European stocks look set for some modest relief at today’s open following an ugly session on Tuesday where we saw a global equity sell off and a jump in govvie yields amid renewed fiscal concerns.

That saw the Stoxx600 end Tuesday’s session 1.5% in the red, whilst all three major US indices ended lower, albeit off session lows. The Dow Jones slipped 0.55% while the S&P 500 fell 0.69% to mark its worst trading session in over a month. Meanwhile, the Nasdaq underperformed at -0.82%.

The global sell off continued in Asia with bourses again a sea of red and Japanese yields hitting long-term peaks.

Composite/Services Aug PMI data is in focus today with peripheral European countries reporting first updates and core countries providing final figures. Already reporting overnight, China RatingDog Composite/Services PMI numbers improved in Aug to 51.9/53.9 from 50.8/52.6 in Jul.

Elsewhere today US Jul JOLTS Job Openings provide a curtain raiser ahead of non-farm payroll data due on Friday. Job openings are expected to decline modestly, pointing to a continued slowdown in labour market conditions as hiring continues to slow.

Away from data, ECB’s Lagarde, BoE’s Breeden and Fed’s Musalem are all slated to speak today, the latter before the Fed releases its Beige Book this evening.

In terms of govvie supply, Germany sells EUR5bn 2035 Bunds today, with the acute rise in yields seen on Tuesday likely to aid demand for the trade.

As a reminder, global debt deficit concerns resurfaced on Tuesday, with Europe and UK in the spotlight this time round. UK markets were hit hard with the 30yr yield spiking 8bp to its highest since 1998 as sterling tumbled, whilst French yields jumped to the highest since 2011. In terms of Germany, the 10yr Bund ended Tuesday's session 3.8bps higher at 2.783% ahead of this morning’s auction.

For more on latest developments see the European Breakfast Briefing.

Wednesday’s potential supply

The overall pace of supply looks set to slow on Wednesday following a huge day of sales yesterday. As a reminder that saw EUR31.385bn (fourth biggest euro day of 2025) and GBP15.1bn price Tuesday, spearheaded by jumbo sovereign deals that saw Italy print a combined EUR18bn via a EUR13bn 7yr and a EUR5bn 30yr, whilst the UK issued its biggest ever syndicated gilt in the form of a GBP14bn 10yr. The day’s single currency activity put weekly IG supply at EUR37.285bn, which is already within striking distance of the average EUR42.5bn forecast given in our issuance survey. It looks as though we may surpass that average today, with a number of names already sat waiting in the public pipeline (below), whilst we would expect more opportunistic issuance given what remains strong demand on the whole.

** Lithuania EUR long 10yr/20yr two-part

** Joint Laender #67 EUR1bn no grow 10yr LSA

** OKB USD 5yr global benchmark at SOFR m/s +46 area IPTs

** AIIB USD2bn no grow SDB at SOFR m/s +34 area IPTs

** AS LHV Group EUR80m 10NC5 T2

** Luminor Bank EUR500m no grow 4yr covered

** Slovenska sporiteľna EUR500m no grow 5yr covered

** SGS AS EUR1bn (exp) 5/10yr two-part

Over in the US, high-grade borrowers wasted no time kicking off September after the long holiday weekend. A whopping 27 issuers priced USD43.4bn across a record-setting 58 tranches yesterday. While a repeat of that pace is unlikely, issuance is expected to stay elevated through the week until Friday’s non-farm payrolls release. See THE ENDGAME.

What to watch Wednesday – Composite/Services PMIs

** Key Data: SP Aug HCOB Composite/Services PMIs (08:15), IT Aug HCOB Composite/Services PMIs (08:45), FR Aug F HCOB Composite/Services PMIs (08:50), GE Aug F HCOB Composite/Services PMIs (08:55), EC Aug F HCOB Composite/Services PMIs (09:00), UK Aug S&P Global Composite/Services PMIs (09:30), EC Jul PPI (10:00), US Weekly BMA Mortgage Applications (12:00), US Jul JOLTS Job Openings (15:00), US Jul Factory Orders (15:00) and US Jul F Durable Goods Orders (15:00)

** Key Events: ECB’s Lagarde (08:30), BoE’s Breeden (09:15) and Fed’s Musalem (14:00) speak. Fed releases Beige Book (19:00)

** Auctions: GE to sell EUR5bn 2035 Bunds (10:30)

** Earnings: 6 Stoxx600 & 4 S&P500 companies release results

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