US CPI lined up in the crosshairs | FXStreet

EU mid-market update: US CPI lined up in the crosshairs; Attention steadily builds for US midterms; Coreweave shares rally helps tech names globally.

Notes/observations

– Upcoming US CPI is the main event risk. Volatility across global assets is being kept low in anticipation.

– Europe had solid earnings, sticky inflation and sovereign credit noise. A heavy DACH and Nordic morning delivered a firm tone. Vestas was the standout, raised FY guidance and a DKK3B buyback, sending shares up ~14%. Bechtle raised full-year business volume, revenue and pre-tax guidance on a record order backlog; TKMS lifted FY revenue growth to +10-12%, though orders fell 58% y/y off a high base. E.ON was broadly in line and reaffirmed FY26. Elsewhere the wrap showed beats at Hannover Re, K+S, Demant, Balfour Beatty and ABN AMRO, a soft EPS print at Brenntag, and Kingspan up over 7% on the BMC Manufacturing acquisition.

– For macro data, German final July CPI confirmed at 2.8% y/y (fifth consecutive month above the ECB’s symmetric 2% target), and Italy’s final print was revised up to 2.9%.

– Asian AI trade is doing the heavy lifting. Korea again led, with the Korea Exchange activating the Kospi 200 sidecar (again) after futures rose 5%, driven by Samsung Electronics +7.5% and SK Hynix +6.5%. Hon Hai beat on Q2 net and operating profit, guided Q3 cloud and networking revenue to strong growth, and confirmed it will begin shipping NVIDIA’s Vera Rubin platforms in Q4, consistent with NVIDIA’s own H2 timetable rather than an acceleration, but a useful read-through for the European AI infrastructure complex ahead of NVIDIA’s own results later in August. Tencent beat modestly on revenue and adjusted net, with capex at CNY52.8B against 32.1B expected, a reminder that the market is still pricing AI spend as a margin risk rather than an option, alongside the first prototype of Xiaowei, its agentic AI layer inside Weixin.

– President Trump is reportedly weighing a midterm push for Congress to cut capital-gains taxes and carve out exemptions on certain home sales, a move National Economic Council Director Kevin Hassett frames as a deliberate signal of what Republicans would deliver if they regain stronger power, while Larry Kudlow notes the president is open to indexing gains for inflation. That indexing idea has been debated for nearly half a century—House and Senate versions passed one chamber multiple times since the high-inflation 1970s only to die in conference, as Congress repeatedly preferred simpler rate cuts or exclusions instead—and it collides with a fiscal reality the Congressional Budget Office puts at a $1.8 trillion deficit through the first ten months of 2026, worsened by Supreme Court-ordered tariff refunds. The preference itself dates to the Revenue Act of 1921, when lawmakers first carved out a 12.5 percent rate amid arguments about lock-in and inflation that still echo today; the sole modern experiment in full equalization came under the 1986 Tax Reform Act and lasted only a few years before preferential rates returned.

– During its earnings call, Foxconn said it plans to start shipping NVIDIA Vera Rubin platforms in Q4 2026, putting it among the first major ODMs to monetize the post-Blackwell transition and keep AI-server revenue expanding. That timeline matches NVIDIA’s long-standing guidance of partner systems in the second half of 2026 rather than any acceleration; the real swing factors remain component availability, yield, and how quickly customers can stand up full racks. NVIDIA confirmed on July 21 that Vera Rubin NVL72 production was already ramping and that live racks were running at CoreWeave, Google Cloud, Microsoft Azure, Oracle, and Nebius. Tier-1 checks as of mid-August show full production since early June, first customer shipments expected through the fall (some supplier chatter had targeted August), and the volume ramp concentrated in Q4 – exactly the cadence NVIDIA and the supply chain have been signaling.

– After reporting results, CoreWeave noted that near-term capacity is effectively sold out and that more than $25B of net new commitments arrived in early Q3 on top of the $104B backlog, with management stating demand will continue to exceed supply across customers, geographies and GPU generations for years. The company raised full-year revenue, operating-income and power targets after a July price increase of roughly 25% that is already delivering 5–10 percentage points higher contribution margins on new contracts, with both Blackwell and Vera Rubin SKUs printing record pricing even as input costs rise. Older A100 fleets are still being re-contracted through 2029 at firm rates, the first self-built data centers come online later this year, contracted power already stands at 4.2 GW, and sequential margin expansion into the low teens is guided for Q4 – directly countering market worries about fading pricing power, power constraints and the durability of the AI infrastructure cycle.

