Squawk Box Europe Express

Wall Street closes firmly to the downside. The 10-year Treasury note slumps to its lowest point for almost 5 months with continued Covid recovery fears weighing heavily. Investors look to safe havens like the Swiss franc and the Japanese yen while gold is set to post its third straight week in the green. The ECB sets out its first strategic policy review in nearly two decades, announcing a 2 per cent inflation target. Airbus enjoys a 52 per cent increase in H1 deliveries and is set to hit its 2021 targets. And in Tokyo, the Olympic flame arrives at an empty stadium as the city announces a state of emergency due to a Covid flare-up and will now ban all spectators from the Games. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Taper talks begin in earnest, but the latest Fed minutes reveal policy-makers the economic recovery is not strong enough yet to take an action. G20 finance ministers meet in Venice ahead of this weekend’s summit. Talks centre on endorsement of the global corporate tax deal. The ECB is set to announce the result of its first strategic review since 2003 where it is expected to redefine its inflation target. And in tech news, Google faces several anti-trust law suits as well as legal action from former U.S. President Trump for banning him from the search engine, as well as from Facebook and Twitter. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese ride-hailing app Didi Chuxing has sparked a sell-off on its first trading day in New York after Beijing authorities ordered a cyber security review into the company. We hear from French Economy Minister Bruno Le Maire who voices confidence that the new global corporate tax deal will be endorsed and welcomed across both Europe and the U.S. The Pentagon annuls a deal with Microsoft secured during the Trump administration. The Jedi Cloud contract, worth $10bn, will now spark a bidding war with Amazon. In energy news, the Opec+ output policy stalemate forces oil prices to slide from their six-year high. Saudi Arabia’s Energy Minister Abdulaziz Bin Salman tells CNBC that the cartel remains united. And Chinese Tesla rival, Xpeng, has launched its Hong Kong IPO, raising $1.8bn. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Oil hits a three-year high as OPEC+ members fail to agree on output hikes. The U.S. has called for a “compromised solution”. Tech fears affect Asian markets after reports suggest that Beijing had asked ride-hailing app Did Chuxing to delay its NYSE IPO. In the UK, Prime Minister Boris Johnson announces plans his government will end nearly all Covid restrictions by July 19th but does warn that virus cases and hospitalisations continue to grow. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The UAE rebels against an Opec+ supply agreement. We hear from the country’s energy minister Suhail Al Mazrouei who says the current deal on the table “is not good for us.”. Markets in Asia are mixed despite Friday’s strong U.S. jobs data, while PMI numbers reveal a slowdown in Chinese services activity. Beijing suspends ride-hailing app Didi Chuxing over privacy concerns just 4 days after the company lists on the NYSE. In retail news, UK supermarket chain Morrisons agrees to a £6.3bn takeover by Fortress Investment Group. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Up to 130 nations representing 90 per cent of global GDP have become signatories to a minimum corporate tax rate. The International Monetary Fund has hiked its growth forecast for the U.S. to 7 per cent but has warned that the recovery could be lopsided. Meanwhile, markets await U.S. jobs data with non-farm payrolls expected to rise by 700k and jobless claims set to hit a fresh pandemic low. The labour market could be in for more long-term changes according to U.S. Commerce Secretary Gina Raimondo, who tells this channel that certain jobs may not return post-Covid. In an IPO-heavy week, retail trading app Robinhood is set to file for its U.S. IPO with an expected valuation in excess of $40bn. And OPEC+ has pushed back a decision on output after the UAE reportedly rebels against the deal to increase production.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

China celebrates the centenary of the Communist Party with President Xi Jinping offering a thinly veiled warning to foreign nations about Beijing’s positioning on the global stage. Meanwhile, Hong Kong marks the 24th anniversary of its handover from British to Chinese rule with strict measures in place to curb any potential protests across the city. In IPO news, Chinese ride-hailing app Didi Chuxing soars up to 30 per cent on its New York debut, but then wipes out nearly all those gains to end the session marginally in the green. Curevac shares sell off in extended trade after its final stage Covid vaccine trial shows only 48 per cent efficacy. And we hear exclusively from Credit Suisse CEO Thomas Gottstein who slams excess banking regulation, but admits that ‘green’ stress tests have become a reality in the sector.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

