EUROPEAN OPEN: BAYN GY Roundup settlement challenge dismissed; EL FP launches buyback for up to 5mln shares; BGN IM willing to consider BMPS IM offer; UK to drop 3% defence spending target

• European equities have opened higher. On the week, futures of the narrow Euro Stoxx 50 are primed for a second week of losses, while futures of the broad Stoxx 600 are on course for a third week of losses. Overnight, APAC stocks were mostly positive, but gains were capped following the varied performance stateside, where all indices rose and the Nasdaq outperformed post-Nvidia earnings, but almost all sectors were in the red aside from tech.
• Attention turns to the Jackson Hole Economic Symposium and Fed Chair Warsh’s keynote speech (preview below). Traders will be seeking guidance from the Fed Chair on inflation and policy clues for the September meeting. However, given Warsh’s aversion to forward guidance, some suggest that there are risks that traders could be left disappointed.
• Fed officials remained divided on the inflation outlook. This week, Kansas City Fed President Schmid and Cleveland Fed President Hammack argued current rates are not sufficiently restrictive and further tightening may be needed, while Boston Fed President Collins described policy as mildly restrictive and Chicago Fed President Goolsbee said he is waiting for evidence on whether the inflation shock will persist. Markets are currently pricing around 35% probability that the Fed will hike at its September meeting.
• US Treasury yields edged slightly higher ahead of Warsh, while gold fell below USD 4,600/oz.
• Crude futures are lower, with Brent prices around USD 88/bbl, and WTI below USD 83/bbl. Reports suggest Venezuela is considering leaving OPEC as it deepens oil sector ties with the US; no final decision has been made. Elsewhere, Goldman Sachs said Persian Gulf oil exports have recovered to 15-16mln BPD, around two-thirds of pre-war levels; Hormuz transits are estimated near 8-10mln BPD. GS also said that increased dark crossings and ship-to-ship transfers could limit crude price upside even if Middle East disruptions persist.
• In geopolitics, the Trump administration has reportedly told mediators it has no interest in returning to the June MoU with Iran, leaving diplomats without a clear framework for restarting talks, WSJ reports.
• In data, French prelim August CPI rose 0.7% M/M (exp. 0.6%), with the annual rate rising to 2.4% (from 2.1%). The HICP measure rose by 0.8% M/M, with the annual rate of HICP rising to 2.7% Y/Y (from 2.4%). In Spain, prelim headline CPI rose to 4.3% Y/Y in August (exp. 4.2%, prev. 3.6%), while the HICP gauge rose to 4.5% Y/Y (exp. 4.6%, prev. 3.9%). ECB’s Kazaks earlier said inflation must not be allowed to become entrenched and that raising rates is one way to prevent this, adding that another rate increase in September was a considerable possibility.
• Elsewhere, German import prices rose 0.2% M/M (exp. 0.2%), and to 6.8% Y/Y in July (prev. 6.1%).
• UK Lloyds Business Barometer rose to +53% in August (prev. +49%); the report said that overall, businesses are reporting stronger customer demand, greater optimism about the wider economy and growing confidence in their own trading outlook, all of which will be helping to support investment and growth plans.

• HEALTHCARE: The 8th US Circuit Court of Appeals dismissed a challenge by plaintiffs opposing Bayer’s (BAYN GY) attempt to resolve Roundup litigation through a USD 7.25bln state court class action settlement. EssilorLuxottica (EL FP) announced the launch of its share buyback programme, where it will purchase up to 5mln shares.
• FINANCIALS: Banca Generali (BGN IM) said it is willing to consider BMPS’s (BMPS IM) takeover offer, while stressing that the bid was unsolicited and had not been agreed in advance. A group led by Advent and Stripe has reportedly abandoned its pursuit of Paypal (PYPL), Bloomberg reports.
• INDUSTRIALS: Of note for UK defence names, Chancellor Healey will drop his target of UK defence spending reaching 3% of GDP by 2030 in October’s Budget, according to the FT; the Budget will instead address a nearly GBP 5bln defence equipment funding gap, about GBP 1.2bln annually, while larger spending increases will be deferred to next year’s Treasury spending review.
• CONSUMER CYCLICAL: Nokian Renkaat (TYRES FH) CEO said it is progressing ahead of plan in some areas as it targets higher sales and profitability; it has rebuilt after exiting Russia by opening a new tyre plant, overhauling suppliers, raising prices and shifting towards higher-value products. Ulta Beauty (ULTA) fell 3.2% in extended US trading despite raising its FY earnings outlook.
• TECH: Nvidia (NVDA) reportedly paused its AI Compute Partnership revenue-sharing programme amid employee concerns over antitrust scrutiny and control over customers’ business practices, WSJ said; however, an Nvidia spokesperson responded that the programme remains in place. Marvell (MRVL) shares fell over 8% in extended trading, only narrowly beat expectations, gross margin guidance came in at the low end of consensus, and investors were disappointed that longer-term fiscal guidance was deferred. Workday (WDAY) shares edged higher in extended trading after a Q2 beat. Autodesk (ADSK) shares fell 3.5% in extended trading after its Q3 and FY outlooks were below expectations.
• NOTABLE BROKER UPDATES: Erste downgrades Rio Tinto (RIO LN), upgrades Shell (SHEL LN) and Siemens (SIE GY). Tesco (TSCO LN) downgraded at Erste