– Asia closed mixed with KOSPI outperforming +3.7%. EU indices -0.1% to +0.3%. US futures +0.1-0.6%. Gold +0.9%, DXY 0.0%; Commodity: Brent +0.2%, WTI +0.3%; Crypto: BTC -0.8%, ETH +0.4%.

Asia

– New Zealand PM Luxon secured the backing of his National Party in a confidence vote.

– South Korea July Unemployment Rate: 2.8% v 2.7%e.

– China PBOC for a second day in a row, and for just the third time since 2020, injected zero (nil) Yuan via the key 7-day reverse repo ops today, a sign Chinese banks are not wanting for cash at the present time.

– Singapore wealth fund Temasek said to invest in Samsung Electronics and Hynix; cites sources and specific terms were not disclosed.

Global conflict/tensions

– US and Iran appeared to harden positions on the strait despite Pakistan’s Defense Min Asif claiming that the two were close to some arrangement.

– Russia’s NKHP (Novorossiysk grain-export terminal with 7.1Mt of annual transshipment capacity) halted operation after an likely drone attack.

Europe

– Bank of France (BdF) estimated Q3 GDP at +0.2%. Domestic economy was expected to maintain momentum.

Americas

– President Trump said to consider capital gains tax cuts ahead of the fall midterm elections.

– Fed’s Goolsbee (non-voter) noted that Inflation was the biggest problem facing the economy right now.

Energy

– Supreme Leader Advisor: The Strait of Hormuz would remain shut until conditions are met.
US Energy Sec Wright did post on X that the seven-day average for oil leaving the Strait of Hormuz is currently up to ~9M bpd, nearly half of the pre-conflict shipment levels.

– Weekly API Crude Oil Inventories: +9.1M v +2.7M prior.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [FTSE -0.08% at 10,835.89, DAX +0.29% at 26,472.12, CAC-40 -0.21% at 8,696.64, IBEX-35 +0.04% at 20,221.48, FTSE MIB +0.15% at 53,789.00, SMI -0.82% at 14,455.50, S&P 500 Futures +0.22%].

Market Focal Points/Key Themes: European equities held near record highs on Wednesday with the Stoxx 600 up just 0.1% and major indexes barely moving, as a six-day crude rally and escalating Middle East tensions overrode otherwise steady domestic inflation data. Brent crude pushed toward $89 amid stalled Iran talks, Trump’s demand for compensation, Iranian threats to keep the Strait of Hormuz closed, and fresh Houthi strikes on shipping, injecting energy-cost pressure into an already fragile macro picture ahead of the key U.S. CPI release. Markets are pricing roughly 45% odds of a September Fed hike after last week’s weak jobs report; a soft inflation print would support rate stability on both sides of the Atlantic, while a hot one risks stagflation fears. Standout gainers included Vestas (+18.5%) on raised FY26 margins and a €400m buyback, TKMS (+14.5%) after lifting sales and margin outlooks, Balfour Beatty (+9%) on higher profit forecasts driven by UK energy and U.S. infrastructure demand, and Nokia (+7%) in sympathy with U.S. peers. Notable decliners were Shurgard (–9%) after cutting revenue-growth guidance, Bilfinger (–7.5%) on cautious margin commentary, and Prosus and Kering (both –3%) on Tencent weakness and broader luxury pressure.

Equities

– Consumer discretionary: TUI [TUI1.DE] –1.0% (Q3 profit disappointment and continued suspension of the annual revenue target), Kering [KER.FR] –3.0% (sharp underperformance this morning; no clear fresh company-specific catalyst identified).

– Energy: Vestas Wind Systems [VWS.DK] +18.5% (Q2 EBIT margin 9.4%; FY26 margin guidance raised to 7–9%; new €400m buyback), thyssenkrupp nucera [NCH2.DE] –3.5% (FY26 EBIT outlook adjusted after strategic decision to realign SOEC activities).