It’s the end of a half that has seen numerous policy changes spurred by uncertainties surrounding the pandemic. We take a look at how the markets have fared during these turbulent times and look ahead to the second half as well. In the U.S., the S&P 500 is set to finish its fifth straight month of gains. Oil has also enjoyed it best H1 since 2009. We hear from the Bank of International Settlement’s Claudio Borio who says that transitory higher inflation should be welcomed. In IPO news, Chinese ride-hailing app Didi Chuxing has reportedly valued its listing at the top of its range - $70bn – ahead of its U.S. debut. However, Chinese grocery delivery tech firm Dingdong has wiped out its double-digit gains on its first day of trade on the NYSE. Meanwhile, Chinese manufacturing activity has slowed to a fourth-month low, while Japanese factory output falls by its largest amount in a year. Both have been severely affected by the global car production slowdown.See Privacy Policy at https://art19.com/privacy

Strong tech stocks push the Nasdaq to a fresh record high but Asian markets are in the red over Delta variant concerns in the region. In tech news, Facebook enters the trillion-dollar club, with shares soaring after a U.S. judge slaps down anti-trust suits from the FTC and 48 states against the social media company. Meanwhile, U.S. banks unveil around $2bn in quarterly dividends after passing the Fed stress test. We speak to ECB Vice-President Luis De Guindos who says the central bank will not suddenly end the PEPP as hawks have raised the prospect of winding down emergency measures. And an update on the IPO front as Softbank-backed Chinese grocery app Dingdong cuts its listing target by up to 70 per cent.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Marine Le Pen’s Rassemblement National party fails to win in French regional elections but President Macron’s La Republique En Marche party also struggles to gain a single council. In the UK, Sajid Javid replaces disgraced former Health Secretary Matt Hancock and pledges to end all Covid restrictions across the country as a priority. In autos news, Tesla recalls almost 300k vehicles in China due to an online safety issue affecting acceleration. The S&P 500 enjoys its best week in months hitting a new record high. This, as the U.S. Commerce Department’s inflation indicator surges at its fastest rate since the early 1990s.    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

President Biden hails a bipartisan deal between senators on his $1.2tn infrastructure deal but he faces criticism from Republicans over further spending plans. The news buoys Wall Street with the S&P 500 and Nasdaq hitting record highs as construction stocks lead the way. In Brussels, there is a rift between the 27 EU nations, with Poland and the Baltic States rejecting France and Germany’s calls for a leaders’ summit with Russian President Vladimir Putin. And Chinese ride hailing firm Didi Chuxing seeks a New York listing which could be valued in excess of $60bn in what could be the biggest IPO of 2021.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

There’s a mixed picture in the U.S. markets as the Nasdaq hits a new record high but the Dow and S&P 500 snap two-day winning streaks on the back of continuing inflation fears. Treasury Secretary Janet Yellen, however, says that price pressures should abate later in the year. U.S. Secretary of State Antony Blinken has begun a European tour, first meeting German Chancellor Angela Merkel in Berlin to discuss strategies on containing China. There are reports that Washington may sanction solar products made in China’s Xinjiang province over alleged human rights abuses in the Muslim-majority region. Hong Kong’s last remaining pro-democracy newspaper, Apple Daily, prints its last ever edition after its assets were frozen by Beijing and a series of journalists’ arrests were made under the SAR’s new National Security Law. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The U.S. markets rally continues with investors focusing on growth stocks. The Nasdaq closes on a record high while the S&P 500 nears a new peak and the Dow enjoys its best day since March. Congress hears from Federal Reserve Chairman who says the central bank will not waver by raising rates too soon on fears of surging inflation. Brussels green-lights Rome’s recovery plan with €190bn set to be dispersed. UK Foreign Secretary Dominic Raab is in Vietnam in a bid to create close trade ties with Pacific nations, accessing the CPTPP bloc.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. equities surge back into the green following last week’s post-Fed sell-off, with the Dow posting its best day since March. However, Fed Chair Jerome Powell warns of a continued threat to the economy from the pandemic but says price pressures remain transitory. In France, media giant Vivendi comes under activist investor scrutiny as it attempts to spin off its Universal Music arm. We speak to LVMH CFO Jean-Jacques Guiony who says the luxury brand is finally overcoming the stuttering restart of global tourism, just as the iconic Parisian department store La Samaritaine reopens to much fanfare after a 16-year closure. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Nikkei leads sharp declines across Asia after Wall Street posts its worst week since October, with markets continuing their post-Fed slump amid a more hawkish shift. Morrisons braces for a bidding war as a US private equity firm reportedly continues its pursuit of the British grocer, after the group rejects a 5 and a half billion dollar takeover attempt. Bill Ackman's SPAC buys a 10 percent stake in Vivendi's Universal Music Group for 4 billion dollars, as shareholders prepare to vote on the spin-off and listing set for September. And HSBC posts its worst day in 9 months after taking a 2 point 3 billion dollar hit on the sale of its French retail bank, as Europe's largest lender sells the troubled unit for just 1 euro.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

