Newsquawk European Market Wrap - 18 August 2025

• Stocks in Europe mostly lower awaiting the US-Ukraine/EU/NATO meeting


• Multilateral meeting to take place at 15:00EDT/20:00BST


• DXY edged higher throughout the European morning despite a lack of newsflow but amid EUR weakness

EQUITIES

• 
  European bourses (STOXX 600 -0.2%) opened modestly lower across the board, and the risk tone continued to deteriorate as the session progressed, with all major indices falling into negative territory.


• Nothing fresh behind the deterioration of the risk tone, but perhaps as traders reacted to the US President Trump – Russian President Putin summit on Friday. Now focus turns to the bi- and multilateral meetings later. Firstly, Trump will meet his Ukrainian counterpart at 18:00 BST, before holding a meeting around 15 minutes later. Thereafter, a multilateral meeting between Zelensky/Trump/European leaders at 20:00BST.


• 
  European sectors were mixed. Healthcare took the top spot, buoyed by upside in heavyweight Novo Nordisk (+6.2%). The Co. gained after receiving accelerated US FDA approval for liver disease MASH. Elsewhere, Vestas Wind Systems (+15.5%) gained after the US provided new guidance on renewable tax credits, essentially clarifying that projects can qualify under the One Big Beautiful Bill’s safe-harbour provision if they show physical work and not just early spending, to then access the Inflation Reduction Act credit.


• 
  US equity futures are mixed, but ultimately trading on either side of the unchanged mark in the aftermath of the Trump-Putin summit. In terms of key movers; Soho House & Co (+16%, MCR Hotels is leading a group of investors to take Co. private for ~$9/shr or $1.8bln), Tesla (-1%, Almost halves monthly payments as UK sales slump, via The Times), Terawulf (+12%, GOOGL increases stake in Co. to 14%).

FX

• 
  USD - DXY edged higher throughout the European morning despite a lack of newsflow but with various European leaders set to visit the White House on Monday for talks with Trump and Zelensky (Full Preview available on the Newsquawk headline feed). Later in the week, focus will be on Fed Chair Powell's speech following last week's CPI and PPI data - but "it may be too early for Powell to all but confirm a Fed rate cut in September", according to ING. Data-wise, nothing of note is scheduled for the week that could sway pricing. As it stands, only around 21bps worth of cuts are priced in for September, with markets currently pointing for a cut in October (-36bps priced at the time of writing). DXY resides in a 97.78-98.09 range, vs Friday's 97.72-98.21 parameter. DXY tested its 50 DMA at 98.08.


• 
  EUR - Trundled lower in the run-up to the Ukraine/EU/NATO meeting with the US in Washington later today. European leaders will arrive at the White House at 12:00 EDT / 17:00 BST and will be formally greeted by President Trump at 14:15 EDT / 19:15 BST. A multilateral meeting will then be held at 15:00 EDT / 20:00 BST. On this front, "European leaders have 3 main goals in DC today: 1) pin down more details on possible US security guarantees; 2) work on preparations for the possible trilateral Putin, Zelensky & Trump meeting, and 3) push back forcefully on the idea of “land swaps", via Eurasia. EUR/USD resided in a current 1.1680-1.1716 range with the 50 DMA at 1.1637.


• 
  GBP - GBP continued to struggle for direction amid quiet pertinent newsflow and with very little scheduled for the UK at the start of the week before Wednesday's inflation data. GBP/USD remained in a 1.3531-1.3568 range, within Friday’s 1.3526-1.3576 range, and with the 50 DMA at 1.3502.


• 
  JPY - USD/JPY gradually edged higher north of the 147.00 level overnight and closer to 148.00 during the European session. Further upside was facilitated by the dollar firming throughout the European morning on the back of EUR weakness. There isn't much slated for the JPY from a domestic standpoint before Japanese CPI on Friday, but price action until then will likely be derived from broader macro alongside yield differentials. USD/JPY traded in a 147.06-147.90 range, vs Friday's 146.74-147.89 range, with the 50 DMA at 146.54 and the 200 DMA at 149.25.


• 
  Antipodeans - Antipodeans eventually traded mixed despite resilience throughout most of the European session, with traders also eyeing the widely expected rate cut at the RBNZ meeting scheduled mid-week. There was nothing obvious to explain the resilience in the non-US dollars. Note, China has extended its anti-subsidy investigation into dairy products from the EU by six months, which could potentially be net positive for the NZD, with New Zealand a major exporter of dairy products to China.