– Financials: ABN AMRO [ABN.NL] +5.0% (Q2 net profit around +30%; commercial NII guidance raised to €6.8bn).

– Healthcare: Zealand Pharma [ZEAL.DK] –3.0% (Q2 reporting day; shares reverse Tuesday’s +2.8% gain).

– Industrials: TKMS [TKMS.DE] +14.5% (raised FY26 sales-growth outlook to 10–12% and margin guidance after strong 9M performance), Balfour Beatty [BBY.UK] +9.0% (raised FY26 operating-profit forecast on strong UK energy and US infrastructure demand), Bilfinger [GBF.DE] –7.5% (soft demand prompted more cautious margin commentary after Q2 results).

– Telecom: Nokia [NOKIA.FI] +7.0% (in sympathy with Coreweave/Lumentum results).

Speakers

– Russia President Putin: Ready for cooperation with everyone; seizure of Russian trade vessels by EU was piracy. Ready to look for solution to Kuril Islands with Japan.

– Pakistan Interior Min said to have given an ‘important’ message to Iran’s Leaders.

– IEA Monthly Oil Report cut the 2026 global oil demand growth from -1.0M to -1.6M and cut 2026 global oil supply growth from -3.7M to -4.3M. IEA raised its 2027 global oil demand growth from 2.0M to 2.4M and raised 2027 global oil supply growth from 7.5M to 8.3M.

Currencies

– USD was steady in quiet trading with sentiment being underpinned by renewed Gulf tensions. Market participants continued to be focused on upcoming US economic data for signals on the Fed’s policy trajectory. Markets see 50% chance of a hike at the Sept policy meeting. Markets saw a 63% chance of a hike occurring at the Oct meeting (if pause in Sept) with 50% for a 25bps hike and 13% chance of a 50bps hike.

– EUR/USD locked around the 1.1535 level.

– USD/JPY holding above the 159 level. The Yen now had retraced well over half its recent FX intervention gains from a two weeks back on the coordinated Central Bank intervention.

– Oil prices remain steady as Iran officials reiterated stance that the Strait of Hormuz would remain closed unless Washington accepted its conditions. The 10-year German Bund yield last at 3.16%, France 10-year Oat at 3.97% and 10-year Gilt yield at 4.97%; 10-year Treasury yield: 4.68%; 10-year JGB: 2.83%.

Economic data

– (FI) Finland Jun Current Account Balance: €2.8B v -€0.5B prior.

– (DE) Germany July Final CPI M/M: 0.8% v 0.8% prelim; Y/Y: 2.8% v 2.8% prelim.

– (DE) Germany July Final CPI EU Harmonized M/M: 0.9% v 0.9% prelim; Y/Y: 2.8% v 2.8% prelim.

– (SE) Sweden Jun Household Consumption M/M: +1.6% v -0.3% prior; Y/Y: 4.3% v 2.0% prior.

– (RO) Romania July CPI M/M: 0.6% v 0.3%e; Y/Y: 8.2% v 7.9%e.

– (JP) Japan July Preliminary Machine Tool Orders Y/Y: 50.4% v 52.7% prior.

– (NO) Norway Q3 Consumer Confidence: -16.6 v -18.1 prior.

– (IT) Italy July Final CPI M/M: 0.3% v 0.2% prelim; Y/Y: 2.9% v 2.8% prelim.

– (IT) Italy July Final CPI EU Harmonized M/M: -1.0% v -1.0% prelim; Y/Y: 2.9% v 2.9% prelim; CPI Index (ex-tobacco): 103.1 v 102.8 prior.

– (IS) Iceland July International Reserves (ISK): 959B v 973.0B prior.

Fixed income issuance

– (IN) India sold total INR240B vs. INR240B indicated in 3-month, 6-month and 12-month bills.

– (SE) Sweden sold total SEK5.0B vs. SEK5.0B indicated in 2031 and 2036 bonds.

– (UK) DMO sold £1.5B in 1.125% Sept 2035 inflation-linked Gilts (UKTi); Real Yield: 1.725% v 1.515% prior; bid-to-cover: 3.37x v 3.35x prior.