• CENTRAL BANKS: Fed Chair Warsh (neutral) will deliver a keynote address at Jackson Hole; ECB’s Schnabel (hawk) participates in a panel.
• DATA: In Europe, Germany August unemployment change (exp. 11K, prev. 6K) and unemployment rate (exp. 6.4%, prev. 6.4%); Eurozone economic sentiment (prev. 96.9), and consumer confidence final (prev. -15.9). In North America, US preliminary NFP annual benchmark revision is due (prev. -911K). Michigan consumer sentiment final data for August (exp. 51.0, prev. 55.2), current conditions (exp. 51.8, prev. 54.8), expectations (exp. 50.6, prev. 55.4), 1yr inflation expectations (exp. 4.3%, prev. 4.2%) and 5yr inflation expectations (exp. 3.3%, prev. 3.3%); Chicago PMI (prev. 57.6). Canada Q2 GDP (exp. 3.4% Y/Y, prev. -0.1%; exp. 0.8% Q/Q, prev. 0%) and June monthly GDP (exp. 0.2% M/M, prev. 0.3%).
• SUPPLY: Italy auctions EUR 5.75-7bln of 2031 and 2036 BTPs, as well as EUR 1.5-2bln of 2034 and 2035 CCTeus.
• ENERGY: Baker Hughes reports weekly rig counts (prev. oil 452, gas 127, total 588).
• CRA: Fitch reviews France (A+); S&P reviews Portugal (A+); Moody’s reviews Switzerland (Aaa); Morningstar DBRS reviews the Netherlands (AAA).
• OPTION EXPIRIES: Gold, Silver and Copper August 2026 futures; Brent October 2026 futures.
• WARSH AT JACKSON HOLE (15:00BST/10:00EDT): This year’s economic symposium at Jackson Hole has the title “Financial Innovation: Implications for Payments and Policy.” Fed Chair Warsh is due to deliver remarks on 28th August at 10:00EDT/15:00BST, which traders will use to infer the path for near-term Fed policy ahead of the 16th September policy meeting. Previous Fed chairs have used the forum to signal upcoming policy actions. However, Warsh has begun his term with a bias against issuing any forward guidance, and has made the case that such guidance can shackle officials to their earlier forecasts, and his approach of little guidance will allow markets to interpret the data themselves. The approach has led to volatility; his lack of details at the July post-meeting presser unsettled bond markets, prompting a slide in longer-dated maturities. Since the July meeting, expectations of Fed rate hikes have eased following a run of downside data surprises, including a large miss in nonfarm payrolls, cooling inflation metrics, a GDP miss, and soft retail sales. Warsh is likely to reiterate the Fed’s commitment to bringing inflation back to target. Still, some analysts have suggested that the market could again be left disappointed; Saxo Bank’s analysts say the title of the forum suggests that Warsh will deliver thoughts on the potential use of stablecoins for financial system plumbing rather than the Fed’s thoughts on interest rates. Indeed, in July, Warsh told reporters that his remarks will aim to frame the ‘big picture questions’ rather than offer any clues about the near-term path, adding that his Fed is not constrained by market pricing. A recent Reuters poll showed most economists surveyed expect the Fed to keep rates unchanged in September, and through the end of the year; market pricing has moved dovishly after the soft run of data; at the time of writing, markets price around 65% probability of a hold in September vs around 50/50 just a few weeks ago. HSBC said “the debate clearly is about the possibility of rate hikes,” adding that “we’ve gone through the July inflation numbers, and they were basically neutral. On the activity side, the very latest data do show some softening. That could push more FOMC policymakers into the wait-and see camp rather than in the immediate rate hike camp.”
• US BLS ANNUAL BENCHMARK REVISIONS (15:00BST/10:00EDT): The BLS publishes its prelim benchmark revisions for the CES survey, alongside Q1 QCEW data. The figure realigns sample-based payroll estimates to the March 2026 benchmark month. The data will have no immediate mechanical effect; official estimates aren’t updated until the final adjustment, which will be included in the February 2027 jobs report. Still, the release will be closely watched as a read on the health of the labour market, and follows a recent run of cooling jobs figures, where a total of 74K downward revisions were reported in the April-May jobs data. Any large revision could unsettle policymakers’ recent narrative on a resilient labour market. At the July FOMC, Fed Chair Warsh said the labour market was “solid” and “steady,” and that job gains have kept pace with the workforce and unemployment; he also framed the labour market as “more or less at equilibrium,” and suggested that the Fed’s near-term focus was on above-target inflation, rather than jobs risks. August’s FOMC minutes also noted that demand and supply were balanced in the jobs market, with unemployment expected to stay near current levels. Meanwhile, recent research from the Cleveland Fed notes that the latest benchmark move (-0.54%) sat only marginally outside the BLS’ normal -0.5% to +0.5% range, with no statistical evidence of a structural break since 1965. It also found past revisions carry some predictive value for future ones, which suggests that the release could help shape traders’ views ahead of the more comprehensive February update. In last year’s revisions, payrolls were revised down by -911k for 2025.

Jackson Hole keynotes from a Fed chair have historically repriced the front end only when the chair uses the forum to flag a near-term decision; the established risk here, flagged in the preview itself, is a speech on payments plumbing that leaves September pricing untouched, a pattern that has tended to produce a relief move back toward pre-speech levels once no signal materialises. The more durable thread is the visible split among regional Fed presidents over whether policy is restrictive enough, with pricing for a September hike still materially above zero; speeches that leave the median voter uncommitted in that setting typically hand the next payroll and inflation prints outsized weight. On the ECB side, hawkish commentary of the Kazaks type against upside French and Spanish inflation surprises is the standard pre-meeting sequence, and has tended to firm front-end Eonia and pressure BTP spreads into the Italian supply flagged on the calendar. The BLS benchmark revision is a known pattern: large downward revisions to payrolls have on previous occasions reframed the labour-market narrative without any mechanical effect, and the read-through runs through the reaction function rather than the data itself. The UK defence target story is of the kind that hits the domestic defence peer set on headline, with the funding-gap detail, not the dropped target, the channel that persists.