EUROPEAN EQUITY UPDATE: Stocks approach US CPI in thin trade; FTSE 100 buoyed by miners & IBEX 35 helped by Repsol upgrade

STOXX 600: +0.3%

• European bourses began the session firmer, and continue to hold this bias with newflow quiet ahead of US inflation data.


• No major breaking news overnight. Regarding China trade, the nation said it would suspend tariffs for 90 days as expected. On chips, China updated its export control lists, allowing firms to apply to trade with entities on the list, halting measures on 12 US entities, and suspending the addition of some US firms to the list for 90 days. This morning, China reportedly urged firms not to use NVIDIA H20 chips in new guidance, weighing on European chip names.


• On the Fed, Governor Bowman, Vice Chair Jefferson, and Dallas Fed President Logan are reportedly under consideration for Fed Chair, with an announcement expected this fall, according to Bloomberg.


• Across Europe, the FTSE 100 is outperforming after being supported by strength in miners (see sector analysis). UK labour market data overall showed that the UK labour market is softening, but the rate of change appears to be slowing. As such, given last week's BoE rate decision, which placed greater emphasis on the lack of progress in returning inflation to target, upcoming CPI data will likely be more of note. Market pricing currently sees the next 25bp cut fully priced for February 2026.


• Elsewhere in Europe, bourses were unreactive to the latest ZEW data, which noted disappointment regarding the EU-US trade deal.


• Today’s focus is certainly on the US inflation data, where CPI is expected to tick up to 0.3% from 0.2% M/M. In a note released Monday, the 11th August, JPMorgan’s desk said it saw a consensus print boosting the SPX by between +0.75% and +1.2%, but a firm print pushing the SPX lower by -0.75 to -2.75% depending on the magnitude.

Sectors: Mostly positive

• Sectors traded mostly in the green (bar tech) for the entire morning, given the slightly upbeat tone ahead of CPI.


• Energy trades at the top of the pile with Basic resources nipping at its heels for most of the morning.


• Energy is being lifted by Repsol (+1.8%), which was upgraded at JPMorgan. The report noted the Spanish energy giant was the "prime beneficiary of diesel market tightness into 2026" among European oil companies.


• Basic Resources also performs well, helped by firm iron ore prices after Chinese authorities reportedly instructed mills to temporarily halt iron ore production later in the month due to air pollution concerns.

US Equity Futures: ES U/C, NQ U/C, RTY +0.3%

• US Equity Futures are trading mixed. RTY continues to outperform amid its smaller exposure to tech names than ES and NQ, which trade tentatively into US CPI and Fed speakers, including 2027 voter Barkin, and 2025 voter Schmid.

12 Aug 2025 - 10:20- Fixed IncomeData- Source: Newsquawk