'The recovery is just beginning'. As European finance ministers hail the economic turnaround ahead of today's talks on tax and growth, we hear from the Finance Minister of Luxembourg. In markets, the Dow struggles for the second straight day as markets digest a more hawkish Fed, while formerly red-hot commodity plays lose some steam, weighing on industrial stocks. Core inflation rises for the first time in a year in Japan -- while the BOJ joins the list of central banks keeping rates on hold and policy steady -- warning the economy remains in a "severe state". And Juneteenth becomes a federal holiday in the US, commemorating the end of slavery in AmericaSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The U.S. Federal Reserve speeds up its timeline for hiking rates and also increases its inflation guidance. Wall Street plunges into the red as a result. We hear from Man Group CEO Luke Ellis who warns that there are more ‘scary’ price prints to come over the summer. In Geneva, Presidents Biden and Putin hold ‘constructive’ talks and agree to continue the dialogue on cyber warfare and arms control. Meanwhile, Novartis CEO Vas Narasimhan tells CNBC that future pandemics are a certainty but says the Covid outbreak has taught the world some valuable lessons about preparedness. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The EU has excluded 10 banking giants from participating in its Covid recovery fund bond sale. Big names such as JP Morgan, Natwest and Bank of America have reportedly been blocked over previous involvement in market-rigging scandals. Meanwhile, Brussels and Washington end their 17-year feud over aircraft subsidies. European Commission President Ursula Von Der Leyen has welcomed the ‘new chapter’ but warned that work remained to be done. In Washington, the Federal Reserve is not expected to make any sudden rate moves during its two-day policy meeting, sending markets lower as investors hunt for signs of a rate hike timeline. Presidents Biden and Putin are to meet in Geneva today. The Kremlin warns that common ground on a host of issues may be sparse. And CNBC hosts its inaugural Evolve Global Summit, bringing together leaders and innovators for a new era of business.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

NATO members meet in Brussels and double down on criticism of Chinese expansionism. Moscow is also labelled a security threat. U.S. President Joe Biden fired a warning to Russian President Vladimir Putin over the welfare of jailed opposition politician Alexei Navalny. The U.S. and the EU are reportedly set to end a 17-year feud over aircraft subsidies. In the UK, Prime Minister Boris Johnson delays ‘Freedom Day’, keeping the country locked down by up to a month to combat the spread of the Indian variant. And in M&A news, Third Point’s Daniel Loeb and Pershing Square’s Bill Ackman vie for French media group Vivendi as it looks to spin off Universal Music Group. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

G-7 leaders in Cornwall claim they have reached consensus on tax, climate change, infrastructure and the vaccine rollout, but they face criticism over a lack of concrete action. Brexit was also in focus with UK Prime Minister Boris Johnson vowing to do whatever it takes to conserve the union while Canadian PM Justin Trudeau tells CNBC that the Irish border was an integral part of his bilateral talks at the summit. We also hear from NATO secretary general Jens Stoltenberg who says that while China is not an enemy of the alliance, it is a cause for concern. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.