FIXED INCOME

• 
  Global fixed income was initially firmer across the board in the aftermath of the Trump-Putin summit on Friday; whilst expectations of a peace deal were limited, the lack of progress has seemingly disappointed traders. This has been reflected in price action, with a fairly downbeat risk tone today.


• As the session progressed, price action has been fairly sideways across USTs/Bunds whilst Gilts gave up some of the earlier strength. Nothing really fresh driving markets at the moment, with traders now ultimately waiting for the bi- and multilateral meetings later. Firstly, Trump will meet his Ukrainian counterpart at 18:00 BST, before holding a meeting around 15 minutes later. Thereafter, a multilateral meeting between Zelensky/Trump/European leaders at 20:00BST.


• Taking a look at USTs more specifically, it traded within a 111-19 to 111-27 range. If upside returns to US paper, then we look to the 111-30+ peak from last Friday before the figure and then last week’s peak at 112-14.


• 
  German paper also traded firmer throughout the European morning; traded in a 128.70 to 129.18 range. European-specific traders will also give heightened focus to the multilateral meeting in the US, given that a number of European leaders and the NATO SecGen will be in attendance. As it stands, we remain some way shy of 129.62 from last Friday and then the 130.06 peak from last week.


• And finally, on Gilts, UK paper was initially buoyed alongside global peers. Though this upside somewhat dissipated as the day progressed, to trade at the lower end of a 90.91 to 91.32 range. Nothing really driving the downside, but it is worth highlighting that UK PM Starmer is in attendance at the multilateral meeting in the US. There could be some implications of additional UK military spending to secure a peace agreement. From a yield perspective, UK 10yr is currently at 4.70%, should that continue to risk, it may enter the touted “danger zone” from a fiscal standpoint; zone above 4.80%.

COMMODITIES

• 
  Crude - Little changed initially with demand constrained following the Trump-Putin meeting in Alaska, which President Trump said had made great progress, while he is to meet with Ukrainian President Zelensky and European leaders at the White House today. On this front, "European leaders have 3 main goals in DC today: 1) pin down more details on possible US security guarantees; 2) work on preparations for the possible trilateral Putin, Zelensky & Trump meeting, and 3) push back forcefully on the idea of “land swaps", via Eurasia. European leaders will arrive at the White House at 12:00 EDT / 17:00 BST and will be formally greeted by President Trump at 14:15 EDT / 19:15 BST. A multilateral meeting will then be held at 15:00 EDT / 20:00 BST. Elsewhere, in the Middle East, Israeli PM Netanyahu has "recently intensified his meetings with close associates in preparation for the possibility of early elections", via Al Jazeera, citing sources. Note, it was reported last month that Netanyahu could consider an early election, despite his low popularity, as a calculated move aimed at consolidating power before his political position weakens further. Stateside, NHC said Category 4 Hurricane Erin is located just east of the Southeast Bahamas; Life-threatening surf and rip currents are likely across the US Eastern Seaboard this week. Crude markets dipped lower heading into the US cash open, WTI resided in a USD 65.47-66.33/bbl range while Brent sits in a USD 61.65-62.55/bbl range.


• 
  Precious Metals – Two-way trade and gained after rebounding from an initial dip, with few catalysts outside of geopolitics. Price action this morning sees the precious metals complex eking mild gains, with spot gold trading on either side of its 50 DMA (3,349.60/oz) in a USD 3,323-68-3,358.49/oz range.


• 
  Base Metals - Copper eked out marginal gains overnight amid the mostly positive risk appetite in the Asia-Pacific region. However, dollar strength and a worsening of sentiment in the European morning prompted the base metals complex to trade mostly in negative territory. 3M LME copper prices reside in a USD 9,727.55-9,770.30/t range.


• 
  Indian Oil Corp Exec says processed 24% Russian oil in June quarter (prev. 14% in March quarter)


• 
  UBS reiterates its end-2025 and March 2026 Brent crude oil view to USD 62/bbl, on higher supply front South America and resilient output from sanctioned countries.


• 
  Iran's Foreign Ministry spokesperson says Tehran will continue talks with the IAEA.


