Great power clashes loom over Nvidia and Ukraine

Hello and welcome to the working week.

Second-quarter earnings season is wrapping up, after a string of stellar releases from Wall Street banks and Silicon Valley tech groups. But there is one leviathan yet to report: Nvidia, which will publish its earnings on Wednesday.

The world’s largest company by market capitalisation, Nvidia has in recent years been the capstone of earnings season. But it has lately had a difficult time of it. The chipmaker has so far shrugged off concerns that the artificial intelligence wave is poised to crash, despite the many think-pieces on the subject, including in these pages. Now, the troubles facing the company are chiefly geopolitical.

Tensions between Washington and Beijing have stifled Nvidia’s expansion into China. The company’s chief executive, Jensen Huang, heralded a small victory this month when he managed to obtain H20 chip export licences to the world’s second-largest economy following a ban imposed by US President Donald Trump in April. But it required agreeing to an unusual revenue-sharing programme with the administration. Some rather undiplomatic comments from commerce secretary Howard Lutnick last week then quickly put paid to any growth ambitions in the region. Analysts expect these challenges to loom over Wednesday’s results.

Nvidia isn’t the only entity caught in the middle of a great power clash. Peace talks regarding the future of Ukraine seemed to be progressing when Trump said Russian President Vladimir Putin had agreed to a trilateral meeting with Ukrainian President Volodymyr Zelenskyy. 

But Russian foreign minister Sergei Lavrov soon threw cold water over the idea, saying on Friday that Putin was “not ready at all” to meet Zelenskyy. Expect protracted back-and-forths about the Kremlin’s demand that it be involved in Ukraine’s postwar security guarantees over the week ahead. German Chancellor Friedrich Merz and Canadian Prime Minister Mark Carney are set to meet in Berlin on Tuesday to discuss, among other things, the conflict. Though little is likely to come of that.

There are a handful of economic data points that will shed light on the battle against inflation. On Friday, the US PCE index — a measure of prices American consumers pay for goods and services — is published. Analysts expect the reading to run hot, especially after CPI data for July came in above the Federal Reserve’s target at 2.7 per cent. The reading is likely to provoke anxieties for Fed chair Jay Powell, despite his squarely dovish tone at the Jackson Hole Symposium earlier this week.

The European Central Bank will on Thursday publish the minutes from its July meeting, which analysts will scan for evidence that doves on the council argued for further cuts in the near term. Economic activity across the EU has been picking up, strengthening a growing consensus that the central bank will refrain from further interest rate cuts after summer.

One more thing . . . 

I am very much looking forward to the UK bank holiday on Monday. If you’re anything like me, it’s easy to lose sight of the importance of taking leave to decompress. By that, I mean actually decompress. Not whatever this is . . . 

I hope you manage to take some proper time off this summer. Let me know your out of office plans at [email protected] or, if you are reading this from your inbox, simply hit reply.

Key economic and company reports

Here is a more complete list of what to expect in terms of company reports and economic data this week.

Monday

Tuesday

• Australia: Reserve Bank of Australia releases August meeting minutes

• Bank of England Monetary Policy Committee member Catherine Mann speaks in Mexico

• Federal Reserve Bank of New York president John Williams speaks at Bank of Mexico conference

• Federal Reserve Bank of Richmond president Thomas Barkin speaks in Virginia

• UK: British Retail Consortium releases shop prices data

• Results: Bunzl HY, Ping An Insurance Group Q2

Wednesday

• Additional 25 per cent US tariff on Indian exports kicks in, raising total duties to 50 per cent

• Federal Reserve Bank of Richmond president Thomas Barkin speaks in North Carolina

• UK: Office for National Statistics publishes report on progress on restoring suspended PPI data

• Results: Ageas H1, Aroundtown H1, JD Sports Fashion Q2 trading statement, Nvidia Q2, Prudential HY, Vienna Insurance Group HY

Thursday

• Bank of Japan board member Junko Nakagawa to speak in Yamaguchi prefecture

• Federal Reserve Board governor Christopher Waller speaks in Miami

• Finnish central bank governor Olli Rehn to give speech

• European Central Bank publishes July meeting minutes

• Results: Asda Q2 trading update, Delivery Hero H1, EVN Q3, Pernod Ricard FY

Friday

• Bank of Mexico presents its revised inflation figures and growth forecast for previous quarter

• US: PCE index publishes

• Results: China Construction Bank Corp Q2, CITIC Securities Co Ltd Q2

World events

Finally, here is a rundown of other events and milestones this week.

Monday

• Indonesia: Annual Super Garuda Shield military exercises begin

• South Korean President Lee Jae-myung and US President Donald Trump to meet in Washington

• UK: Summer Bank Holiday; final day of Notting Hill carnival

• US: alleged Sinaloa cartel co-founder El Mayo is set to enter a guilty plea

Tuesday

• Chancellor Friedrich Merz receives Canadian Prime Minister Mark Carney

• France: Prime Minister François Bayrou to speak at a meeting organised by the CFDT labour union in Paris; the country also returns skulls kept in a museum since the late 19th century to Madagascar

• Lithuanian parliament votes to confirm Inga Ruginienė as designated prime minister

Wednesday

Thursday

Friday

Sunday

• Two-day Shanghai Cooperation Organisation Summit begins, to which leaders from over 20 countries, including Russian President Vladimir Putin, are expected to attend