Squawk Box Europe Express

Ukraine's President heads to Washington DC alongside European leaders for talks with Donald Trump today, with the U.S. President set to push for an end to the war — while the question remains: 'on whose terms?'. This as Friday's Alaska summit fails to yield an agreement — and leaves Kyiv fearing the U.S. could give way to Russia's terms after President Trump backtracks on his sanctions threat. Elsewhere, investors are counting down to the Jackson Hole symposium this week, looking for signs of where the Fed's rate path will lead.

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All eyes are on Anchorage, Alaska, as the city prepares to host today's meeting between Donald Trump and Russia's Vladimir Putin, with the U.S. President saying he's already contemplating a second summit to bring in Ukraine's leadership. Meanwhile, a hotter-than-expected PPI print stateside pours cold water on outside hopes of a jumbo Fed cut in September, and sending yields higher. But markets in Europe remain on track for healthy returns this week. In Asia, Chinese growth data slumps across the board with retail sales, industrial output and fixed asset investment all undershooting expectations - as the threat of tariffs continues to loom over the world's second largest economy.

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The U.K. economy grows more than expected in the second quarter, offering some much-needed respite to Chancellor Rachel Reeves. President Trump holds productive talks with European leaders in the build up to Friday's Alaska summit, with the U.S. leader issuing a stark warning to Moscow if it does not agree to a peace deal in Ukraine. Meanwhile, Europe's Stoxx 600 hits a two-week high while the S&P 500 and Nasdaq close at all-time records, as markets price in a 100% chance of a Fed cut next month.

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The inflation impact of Trump's tariffs fails to show in July's CPI print, leading investors to ramp up bets on a September Fed cut, and pushing global equity markets higher. Meanwhile, European leaders prepare for today's virtual talks with Presidents Trump and Zelenskyy - calling on the U.S. leader to safeguard Ukrainian territory and not bow to Putin's demands at Friday's Alaska summit. Software stocks on both sides of the Atlantic tumble - with SAP posting its worst day since the COVID-19 outbreak - as investors fret that AI could upend many of the world's biggest software companies.

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The U.S. has extended its China tariff deadline by another 90 days, allowing talks to continue as Beijing pledges to hold off on further escalation. Meanwhile, President Trump has confirmed that the U.S. government will take a 15% cut off top chipmakers' China sales, and suggests he could allow Nvidia to begin exporting a downgraded version of its advanced Blackwell chip. Across the Atlantic, EU leaders - apart from Hungary – said that the Ukrainians must have "the freedom to decide their future" ahead of the Trump-Putin summit, while the U.S. President seems to downplay the chances of a breakthrough.

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Europe and Ukraine have set their own ceasefire terms ahead of Trump-Putin talks, while the White House reportedly weighs inviting Ukraine's President to Friday's Alaska summit. Meanwhile, European markets are poised to start the week on an upbeat note with the Stoxx 600 coming off its best weekly gains in 3 months, as investors brush off any remaining tariff uncertainty. In the chip space, Nvidia and AMD reportedly agree to give the U.S. government 15 percent of China chip sales in exchange for export licenses, in a potentially unprecedented trade-off.

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President Trump promotes CEA chair and tariff supporter Stephen Miran to the Fed’s board of governors praising his expertise in global economics. The STOXX 600 achieves its biggest one-day rise in almost two weeks with European corporate earnings offsetting any potential tariff fallout. Futures are also set to finish the week strongly. The BoE narrowly votes to slash interest rates to a two-year low after an unprecedented deadlock among committee members. Governor Andrew Bailey tells CNBC the UK rate path remains opaque.

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President Trump’s reciprocal tariffs kick in. India is still facing the prospect of levies being raised to 50 per cent while Swiss President Karin Keller-Sutter leaves Washington after failing to lower her country’s 39 per cent tariff. Germany’s Rheinmetall sees sales grow by more than a third in H1 on increased demand across Europe. Siemens confirms its FY guidance with quarterly orders surging by 28 per cent. However, its key profit indicator for its industrial unit falls by 7 per cent on the year.  

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President Trump warns he could escalate pharmaceutical tariffs to as high as 250 per cent with extra levies on chips also on the table. Trump tells our colleagues Stateside, he wants to force producers to bring manufacturing home. In Europe, Novo Nordisk sees a Q2 surge driven by strong sales of its anti-obesity drug Wegovy just a week after a profit warning reduced the drug maker’s market cap by $70bn. And in banking news, Commerzbank cites restructuring costs behind its fall in Q2 net profit but the German lender is still upping key targets for the rest of the year.  

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U.S. equities rally, unfazed by tariffs and weak economic data as investors anticipate further rate cuts from the Federal Reserve. President Trump threatens to increase tariffs on India over its purchases of Russian oil. New Delhi hits back, saying it is protecting its own interests. German chip maker Infineon hikes its full-year margin forecast. CFO Sven Schneider tells CNBC that the impact of tariffs has not been as pronounced as first feared.  

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