Market Wrap: Defence bucks declines in Europe. Dollar stabilises before Jackson Hole (27.08.2026)

📊 Indices and Companies

• European index futures are heading toward the end of the session in the red due to fears of an escalation in the war in Ukraine. The worst performers are Poland (W20: -2%), France (FRA40: -1.25%), Switzerland (SUI20: -0.75%), Spain (SPA35: -0.6%), and Italy (ITA40: -0.55%). The Dutch AEX (NED25) is trading flat, supported by gains in ASML following Nvidia's earnings. The German DAX is resisting the declines (DE40: +0.2%) thanks to a rally in the defense sector.

• Pernod Ricard: Shares are falling 7.4% after the company lowered its long-term sales growth forecast to the bottom of the 3–6% range due to weak demand in the US and China. Annual sales fell by 3.9%, prompting the spirits maker to accelerate its €1 billion cost-cutting program.

• Shein raised $1.7 billion in its Hong Kong IPO, pricing shares near the midpoint of the range at a valuation of $26 billion. The down-round debut reflects a sharp drop from its peak of $100 billion driven by US tariffs and slowing sales growth.

• Shares of European defense companies outperformed the broader market following reports of Russia's planned escalation in Ukraine. Goldman Sachs' defense basket rose 1.9%, driven by gains in Rheinmetall (+4.1%), Hensoldt (+3.4%), and Leonardo (+2.8%).

• Rheinmetall will invest around €270 million to expand its factory in Kassel, creating a logistics hub and a testing center for drones. The investment aims to prepare the defense group for a €12.4 billion German contract for Boxer armored vehicles. Despite a 24% decline in its share price in 2026, the company plans to hire over 1,000 workers.

🌍 Economy and Geopolitics

• Russia is preparing to intensify ballistic missile strikes on Kyiv after concluding that peace talks have reached a dead end. Kremlin sources indicate Moscow will not yield to sanction pressure and views Ukrainian attacks on refineries as actions supported by NATO.

💱 Currencies and Commodities

• The US Dollar is rebounding for a second consecutive day as investors await Fed Chair Kevin Warsh's speech at Jackson Hole. Elevated inflation in Australia boosted expectations for RBA rate hikes (AUDUSD: +0.2%). A Bank of Japan official kept the door open for a September rate hike (USDJPY: +0.1%). EURUSD is trading flat at 1.1640.

• Precious metals are recording a slight pullback due to dollar stabilization and a general drop in risk appetite ahead of Jackson Hole and following the CIA visit to Moscow. Gold and silver are both down 0.25% (gold to $4,580/oz, silver to $68/oz).

• Energy commodities are rising on the back of geopolitical tensions and supply concerns ahead of the upcoming heating season. Brent crude futures are gaining for a second consecutive day (+1.2% to $87.60 per barrel), while natural gas futures are also trading in the green in Europe (NATGAS.EU: +2.5%) and on NYMEX (NATGAS: +0.5%).

🪙 Cryptocurrencies

• Cautious optimism dominates crypto markets. Bitcoin is adding 0.7% to $79,390, Ethereum is trading flat, while VECHAIN (+18.2%), SOLANA (+6.45%), and CURVEDAO (+6%) stand out with significant gains today.