– (IT) Italy Debt Agency (Tesoro) sold €8.0B vs. €8.0B indicated in 12-month Bills; Avg Yield: 2.768% v 2.690% prior; Bid-to-cover: 1.45x v 1.45x prior.

Looking ahead

– (MX) Mexico July Nominal Wages: No est v 7.2% prior.

– (DE) Germany Jun Current Account Balance: No est v €10.4B prior.

– 05:25 (EU) Daily ECB Liquidity Stats.

– 05:30 (DE) Germany to sell combined €2.5B in 2038 and 2053 Bunds.

– 05:30 (PL) Poland to sell Bonds.

– 06:00 (PT) Portugal July Final CPI M/M: No est v -0.5% prelim; Y/Y: No est v 3.0% prelim.

– 06:00 (PT) Portugal July Final CPI EU Harmonized M/M: No est v -0.3% prelim; Y/Y: No est v 3.1% prelim.

– 06:30 (IN) India July CPI Y/Y: 4.4%e v 4.4% prior.

– 07:00 (US) MBA Mortgage Applications w/e Aug 7th No est v -2.9% prior.

– 07:00 OPEC Monthly Oil Report (MOMR).

– 08:00 (BR) Brazil Jun IBGE Services Volume M/M: -0.2%e v -0.4% prior; Y/Y: 1.2%e v 0.4% prior.

– 08:00 (UK) Daily Baltic Dry Bulk Index.

– 08:30 (US) July CPI M/M: 0.1%e v -0.4% prior; Y/Y: 3.4%e v 3.5% prior.

– 08:30 (US) July Core CPI M/M: 0.2%e v 0.0% prior; Y/Y: 2.5%e v 2.6% prior.

– 08:30 (US) July CPI Index NSA): 333.992e v 333.952 prior; Core CPI Index: 336.785e v 336.065 prior.

– 08:30 (US) July Real Avg Hourly Earning Y/Y: No est v 0.0% prior (revised from 0.1%); Weekly Earnings Y/Y: No est v 0.2% prior (revised from 0.3%).

– 08:30 (CA) Canada Jun Building Permits M/M: +0.8%e v -1.7% prior.

– 08:30 (CL) Chile Central Bank Traders Survey.

– 10:30 (US) Weekly DOE Oil Inventories.

– 11:30 (US) Treasury to sell 17-Week Bills.

– 12:00 (RU) Russia Q2 Advance GDP (1st reading) Y/Y: +0.9%e v -0.2% prior.

– 12:00 (RU) Russia July CPI M/M: 0.7%e v 0.9% prior; Y/Y: 6.1%e v 6.0% prior.

– 12:00 (RU) Russia July CPI Core M/M: No est v 0.5% prior; Y/Y: No est v 5.0% prior.

– 12:00 (US) USDA World Agricultural Supply and Demand Estimates (WASDE) Crop Report.

– 12:00 (CA) Canada to sell 5 Year Bonds.

– 13:00 (US) Treasury to sell 10-Year Notes.

– 13:30 (CA) Canada Trade Min LeBlanc meets USTR Greer.

– 14:00 (US) July Federal Budget Balance: -$346.0Be v -$120.3B prior.

– 19:01 (UK) July RICS House Price Balance: -30%e v -33% prior.

– 19:50 (JP) Japan July PPI (domestic CGPI) M/M: 0.6%e v 0.4% prior; Y/Y: 7.4%e v 7.1% prior.

– 20:15 (AU) RBA’s Kent.

– 22:00 (NZ) New Zealand to sell combined NZ$450M in 2032 and 2036 bonds.

– 22:30 (HK) Hong Kong to sell 2-year; 5-year and 7-year Bonds.

– 23:00 (NZ) New Zealand Q3 2-year Inflation Expectation: No est v 2.5% prior.

– 23:00 (KR) South Korea July Total Bank Lending To Households (KRW): No est v 1,189.4T prior.

– 23:45 (TH) Thailand July Consumer Confidence: No est v 50.7 prior; Economic Confidence: No est v 44.1 prior.