China rates, FTSE 100, DAX, CAC 40

Germany’s central bank said the country’s inflation rate is likely to stay above 2% for longer.

Headline inflation fell slightly to 6.5% in July, down from 6.8% the previous month, while core inflation — which excludes energy and food prices — rose to 6.2%.

In its latest monthly overview, the Bundesbank said that even without one-off events, such as fiscal relief measures last year, the core rate is still likely to have remained high.

“Inflation will, as things currently stand, probably come down further, mainly thanks to an increasingly dampening contribution from energy prices,” the report said, but “wage growth will probably remain strong”, which is likely to cause inflation to stay higher for longer.

— Hannah Ward-Glenton

Glyn Ford, former member of the European Parliament, now executive director of Polint, says “it’s questionable whether [it] can weather that.”

Chinese oil demand has been resilient in 2023, but the end of the post-Covid rebound could cause a global slowdown in 2024, Martijn Rats, chief commodities strategist at Morgan Stanley, told CNBC’s “Squawk Box Europe.”

“By all measures that we can track, China demand has been excellent this year,” Rats said, pointing to refinery production, crude imports, and a rise in domestic flights and car journeys. That is despite wider disappointment over its reopening this year as its economy stutters, he noted.

However, Rats continued: “The more it has recovered, the less it has to grow from hereon.”

Rats said the effects of a potential slowdown may be felt next year as global oil demand growth slows due to the end of the post-Covid recovery period, from the current expected level of around 2 million barrels a day to the historic trend of between 1 and 1.3 million.

“If you decompose the historic trend rate of growth, easily 4-500,000 barrels a day would have come from China for 20, 30 years in the past. So if China’s demand growth doesn’t continue from hereon, next year you could have a significant slowdown in global oil demand growth on the back of China.”

— Jenni Reid

Frank Bösenberg of Silicon Saxony discusses the European semiconductor industry and what’s next for the EU’s strategy.

Shares of British housebuilders weighed on European stocks Monday morning as Crest Nicholson said it now expects full-year pre-tax profit of around £50 million ($63.5 million), down from a prior estimate of £73.7 million.

“Against a backdrop of persistently high inflation and rising interest rates, trading conditions for the housing market have worsened during the summer of this year,” the company said in a trading update.

It said economic uncertainty is putting off prospective buyers, and that the end of a U.K. government support program for first-time buyers is affecting sales.

Separately, a survey from property website Rightmove found asking prices on U.K. homes fell by 1.9% in August, the biggest monthly fall since 2018.

Crest Nicholson shares were 8% lower at 9:45 a.m. London time — their lowest level since October 2022. Fellow British homebuilders Taylor Wimpey, Persimmon, Berkeley Group and Barratt all saw declines.

— Jenni Reid

The pan-European Stoxx 600 index opened higher Monday, and was up by 0.5% at 8:50 a.m. London time.

All sectors posted gains, led by oil and gas, up 1.17%.

France’s CAC 40 advanced 0.8% as Germany’s DAX and the U.K.’s FTSE 100 gained 0.5% and 0.2%, respectively.

European stocks are heading for a mixed open to Monday’s session, according to data from IG.

Futures were choppy, with the U.K.’s FTSE 100 last seen opening flat at 7,263, Germany’s DAX 0.03% higher at 15,587, and France’s CAC 40 up by 0.08% at 7,170.

— Jenni Reid

Chinese financial regulators at a central and regional government level held a video conference Friday to discuss the resolution of financial risks, according to a readout Sunday from the People’s Bank of China.

The meeting called for coordinating financial support to resolve local debt risks, and adjusting policy for real estate loans.

It also reflected a gathering of a new set of financial policymakers in China’s overhaul of its regulatory system this year.

Read more about the meeting here.

—Evelyn Cheng

Despite ongoing economic crises around the world, global stock markets have remained resilient so far this year. However, one veteran strategist warns that this disconnect between geopolitics and equities won’t last forever.

David Roche, president and global strategist at Independent Strategy, said equity markets were still relatively buoyant “because people are stupid” and overly complacent.

Roche also named the asset he would prefer to own, amid the rising risks in a high interest rate environment.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Chinese real estate company Country Garden Holdings is set to be removed from Hong Kong’s Hang Seng Index after the benchmark’s latest quarterly review. In its place, pharmaceutical firm Sinopharm will be added.

Country Garden Services Holdings, which is a property management firm and Country Garden affiliate, will also be removed from the Hang Seng China Enterprises Index. It will be replaced by online travel agency Trip.com.

Shares of Country Garden have plunged over 70% from the start of the year and hit record lows after the company failed to meet bond coupon payments, issued a profit warning and suspended trading in 11 of its onshore bonds.

The People’s Bank of China cut its one-year loan prime rate by 10 basis points to 3.45%, but held the five-year LPR at 4.2%.

This is in contrast with expectations from economists polled by Reuters, which expected both rates to be cut.

The move also comes after the PBOC cut its short-term loan rates, as well as its medium-term lending facility rates last week.

The one-year MLF rate was lowered from 2.65% to 2.5%, while the 7-day reverse repurchase rate was cut from 1.9% to 1.8%.

— Lim Hui Jie

Analysts at Bank of America screened for “triple momentum” stocks based on their momentum in three areas: earnings, price and positive news.

Earnings momentum refers to the change in consensus earnings per share estimates for each stock over three months, according to BofA. Price momentum concerns market sentiment, while news momentum refers to media coverage and corporate news releases.

CNBC Pro subscribers can read more here.

Announcement

— Lucy Handley