Squawk Box Europe Express

Germany’s preliminary official election results are in but there is still no clear winner in the federal elections of Europe’s biggest economy. The CDU/CSU have suffered their worst showing since 1949, but the party candidate Armin Laschet believes he still has a chance of victory. The FDP and Greens will be kingmakers in the result, potentially paving the way for the country’s first 3-party coalition. Evergrande’s EV arm falters in Hong Kong trading as it issues a call for cash and postpones plans to go public. Another bond payment for the Chinese property giant looms on Wednesday. And in the U.K., scenes of long queues and panic-buying at petrol stations dominate the scene, as an HGV driver shortage prompts plans to involve the military to help with deliveries. BP has said that up to 30 per cent of its stations are now empty.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

We are live in Berlin and London for a special edition of Squawk Box ahead of Sunday’s German federal elections. Polls have narrowed with the SPD’s lead over the CDU now just down to a couple of points. During the last TV debate before the vote, candidates sparred over taxation, debt and foreign policy in the face of an ascendant China. We also hear exclusively from ECB President Christine Lagarde who believes that Angela Merkel’s 16-year tenure has left the country in a much stronger position on the world stage. Wall Street is in the green with the Dow and S&P 500 posting their best session since July. However, the Evergrande saga rolls on, leaving global investors in limbo as the troubled property giant enters a 30-day grace period to pay an offshore bond coupon. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

November seems likely for a potential Fed tapering announcement. Chairman Jerome Powell looks to possibly end support by the summer of 2022, with a rate hike later that year. The Dow and S&P react, closing in the green and ending a four-day losing streak, with bank stocks cheering the news. In China, Evergrande shares jump after the chairman pledges to prioritise shareholders, but doubts remain about an $83.5m interest rate payment on an offshore bond due today. And in Germany political campaigns enter the final stretch ahead of this Sunday’s election.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese property development giant Evergrande says it is set to make an interest payment on its bonds as scheduled tomorrow. However, former PBOC advisor Li Daokui says that the company’s debt problems are far greater and the firm could well be dissolved. Mainland Chinese markets attempt to claw back losses on the news after an extended weekend. In the U.S., the House of Representatives has voted to prevent a government shutdown and suspend the debt ceiling. The GOP says it will block the bill in the Senate. JP Morgan CEO Jamie Dimon tells CNBC that market pressures could prompt the Federal Reserve to act more urgently and vigorously in tapering. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. indices suffer a torrid session, with the S&P 500 posting its worst day since May while the Dow falls by more than 600 points. In Japan, the Nikkei is also down. Standard & Poor’s warns Chinese property developer Evergrande will potentially default without government support. Beijing is seen as unlikely to step in with aid, unless the risk of contagion rises. And European countries are holding emergency energy talks to see off creeping gas prices, but UK Business Secretary Kwasi Kwarteng says supply fears are overblown. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

European gas prices soar, as the UK’s business and energy minister prepares to hold emergency talks with suppliers, but COP26 President Alok Sharma has played down concerns. In Germany, the SPD’s Olaf Scholz has emerged the clear winner in the latest TV debate ahead of this weekend’s general election. Chinese property developer Evergrande faces twin bond payment deadlines this week, prompting its share price to plunge on the Hang Seng. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The S&P closes lower, but pares losses after retail sales come in better than expected, despite Delta variant concerns. Meanwhile President Biden lays out plans to raise taxes on the highest earners and big business, as he looks to fund his infrastructure package and social policies. China applies to join the new Pacific Trade Pact, in a bid to boost its regional role, just a day after the formation of a U.S.-led Asia-Pacific security alliance. Polls open across Russia - as the country votes in three days of covid-impacted federal elections. And Maersk hikes guidance again, as the shipping giant says it expects freight tightness to run into next year -- while Citroen CEO Vincent Cobee tells CNBC the auto industry needs greater control over supply chains.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

US President Joe Biden announces a new Indo-Pacific security partnership with the UK and Australia - riling China. The French government meanwhile, voices its disappointment to have been excluded from the pact. In Germany, the front-runner to succeed Angela Merkel as Germany's next Chancellor, Olaf Scholz is summoned to appear before lawmakers over a money laundering scandal, just days before the country heads to the polls. And billionaire investor Ray Dalio makes waves in the crypto space, telling CNBC that regulators will crush bitcoin if it poses a threat to central banks. We take a look at global markets where Hong Kong is under heavy pressure once again, while Wall Street bounces back, and the S&P posts its best day in two weeks.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

