Squawk Box Europe Express

The global bond market rally accelerates. Squawk Box anchors discuss the moves in fixed income markets. The U.S. ten-year yield hits a 32-month low while euro zone bond rates fall to fresh record lows, amid expectations that ECB President nominee Christine Lagarde will maintain the central bank’s dovish stance. White House economics advisor Larry Kudlow has signalled that U.S.-China talks will resume ‘soon’ in a bid to resolve trade tensions. Washington prepares for a lavish multimillion-dollar military celebration to mark the 4th of July. The cost of restructuring Deutsche Bank could reportedly amount to €5 billion. And in Brussels, the European Union Commission has called off threats of disciplinary action against Rome after the Italian government took measures to trim its public debt.

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Squawk Box anchors talk change at the top for the EU’s most important institutions. Christine Lagarde is nominated to become the next president of the ECB as EU leaders finally break the deadlock to agree on who will fill the the bloc’s executive positions. Oil prices fall despite an Opec+ deal to extend the supply cut. Secretary-General Mohammed Barkindo tells this channel that Russia is now an important and trusted ally of the cartel. Meanwhile, the S&P 500 posts its seventh record close of the year, but Asian equities fall as trade concerns and poor Chinese data weigh on prices. And in autos, Tesla smashes Q2 production and delivery records sending its shares soaring in after-hours trading.

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The global rally loses steam after the S&P 500 closes at a fresh record high, following President Trump’s confirmation that new trade talks with China have already started. Calm returns to Hong Kong following violent overnight protests with demonstrators storming and vandalising the Legislative Council building. We are live on site as the clean-up operation begins. We’re also at the World Economic Forum in Dalian, China, where Premier Li acknowledges global and domestic economic risks and says Beijing will push forward with opening up its financial and manufacturing sectors. Oil prices slip overnight despite yesterday’s decision by Opec to extend supply cuts for a further 9 months. Saudi Arabia’s energy minister Khalid Al-Falih says demand is already picking up.

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Chinese stocks and U.S. futures surge after Presidents Trump and Xi agree on a trade truce at the G20 summit in Osaka, calling a time-out on any fresh tariffs. President Trump also makes a historic visit crossing over the DMZ to meet North Korean leader Kim Jong-Un. We are live in Japan and at the World Economic Forum meeting in China with reactions from policymakers. Iran backs the Saudi-Russian plan to extend existing oil supply cuts, paving the way for a deal at the OPEC meeting in Vienna. CNBC sources confirm reports Deutsche Bank is planning to cut up to 20,000 jobs in a major overhaul.  

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CNBC confirms Chinese President Xi Jinping is ready to offer the U.S. a set of demands to conclude a trade deal which would feature lifting a ban on Huawei, while President Trump emphasises the importance of security in 5G. We are live at the G20 summit in Osaka, Japan, where bilateral meetings between the world’s top leaders continue. The enthusiasm for a trade deal, however, isn’t reflected in Asian stocks with markets edging lower and Morgan Stanley CEO James Gorman telling this channel exclusively that he believes U.S.-China trade talks may drag on for up to a decade.  Credit Suisse only gets a conditional pass in the Fed’s latest bank stress tests, sending shares lower in after-hours on Wall Street, but Deutsche Bank rallies as it makes it through. And in a second night of televised debates, ten more Democrat presidential candidates hit out at Donald Trump - and each other.

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Asian shares rise on a report that the U.S. and China have struck a trade truce ahead of a meeting between Presidents Trump and Xi at the G20 in Osaka, Japan this weekend. President Trump also boosts hope of a possible trade deal as leaders make their way to the summit. In Miami, Democrat presidential candidates face off in the first round of debates with healthcare, immigration and Trump’s economic policies the predominant topics. In corporate news, there are rumours that the EU may give Vodafone the go-ahead with its $22bn takeover of Liberty Global, while activist investor Elliott Advisors confirms a holding in German chemicals giant Bayer. 

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Asian stocks follow Wall Street into the red after U.S. Federal Reserve chairman Jerome Powell plays down expectations of an interest rate cut, saying monetary policy should not overreact to any individual data point or short-term swing in sentiment. Gold also climbs down from a six-year high. President Trump threatens Iran with "obliteration" after Tehran's president questions the mental competence of the U.S. leader. We are live in Manama, Bahrain, where President Trump’s son-in-law Jared Kushner is holding a Middle East peace workshop. And U.S. chipmakers appear to side-step Washington's ban on Huawei, as the administration reportedly aims to restart trade negotiations with China after Presidents Trump and Xi meet at the G20.

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Squawk Box anchors discuss the new wave of sanctions against Iran signed by President Trump, this time directly targeting the nation’s supreme leader, Ayatollah Ali Khamenei. We are live in Manama, Bahrain, where Israel and Palestine are sitting out a U.S.-sponsored peace summit with a $50bn economic package on the table. On the Chinese trade talks, President Trump signals he would welcome any outcome as negotiators from Washington and Beijing prepare to meet later this week. And across Asia, markets are down after a U.S. judge finds three Chinese banks in contempt for failing to comply with an investigation into North Korean sanctions violations.

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The U.S. prepares to unveil additional sanctions against Iran, ramping up tensions between the two nations. President Trump says he is not looking for war, while the U.S. envoy to Iran tells CNBC exclusively that the administration has not discounted further negotiations. On trade, China urges Washington to be open to compromise in upcoming G20 talks with Beijing as further Chinese tech firms are added to the U.S. blacklist. Turkey's opposition party wins again in Istanbul. The re-run for the post of mayor is a major blow to the ruling AK Party and President Erdogan. And in corporate news, Daimler downgrades its 2019 profit forecasts as higher diesel provisions weigh on its outlook.   

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The Squawk Box anchors discuss the latest escalation in tensions between Washington and Tehran, which sent oil prices sharply higher.

President Trump reportedly approved military strikes against Iran but then backed down, according to the New York Times and the Washington Post. The reports, which both cite multiple officials, say Trump approved the moves in retaliation for Iran shooting down a U.S. drone over the Strait of Hormuz. Top EU diplomat Federica Mogherini has told CNBC Europe will facilitate talks between the two parties to avoid a military escalation in the Middle East. 

On the equity market front, the S&P 500 closed at a fresh record high on dovish language from central banks around the world. AND In the UK, Boris Johnson and Jeremy Hunt will now face off for Britain's top job, as the final two candidates are confirmed in the race to succeed Theresa May as Prime Minister.

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