Squawk Box Europe Express

President Trump slashes tariffs on China to 47 per cent following a “12 out of 10 meeting” with his Chinese counterpart Xi Jinping in the South Korean city of Busan. Trump said that all rare earth restrictions had been lifted as one of several concessions from Beijing. Federal reserve Chairman Jerome Powell casts off assumptions of a definite December rate cut following the FOMC’s decision to cut rates by 25bps – their lowest level in three years – causing markets to waver. Airbus posts a Q3 net profit beat and confirms FY guidance despite scaling back production targets for the A220. CEO Guillaume Faury told CNBC that so far US-EU tariffs have not disrupted the plane maker’s supply chains. However, U.S. tariffs and Porsche’s abandonment of EVs for petrol engines push Volkswagen to a €1.3bn quarterly loss.  

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UBS posts a pre-tax quarterly profit surge of 47 per cent. We hear from CEO Sergio Ermotti who shrugs off concerns about credit stress. President Trump lands in South Korea where he is due to meet with his Chinese counterpart Xi Jinping. He struck a positive tone speaking to CEOs at the APEC summit in Gyeongju, hoping for a trade deal with China that would see tariffs cut and be “welcomed by the world”. AI stocks push Wall Street to new record highs ahead of todays Federal Reserve rate decision. Nvidia unveils a spree of new bookings at its GTC even in Washington D.C.  

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Swiss pharma giant Novartis sees Q3 income up by a quarter, allowing it to achieve its FY guidance and countering the fall in generic drug sales Stateside. BNP maintains its forecasts despite Q3 net income and revenue missing expectations. The French bank says it is determined to appeal a U.S. jury’s verdict that ruled it breached sanctions on Sudan during the reign of President Omar al-Bashir. UK lender HSBC sees Q3 profits fall by 14 per cent on the back of legal provisions on a Bernie Madoff-related lawsuit. However, the bank still beat forecasts and hiked its net income guidance for the year.

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The U.S. and China agree the framework of a trade deal with Presidents Trump and Xi Jinping due to meet later this week in South Korea. U.S. Treasury Secretary Scott Bessent says the move will help to dial down any further trade tensions between the two nations. Equity markets in Greater China have responded positively to the news while the Nasdaq is set to start the week 1 per cent higher. France has avoided a hat-trick of ratings agency downgrades, but Moody’s has revised its forecast for the country to ‘negative’, citing ongoing political turmoil and deficit fears. Swiss pharma giant Novartis has swooped for U.S. biotech firm Avidity in a $12bn cash deal.

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U.S. President Trump ceases all trade talks with Canada following an advertising campaign using former U.S. president Ronald Reagan to critique the current administration’s tariff policy. In Brussels, EU leaders fail to agree on the use of frozen Russian assets to bolster Ukraine’s war effort but European Commission President Ursula Von Der Leyen says the bloc will continue to increase pressure on Moscow. Chinese and Indian state-backed firms are reportedly adjusting their energy policies in the wake of new U.S. sanctions on Russian oil. We hear from the U.S. ambassador to the EU, Andrew Puzder, who says President Trump’s efforts to end the Ukraine conflict are genuine.

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Tesla quarterly earnings disappoint due to elevated costs, sending shares down in extended trade. CEO Elon Musk has defended his $1tn pay packet. Luxury giant Kering posts a small improvement in like-for-like sales while cloud computing firm SAP falls short of quarterly expectations. U.S. President Donald Trump slaps ‘tremendous’ new sanctions on two of Russia’s biggest oil firms – Lukoil and Rosneft – in a bid to bring Moscow to the negotiating table over the war in Ukraine. European Commission Vice-President Kaja Kallas tells CNBC Trump’s move is a ‘signal of strength’.

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Unicredit posts a bottom-line quarterly beat thanks to stronger-than-expected income within its trading unit. We hear from CEO Andrea Orcel who says he’s ‘not given up’ efforts at a takeover of German lender Commerzbank. In retail news, Adidas hikes its FY guidance but French luxury firm L’Oréal misses sales expectations. And brewing giant Heineken manages to stem a slump in Q3 sales but says that an uncertain outlook has prompted it to slash FY volume guidance.

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Sanae Takaichi is elected as Japan’s first ever female prime minister after her LDP party agreed to a coalition deal with right-wing partners Japan Innovation Party. U.S. credit risk jitters ease and markets enjoy a comeback rally as investors now eye this week’s corporate earnings and a potential trade truce between the U.S. and China. In Europe, EU leaders rally around Ukrainian President Volodomyr Zelenskyy following last week’s meeting with President Trump at the White House. Zelenskyy is due in London for meetings with the Coalition of the Willing.

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European futures are back in the green following Friday’s market rout as contagion fears subside about a series of bad loans in the U.S. We hear from UK Chancellor Rachel Reeves who says she aims to tackle the headwinds facing the British economy in November’s budget while remaining unwavering to her fiscal commitments. In luxury news, Kering agrees to spin off its beauty division to L’Oréal in a $4bn deal as new CEO Luca De Meo aims to cut debt and refocus the group towards fashion.

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ECB board members continue to dampen hopes of further rate cuts. We hear from the heads of the Austrian and Croatian central banks who believe risks remain on both sides. U.S. President Donald Trump has hailed a ‘very good phone call’ with his Russian counterpart Vladimir Putin ahead of Ukraine talks in Budapest. President Volodomyr Zelenskyy is due to hold talks at the White House later today. And in banking news, the U.S.-listed shares giant BBVA pop after the Spanish giant failed in its €17bn hostile takeover bid of rival lender Sabadell. It did not manage to reach the 30 per cent threshold to be granted a second attempt.

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