The setup into Aug 03–Aug 07, 2026

European equities enter the first full week of August with momentum. The DAX led last week with a 2.1% gain to 25,629, its best weekly performance in over a month. The CAC 40 added 1.6% to 8,510, the FTSE 100 rose 1.2% to 10,868, and the Euro Stoxx 50 closed at 6,358. The laggards were defensive: the SMI was flat at 14,346 and the OMX Stockholm 30 printed 0.0%. Under the surface, the week was a clear growth-and-tech story — SAP surged 12.5%, Kering jumped 17.3% on a luxury demand beat, and Capgemini added 14.0%. The flip side: ASML dropped 8.1% and Adidas fell 8.2%, showing the market is still punishing misses hard. That selectivity carries into a week loaded with earnings and macro prints.

Aug 03–Aug 07, 2026 — the calendar

Monday, Aug 04 — German retail sales for June open the data week. No central bank decisions are scheduled from either the ECB (next meeting Sep 09–10) or the Bank of England (next MPC Sep 17). The week starts clean from a policy standpoint — all the action is in earnings and data.

Tuesday, Aug 05 — The heaviest earnings day. HSBC reports H1 results, and the read-through matters for European bank sentiment after Barclays slipped 3.2% last week. BP posts Q2 numbers alongside — energy margins and capital return guidance will set the tone for the sector. Bayer also delivers H1 results; the pharma-agri conglomerate has been a restructuring story and the market will parse litigation provisions closely.

Wednesday, Aug 06 — Final July services and composite PMIs land across the board: Eurozone composite (flash: 50.0), Eurozone services (flash: 49.4), UK composite (flash: 49.3), UK services (flash: 48.8), plus country-level finals for Germany and France. The flash readings flagged a services sector teetering at the expansion/contraction line — any downward revision below 50 on the Eurozone composite would be the first contraction print in months. Novo Nordisk reports H1 results the same day; the GLP-1 leader’s growth trajectory has become a bellwether for European healthcare broadly. US ISM services PMI also drops Wednesday — a global demand cross-check.

Thursday, Aug 07 — Siemens delivers Q3 fiscal 2026 results and Diageo reports full-year numbers alongside a Strategy Day. German factory orders for June are due (consensus +0.6%), and Eurozone retail sales for June land the same morning. UK construction PMI rounds out the data — the prior reading of 38.4 flagged deep contraction in British building activity, and any further deterioration feeds the BoE easing narrative into September.

Friday, Aug 08 — US non-farm payrolls for July (consensus +79K, prior +57K) close the week. German industrial production for June likely prints the same day. Payrolls are the dominant event: the prior +57K was the weakest gain in four months, and another soft print would accelerate September rate-cut pricing on both sides of the Atlantic. A beat resets the clock.

Levels and instruments to watch

The DAX at 25,629 is the cleanest momentum read in Europe right now. The 25,000 round number acted as a floor through most of July — a weekly close below it would mark a change in character. On the upside, the index is within range of its all-time highs and a push through 26,000 opens the door to price discovery. The FTSE 100 at 10,868 sits just below the psychological 11,000 level; BP and HSBC earnings on Tuesday are the fundamental catalyst that either delivers the push or caps it. The CAC 40 at 8,510 benefits from the luxury rebound — Kering’s 17.3% surge last week was the biggest single-stock move in the dataset — but needs the PMI print to confirm demand breadth beyond high-end goods.

The Euro Stoxx 50 at 6,358 is the broad barometer. The +1.2% weekly gain was in line with the FTSE but lagged the DAX, reflecting the drag from ASML (–8.1%) and Infineon (–4.3%) — the semiconductor pocket remains a headwind for the index. The SMI at 14,346 (+0.1%) and OMX at 3,247 (flat) signal that defensives and Nordic cyclicals are not participating. Watch whether the earnings week broadens the rally or concentrates it further.

The bias

The read into the week is cautiously risk-on, carried by the DAX’s momentum and a heavy earnings slate that gives the market fresh reasons to re-price individual names. The PMI finals on Wednesday are the key macro checkpoint — last week’s flash composite at exactly 50.0 leaves zero margin for error, and a downward revision would clash with the equity bid. The earnings calendar is front-loaded (Tuesday–Thursday), meaning the market has time to digest before Friday’s payrolls dominate the session.

The one thing that flips the setup: a Eurozone composite PMI final revised below 49.5 combined with a US payrolls miss below +50K. That combination would reprice the growth outlook hard enough to override the single-stock earnings impulse, and the defensive corners of Europe — Swiss pharma, Nordic utilities — would start outperforming the cyclical core. Until that materialises, the path of least resistance is higher, led by Germany.