Squawk Box Europe Express

Squawk Box anchors discuss Fiat Chrysler upending its $33 bn mega-merger for French carmaker Renault, blaming political resistance for stalling the deal talks. Stateside, major indices rally on rising hopes of a Fed rate cut, but gains are capped in Asia after U.S. and Mexican trade negotiators fail to make progress in tariff talks. President Trump heads to Ireland, meeting with Irish Taoiseach Leo Varadkar to talk Brexit and Huawei's proposed 5G rollout. We follow him to Normandy for the 75th D-Day anniversary commemorations. And, we are live in St Petersburg where Chinese President Xi Jinping hails his relationship with ‘best and bosom friend’ President Putin while striking a Russian 5G deal between Huawei and MTS.  

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Squawk Box anchors discuss the stock market rally in Asia and the U.S. with Wall Street recording its second-best day of the year. The strong performance comes after Federal Reserve Chairman Jerome Powell says the central bank is ready to ease policy amid rising trade tensions. Fed Vice-Chair Richard Clarida has told CNBC exclusively that he and his fellow policymakers will put in place policies to ensure the U.S. economy remains in a good place. Meanwhile, President Trump continues his state visit to the U.K., playing down differences between Washington and London over Huawei’s 5G rollout and promising a ‘phenomenal’ U.S.-U.K. trade deal once Brexit is achieved. He has also indicated he will forge ahead with slapping tariffs on Mexican goods despite opposition to the move from within his own party. And in Rome, joint deputy prime ministers Matteo Salvini and Luigi Di Maio agree to bury the hatchet and ease tensions to cooperate in the interests of political stability.  

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Squawk Box anchors discuss the slump in U.S. tech stocks on the back of concerns over a potential anti-trust investigation into whether the biggest names in Silicon Valley have been abusing their market dominance. President Trump’s historic state visit to the UK turns from pomp to politics. The Queen rolls out the red carpet in a lavish state banquet for President, but demonstrators prepare to stage a massive protest on the streets of London. In central bank news, the RBA slashes rates to a record low of 1.25%, while US yields fall again as St Louis Federal Reserve President James Bullard says a rate cut "may be warranted soon". And in Italy, Prime Minister Giuseppe Conte threatens to resign in a bid to quell the political bickering between coalition partners Five Star and Lega.

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Squawk Box anchors discuss how trade tensions have helped wipe $2 trillion from global stocks during May, as Beijing blames Washington for the collapse in negotiations, saying the White House’s hardline stance will not resolve the dispute. President Trump kicks off his 3-day state visit to Britain with an opening salvo on Brexit, backing a no-deal departure and endorsing Boris Johnson as Prime Minister. He also talks of a potential U.K. – U.S. trade deal. And in Germany, Angela Merkel's grand coalition suffers a blow with the resignation of SPD leader Andrea Nahles, following her party’s European election drubbing last week.

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Squawk Box anchors discuss President Trump’s latest trade confrontation. This time he targets Mexico in a bid to quell the flow of illegal immigration across the southern border. The Mexican peso and U.S. futures slump off the back of the announcement. Manufacturing activity in China falls more than expected in May amid Beijing’s trade dispute with Washington. Across the Pacific, Federal Reserve vice-chairman Richard Clarida signals the central bank is open to rate cuts, should the economy weaken. And ride-hailing firm Uber reports a $1bn loss in its first quarterly market report since its IPO but shares rise on the data which is in line with expectations.

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Squawk Box anchors discuss recession concerns amid the deepening inversion of US Treasury yields, with the gap between the 3-month and 10-year rates at their widest since the financial crisis. The Dow slumps 200 points as Beijing escalates trade tensions, warning Washington of its ability to retaliate to hiked U.S. tariffs. We speak to ECB Vice-President Luis De Guindos about the central bank’s forecasts and looming troubles in Italy. And Nissan’s CEO gives cautious backing to news of the FCA-Renault merger with questions over the Japanese carmaker’s role in the tie-up remaining unanswered.

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Squawk Box anchors discuss the warning signals in the bond market, as rates fall across the globe, with the yield on the 10-year treasury falling to a 19-month low. Stocks in Asia follow Wall Street lower amid fears the move in yields could be signalling an economic slowdown. Beijing hints it could withhold exports of rare earth minerals in its trade war with Washington but the U.S. Treasury stops just short of labelling China a currency manipulator despite voicing ‘significant concerns’ over certain practices. Also in China, telecoms giant Huawei’s chief legal officer tells CNBC that the U.S. move to blacklist the company is risky and has filed a motion to deem U.S. security law unconstitutional. And in Brussels, French President Emmanuel Macron and German Chancellor Angela Merkel find themselves at odds over who should become the next European Commission president as the bloc seeks to pick candidates for the top job by next month’s summit.

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Squawk Box anchors discuss the upcoming race to fill the EU’s top positions, such as the Commission presidency, following the recent parliamentary elections. This could end up pitting France against Germany over the choice of president. Brussels is reportedly planning to take punitive action against Rome over Italy’s rising debt level but a defiant Matteo Salvini says that his Lega party’s strong EU electoral performance now gives it a mandate to change the bloc’s budgetary rules. Japan claims that it has not yet reached a trade deal with the U.S., as President Trump completes a four-day state visit to the country. And, reports suggest online retail giant Alibaba is considering a secondary Hong Kong listing valued up to $20bn following its first IPO in the U.S back in 2014.

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Squawk Box anchors discuss the results of the European parliamentary elections with the centre bloc suffering a big blow from wins for Liberal, Euro-sceptic and Green parties. The euro, however, manages to parry the populist surge seen in the UK, France and Italy. Italian deputy prime minister and Lega leader Matteo Salvini hails the results, saying that Europe is changing. We are live in Westminster, Bremen and Turin with full analysis and a breakdown of the results. Meanwhile, U.S. president Donald Trump presses Japanese prime minister Shinzo Abe on the trade imbalance between the two nations during a four-day state visit. And Italo-American carmaker Fiat Chrysler and French counterpart Renault announce a mega-merger to create the world’s third biggest auto manufacturer.

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Squawk Box anchors discuss the latest sell-off in U.S. stocks amid the ongoing fears about the US-China trade war, with the Dow braced for its fifth weekly drop and its longest losing streak for 8 years. The yield on the U.S. 10-year Treasury also plunges to 2017 lows amid the risk-off sentiment and oil dips nearly 6 per cent before clawing back losses. Meanwhile, President Trump suggests Huawei could be included in an eventual trade agreement despite branding the Chinese smartphone giant as ‘dangerous’. Secretary of State Mike Pompeo tells CNBC the tech giant is lying about its ties to the Chinese government. Deutsche Bank chairman Paul Achleitner survives calls to oust him as the troubled German lender warns of cutbacks during its annual shareholder meeting. And we are live in Westminster where word on the street is that UK Prime Minister Theresa May could be ready to tender her resignation amid a cabinet backlash over her latest Brexit deal proposal.

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