Nordea Markets analysts notes that in the coming Monday, an important deadline concerning the U.S. sanctions against Huawei looms large and will be a key event to watch for markets.

• “If Trump gives US companies (and Huawei) a Christmas present similar to the one just delivered to households – it could perhaps buttress risk sentiment, or vice-versa. The semiconductor sector, and by extension global and US capex activity, does look like it would need some positive news on the Huawei front.
• On Tuesday, Italian lawmakers have summoned Prime Minister Giuseppe Conte to appear before the Senate. This might lead to a confidence vote during the week. Lega’s Salvini is pushing to bring down the government. If PM Conte is voted down, it would switch attention to the Italian president, who must decide the next steps. If President Mattarella decides there now no way of creating a new stable government, he will call for a election (likely in October) – but it is a theoretical possibility that other parties can manage to form a new government without including the Lega. Italian political risks nonetheless pose another headwind for the Euro-area banking sector, on top of weak growth, a surge in regulation, negative rates, and überflat yield curves.
• On Wednesday, minutes from the FOMC’s fateful July 31 meeting is due. What can force the Fed to go beyond the “mid-cycle rate cut”? Was the Fed prepared for the surge in volatility triggered by its not-dovish-enough decision? And what is the Fed’s plan on the liquidity front?
• We are not looking forward for the next batch of Euro-area PMI figures, due Thursday 22 August. The Sentix recently crashed to its lowest level since 2014 and ZEW expectations fell to its lowest level since 2011 in August. The EA ought to be feeling some tailwinds from lower rates, a weaker EUR and a modest pick-up in money growth – but as in Asia other shocks appear to be mitigating these positive impulses.
• “At the back end of the coming week, Thursday to Saturday, the world’s foremost yield curve apologists (central bankers) will gather in Jackson Hole to discuss “challenges for monetary policy”. While primarily of academic nature, these speeches can at times be extremely relevant for the market. It is widely believed that Ben Bernanke announced QE2 at this conference in 2010.”