announces plans to resign, saying he will not run for re-election later this month. And in Italy, Prime Minister Mario Draghi says he may introduce a vaccine mandate.

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OPEC+ producers stand firm against U.S. pressure to sharply boost supply, agreeing to extend existing policy to return supply to market and hike forecasts. The S&P 500 ends the session flat after U.S. companies produced fewer August jobs than expected with Delta variant concerns weighing. The world’s largest chemical producer, BASF, has launched its de-carbonisation programme. We hear exclusively from CEO Martin Brudermueller who says German manufacturers require Berlin’s support to maintain competitiveness and to become sustainable. And Beijing now has ride-hailing apps in its crosshairs, accusing companies of hiring unapproved drivers and cars.

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The Chinese post-Covid economic recovery suffers a setback with factory activity shrinking for the first time in 18 months. Also in China, a new data security law launches as part of Beijing’s efforts to regulate the country’s internet future. In South Korea, a new bill is passed which will limit Apple and Google’s ability to control app store payments. OPEC and its allies have predicted that oil markets could tighten towards the end of the year but will see a surplus in 2022 as supply cuts are lifted. And in the U.S., President Biden doubles own on his decision to withdraw the military from Afghanistan, heralding an end to U.S. nation-building.

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Manufacturing growth in China falters in August and the services sector contracts for the first time since the height of the pandemic. The U.S. completes its troop withdrawal from Afghanistan after a 20-year military mission in the country. More than 120,000 people have been evacuated with thousands more hoping to escape Taliban rule. In corporate news, Porsche has announced plans to open a factory in Malaysia next year - its first outside Europe. Zoom shares fall despite beating quarterly earnings forecasts as revenue growth is set to slow.

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President Biden issues a major disaster declaration for the state of Louisiana as Hurricane Ida makes landfall as a category 3 storm, with torrential rains and rising waters that have knocked out power and shut down the Gulf's oil platforms. Germany's SPD extends its lead over Chancellor Merkel's Conservatives, while a snap poll shows Olaf Scholz winning the 3-way debate, as Saxony's President tells CNBC the race is wide open. A US drone strike kills two high-profile ISIS members accused of plotting the deadly attacks in Kabul, as western forces continue evacuations ahead of tomorrow's withdrawal deadline. And Fed Chair Jerome Powell soothes taper concerns, striking a dovish note in his Jackson Hole address and leading US markets back to record highs.

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More than 60 civilians and 13 U.S. troops are killed by ISIS-affiliated suicide bombers outside Kabul International airport, where thousands are gathering in the hope of being evacuated ahead of the U.S. military withdrawal and Taliban rule. U.S. indices break their winning streak ahead of the virtual Jackson Hole summit this weekend. Key Fed speakers have told CNBC that tapering will begin within the next two months. This, as U.S. jobless claims rise slightly and GDP data misses guidance. Meanwhile in China, industrial profits are also down, growing at their slowest pace this year on increasing Delta variant concerns.

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Both the S&P 500 and Nasdaq hit new record highs with markets now eyeing the upcoming virtual Jackson Hole summit of central bankers for clues of the Fed’s tapering path. The Bank of Korea hikes interest rates for the first time in three years. It’s the first developed economy to make the move since the start of the pandemic. In the U.S., the SEC is reportedly set to investigate DWS after a former Deutsche Bank asset management arm had allegedly exaggerated the unit’s ESG involvement. And in aviation news, Lufthansa and Delta Airlines push for fully vaccinated staff, as U.S. federal regulators look to greenlight more jabs. 

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President Joe Biden has confirmed he will be adhering to his 31st August deadline to withdraw all U.S. military personnel from Afghanistan despite G7 leaders pushing for an extension, amid continued evacuation chaos in Kabul. With a month to go before Germany’s federal election, the SPD has pulled ahead of Angela Merkel’s CDU by a single point - the first time in 15 years. In market news, the S&P 500 posts its 50th record session this year ahead of this week’s Jackson Hole meeting of central bankers. And Beijing has accused Washington of attempting to drive a wedge between China and its Asian neighbours as U.S. Vice-President Kamala Harris cranks up the diplomatic pressure during the second leg of her South-East Asian tour in Vietnam.   

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U.S. markets have had a strong start to the week with the Nasdaq reaching a new record high. Asian indices follow suit on Tuesday with Chinese tech firms rebounding from recent lows, giving the Hang Seng a boost. In vaccine news, the U.S. FDA fully approves the Pfizer/BioNtech vaccine, prompting President Biden to call on companies to encourage employees take up the jab. Meanwhile, U.S. Vice-President Kamala Harris continues her tour of South-east Asia where she reaffirms American support and cooperation for the region, in the face of Chinese ‘coercion’ in the South China Sea. We’re also in Dresden where German electrical giant Bosch has reopened a new semi-conductor factory. CEO Harald Kroeger tells CNBC that current supply chains are not sustainable. And, as the situation in Kabul continues to deteriorate, President Biden will consider extending the U.S. troop withdrawal from Afghanistan after attending a G7 emergency meeting on the issue. The Taliban has warned the 31st August deadline is a “red line” that should not be crossed. 

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