Squawk Box Europe Express

China attempts to halt the decline in its property sector, but it defies expectations by slashing its one-year loan prime rate by less than expected and leaving the 5-year rate unchanged. The Hang Seng reacts negatively as a result, slumping to a new nine-month low as investor concerns deepen. Former U.S. President Donald Trump has refused to attend the first GOP primary debate in a bid to upstage the party’s opening event. The U.S 30-year Treasury bond yield hits its highest level since 2011, ahead of this week’s central bankers’ symposium in Jackson Hole, Wyoming.

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Market rallies in the U.S. have stalled with 2 per cent weekly declines while Asian equities are on course for their third consecutive week of losses as rate woes and a growing debt crisis stoke investors’ fears. In China, property giant Evergrande files for bankruptcy protection in the U.S. with state-owned developers warning of large losses throughout the sector. Japan’s core inflation eases which boosts hopes that the BoJ may keep benchmark rates on hold. And in crypto news, Bitcoin tumbles by up to 9 per cent following SpaceX’s decision to sell off its $373m holding in the company.

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Cracks appear following the publishing of the Fed’s July meeting minutes with two officials breaking from consensus, urging a pause on hiking. The U.S. Treasury yield hits a 15-year high while markets plunge on the news. In Japan, the yen slumps to a new 9-month low prompting calls for BoJ stimulus. This, as monthly Japanese exports fall for the first time in two years. In U.S. retail news, Target sees its shares slide which puts an end to six years of revenue growth. Walmart is set to post its data later today.  

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U.S. retail numbers come in strong, seeing the largest gains since January. However, Fitch Ratings has warned it may need to downgrade top-tier U.S. banks which causes shares to dip. The Dow breaks a three-day winning streak as a result to come in lower. Minneapolis Fed Chair Neel Kashkari reiterates that it is too early to say the Fed is done with its hiking cycle. Further woes in China as new home prices slip prompting calls for support to prop up the sector. Global investment banks have cut their forecasts for Chinese growth. And UK inflation expectations are up following record wage growth.

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There is more economic disappointment coming out of China where policy makers have cut the rate of its mid-term lending facility and youth unemployment data publishing has been suspended. Former U.S. president Donald Trump is hit with a fourth indictment. A grand jury in the state of Georgia has charged him with felony racketeering and various conspiracy charges. We hear from Republican presidential candidate Ron DeSantis who says Disney CEO Bob Iger should drop his lawsuit against the state of Florida and labels China an adversary. And in tech news, Nvidia shares are up as Saudi Arabia and the UAE reportedly order thousands of semi-conductors form the Silicon Valley chip giant.  

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Chinese property developer Country Garden suspends bond trading as an escalating debt crisis sends shares to a record low and the broader equity market into the red. Goldman Sachs says it expects a Fed rate cut in Q2 next year, while earnings season turns to the big-box retailers this week for clues on the state of the economy. Litigation mounts at UBS as Credit Suisse retail investors prepare to lodge a fresh legal claim against the Swiss lender's rushed rescue as soon as today. And Softbank is reportedly in talks to buy Vision Fund's 25 percent stake in chip design company Arm, ahead of its Nasdaq listing next month.

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UBS has removed the safety net, voluntarily scrapping the cash provision agreement with the Swiss National Bank. The country's federal council confirmed taxpayers will no longer bear any risks from the Credit Suisse collapse. Wall Street welcomes a softer than expected inflation print, with major indices posting their first positive session in three, fueling hopes the Fed will pause rates hikes at its September meeting. X Corp's Linda Yaccarino insists she has full autonomy as CEO of the Elon Musk-owned company, and tells CNBC in an exclusive interview that major advertisers including Coca Cola are returning to the platform. And fashion giant Tapestry strikes an $5.8 billion deal to acquire Versace's parent company Capri, hoping to reach new parts of the luxury sector.

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Disney shares gained in extended trade after the firm hiked prices for its streaming services. However the entertainment giant revealed a larger than expected subscriber loss, with CEO Bob Iger pledging to sharpen his focus. U.S stocks slipped ahead of today’s key inflation print, as Wall Street looks for signs the Fed's rate hikes are taking hold. Siemens misses industrial profit forecasts in the third quarter, with CEO Roland Busch telling CNBC waning Chinese demand had a material impact on order intake. And Beijing hits out at President Biden, following an executive order curbing U.S. investment in Chinese tech, with China saying it reserves the right to retaliate.

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The Chinese economy tips into deflation for the first time in over two years with consumer prices -0.3%, heaping further pressure on Beijing to step up the stimulus. Bank stocks lead Wall Street into the red after Moody's cuts the credit rating of ten regional lenders, while Italy's government partially backtracks on its planned bank windfall tax after lenders see heavy losses in Tuesday's session. Disney's ESPN partners with Penn Entertainment to launch its first sports betting book, with CEO Bob Iger looking to rejuvenate the House of Mouse ahead of key earnings later today. And Novo Nordisk shares hit a fresh record high, jumping 17% after unveiling positive results from its weight loss treatment Wegovy, cementing the Danish heavyweight as Europe's second largest company by market cap.

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Chinese exports post their biggest decline since the onset of the pandemic, plunging more than 14% in July while imports also come in much worse than expected. Wall Street snaps back with the Nasdaq and the S&P 500 ending four-day losing streaks as hopes for a soft landing take hold. And the Bank of England's Chief Economist warns food price inflation will only fall as far as 10% this year, as a fresh survey shows U.K. retail sales at their lowest level in 11 months.

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