China's August retail sales miss the mark, growing at 2 and half percent, nearly one-third the expected level, as the country deals with its worst Covid outbreak in over 18 months. In the US, price pressures appear to ease, as CPI jumps less than expected in August - but still hovers near 13-year highs. And Apple unveils its latest range of iPhones, as the world's most valuable company seeks to move past privacy and anti-trust concerns. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Dow and the S&P log their first positive day in six - ahead of today's CPI report, expected to show inflation running hot, potentially putting the Fed in a tough spot on its tapering timetable. U.S. House Democrats return from their August recess with a plan to roll-back Trump era corporate tax cuts, as they look to finance the 3-and-a-half-trillion-dollar infrastructure bill. And in Corporate news, German real estate company Vonovia drops a key condition in its bid to take over rival Deutsche Wohnen - potentially removing the last hurdle to the deal.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Asia markets see red on fresh regulatory concerns in China - as Beijing reportedly seeks to break up Ant Group's online payments platform Alipay, and amid calls for consolidation in the country's EV sector. In Europe, the SPD's Olaf Sholz pulls ahead in the polls, less than two weeks before the German election - hitting back at accusations he was culpable in a string of high-profile financial scandals. In France, the far-right's Marine Le Pen, and Paris Socialist Mayor Anne Hidalgo, launch their campaigns to oust the President Macron next year.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The leaders of the world’s two biggest super powers spoke for the first time in 7 months. U.S. President Joe Biden and Chinese President Xi Jinping agreed to avoid conflict while managing competition in a 90-minute call that the White House described as “familiar and candid”. Meanwhile, Wall Street extends losses despite an improving employment picture, while Asian equities bounce back as Chinese tech stocks recover from more gaming regulation. Beijing said approvals for new video games would only be slowed, dispelling rumors of a freeze on all new approvals. Meanwhile in Europe, the ECB announces plans to trim emergency pandemic support - but President Lagarde insists it's not a taper. And prosecutors raid Germany's finance ministry just three weeks ahead of elections in a move that could damage front-runner Olaf Scholz. Speaking ahead of the news, we hear from SPD leader Martin Schulz who tells CNBC the finance minister would bring positive changes to the chancellery.See Privacy Policy at https://art19.com/

Investors await one of the most contentious ECB meetings in months, as the central bank is expected to map out how it will pare back its emergency bond purchase programme. The Nasdaq retreats from record highs, joining the S&P and Dow in the red, sending Asian stocks lower, as the Fed's monthly Beige book reports a downturn in the economic outlook. China's factory gate prices surge to a 13-year high - coming in hotter than expected on the back of elevated commodity prices. And we are live from a dairy farm outside the Swiss city of Lausanne - one of Nestle's key suppliers - ahead of the release of the food giant's 'Regeneration Promise'.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The S&P and Dow close in the red after the Labour Day long weekend, with recovery concerns growing. Meanwhile big tech stocks push the Nasdaq to another record high. It’s a bumpy ride for Bitcoin after El Salvador's launch of the crypto as an official currency gets off to a rocky start amid protests and tech teething trouble. And German Chancellor Angela Merkel implores voters to back Armin Laschet in this month's election, as candidates make their pitch for the premiership, with her Conservatives lagging in the polls.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese exports score a big beat - jumping more than 25-percent on the year in a sign the world's second largest economy may be performing better than a recent run of data suggested. The CEO of Daimler tells CNBC it's seeing strength across its product line, despite supply chain challenges that the group hopes will ease later this year. Porsche is also feeling the chip squeeze - the CEO tells CNBC, it's causing production line delays. And Bitcoin continues to push higher, breaking 52 thousand - as El Salvador becomes the first country to formally adopt the crypto as legal tender.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

We are live from the shores of Lake Como where EU Economy Commissioner Paolo Gentiloni says that the continent must move to fill the geo-political void created by the U.S. following the Afghanistan withdrawal. French Finance Minister Bruno Le Maire also echoes the sentiment, telling CNBC that EU nations must now increase defence spending. In the U.S., the August jobs report falls short of expectations with hospitality and leisure sector growth faltering. We are also live at the IAA Mobility show in Munich where VW CEO Herbert Diess says automated vehicles are the future of the car industry. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. weekly jobless claims come in at their lowest level since the early days of the pandemic, helping Wall Street to new record highs. We are live at the Ambrosetti Forum on the shores of Lake Como where former World Bank chief economist Joseph Stiglitz tells CNBC that he welcomes a tighter labour market. China’s services sector shrinks in the month of August, according to a private survey, plunging to levels not seen since the start of the pandemic. In Japan, Prime Minister Yoshihide Suga announces plans to resign, saying he will not run for re-election later this month. And in Italy, Prime Minister Mario Draghi says he may introduce a vaccine mandate. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

OPEC+ producers stand firm against U.S. pressure to sharply boost supply, agreeing to extend existing policy to return supply to market and hike forecasts. The S&P 500 ends the session flat after U.S. companies produced fewer August jobs than expected with Delta variant concerns weighing. The world’s largest chemical producer, BASF, has launched its de-carbonisation programme. We hear exclusively from CEO Martin Brudermueller who says German manufacturers require Berlin’s support to maintain competitiveness and to become sustainable. And Beijing now has ride-hailing apps in its crosshairs, accusing companies of hiring unapproved drivers and cars.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Chinese post-Covid economic recovery suffers a setback with factory activity shrinking for the first time in 18 months. Also in China, a new data security law launches as part of Beijing’s efforts to regulate the country’s internet future. In South Korea, a new bill is passed which will limit Apple and Google’s ability to control app store payments. OPEC and its allies have predicted that oil markets could tighten towards the end of the year but will see a surplus in 2022 as supply cuts are lifted. And in the U.S., President Biden doubles own on his decision to withdraw the military from Afghanistan, heralding an end to U.S. nation-building.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Manufacturing growth in China falters in August and the services sector contracts for the first time since the height of the pandemic. The U.S. completes its troop withdrawal from Afghanistan after a 20-year military mission in the country. More than 120,000 people have been evacuated with thousands more hoping to escape Taliban rule. In corporate news, Porsche has announced plans to open a factory in Malaysia next year - its first outside Europe. Zoom shares fall despite beating quarterly earnings forecasts as revenue growth is set to slow.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.