• 
  Exxon Mobil (XOM) reports a heavy rain event caused the release at 236k bpd, Joliet Illinois Refinery.


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  Hungarian Foreign Minister says Russian oil flows to Hungary are halted after the Ukrainian attack on pipeline transformer station.


• 
  NHC says Category 4 Hurricane Erin located just east of the Southeast Bahamas; Life-threatening surf and rip currents likely across the US Eastern Seaboard this week.


• 
  Ukraine's foreign minister states that Hungary has made efforts to sustain its dependence on Russian oil.


• 
  Slovak pipeline operator Transpetrol says oil flows from Slovakia through the Druzhba pipeline have been suspended; do not know the reason for suspension, which came from outside Slovakia. Hungarian oil firm MOL says restoration is underway following the Druzhba pipeline stoppage, after which oil deliveries will resume; crude supply for the region guaranteed.

EUROPEAN DATA

• EU Eurostat Trade NSA, Eur (Jun) 7.0B EU vs. Exp. 13.0B EU (Prev. 16.2B EU, Rev. 16.5B EU).

GEOPOLITICS

Russia-Ukraine

• White House said US President Trump will greet Ukrainian President Zelensky at 13:00EDT/18:00BST on Monday and will participate in a bilateral meeting with Zelensky at 13:15EDT/18:15BST, while European leaders will arrive at the White House on Monday at 12:00EDT/17:00BST and President Trump will greet European leaders at 14:15EDT/19:15BST with a multilateral meeting to take place at 15:00EDT/20:00BST.


• "European leaders have 3 main goals in DC today 1) pin down more details on poss US security guarantees; 2) work on preparations for the poss trilateral Putin, Zelensky & Trump meeting, and 3) push back forcefully on the idea of “land swaps", via Eurasia.


• 
  Ukraine's Energy Minister says Russia attacked energy infrastructure within Odesa overnight; infrastructure belongs to Azerbaijan's Socar.


• 
  Russian President Putin will continue to update his foreign partners on the Russia-US summit, via Ifx.


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  "One source says that today's meetings in Washington is more blame game than peace talks", according to WSJ's Norman; "nobody believes a peace agreement under these conditions is feasible -- except President Trump".


• Click here for a full preview.

Middle East

• 
  Israel PM Netanyahu has "recently intensified his meetings with close associates in preparation for the possibility of early elections", via Al Jazeera citing sources.


• US President Trump posts on the Middle East: "We will only see the return of the remaining hostages when Hamas is confronted and destroyed!!! The sooner this takes place, the better the chances of success will be".


• "Hamas has received a new offer from the mediators for a ceasefire agreement in Gaza and is expected to respond to it today", according to Israeli journalist citing Qatar's Al-Arabi TV.


• 
  "A diplomatic source involved in the negotiations between Egypt and Qatar and Hamas told me that in light of the fact that there was not enough progress in yesterday's talks in Cairo", according to Axios' Ravid.


• 
  Iran's Foreign Ministry says "Contacts with the E3 are ongoing. We do not rule out a new round of talks. But no decision in this regard as of this moment.", via journalist Aslani.


• 
  "Iranian president's aide: We must be ready to confront Israel at any moment", via Al Arabiya. "Iranian vice president: We are not in a state of truce now. Rather, in a state of temporary ceasefire", via Asharq News.


•  

TARIFFS/TRADE

• White House Trade Advisor Navarro wrote in the FT that India's oil lobby is funding Russia's war machine which has to stop, while he added that if India wants to be treated as a strategic partner of the US, it needs to start acting like one.

NOTABLE ASIA-PAC NEWS

• 
  Chinese Premier Li says China should consolidate and expand positive trend in economy; should stabilise market expectations, via CCTV. China should continue to stimulate consumption potential. Will further stabilise employment, and guarantee people's livelihood. Will adopt forceful measures to consolidate the stabilising trend in the housing market. Will accelerate growth drivers, like services consumption


• 
  India's federal government proposes reducing the GST rate on small cars to 18% from 28% and proposes lowering GST rate on health and life insurance premiums to a maximum of 5% from the current 18%, according to a source cited by Reuters.


• China's Commerce Ministry is to extend the investigation into EU dairy products to 21st February 2026.

18 Aug 2025 - 15:00- MetalsEU Research- Source: Newsquawk