Germany’s economy expanded 0.3% in Q2 2026, revised up from 0.2% in the preliminary estimate but easing from 0.4% growth in the previous period. Ruth Brand, president of the Federal Statistical Office, said the economy maintained its growth momentum from early 2026, with exports remaining the main driver of expansion. Exports rose 2.0% (vs 2.4% in Q1), outpacing the 1.5% increase in imports (vs 0.5%). Meanwhile, domestic demand showed a modest rebound, rising 0.1% after a 0.3% contraction in Q1, with household and government consumption each increasing just 0.1% after household spending fell 0.6% and government consumption rose 0.9% previously. Gross fixed capital formation declined 0.2%, narrowing from a 1.3% drop in Q1, dragged by a continued decline in machinery and equipment investment (-1.4% vs -1.7%), while construction investment edged up 0.1% after falling 1.8%. On an annual basis, GDP grew 1.0% in Q2, accelerating from a 0.7% expansion in Q1.

European equity markets were set for a higher open on Tuesday as risk sentiment improved, with the recent selloff in global technology stocks showing signs of easing. Markets looked ahead to chip giant Nvidia’s earnings report later this week for clues on the strength of AI-related demand. Investors also continued to assess the implications of the US Treasury Department’s expanded debt buyback program following reports that it could tap its nearly $1 trillion General Account to help fund the purchases instead of relying on new issuance. In Europe, investors will assess Germany’s final Q2 GDP figures and August Ifo Business Climate survey, alongside French consumer confidence data. Meanwhile, there are no major earnings releases scheduled in Europe on Tuesday. In premarket trade, Euro Stoxx 50 and Stoxx 600 futures were up 0.3% and 0.2%, respectively.

Bitcoin surged above $80,000 on Tuesday, reaching its highest level since May and bringing its gains since mid-August to about 28%. The move was fueled by a series of positive signals, including renewed interest in the “debasement trade” after the US Treasury announced plans to increase purchases of longer-dated government bonds, weighing on long-term yields and the dollar. US spot Bitcoin ETFs also recorded their strongest weekly inflows in 10 months, attracting $1.92 billion, while expectations of continued support for cryptocurrency from the Trump administration added to demand. The advance triggered a major short squeeze, with about $7.2 billion in leveraged bearish crypto positions liquidated last week. Despite the rebound, Bitcoin remains well below its record high of around $126,000 reached last October, while analysts caution that the move may be driven largely by short covering rather than sustained demand.

The yield on the 10-year US Treasury note steadied around 4.7% on Tuesday as investors continued to assess the implications of the Treasury Department’s expanded debt buyback program. Reports suggested that the US government may tap its cash account to finance the increased buybacks, marking a shift as such purchases are typically intended to be cash neutral and have been funded through new issuance. Treasury Secretary Scott Bessent on Monday refrained from providing further signals on a potential revamp of US debt management, while reassuring markets that auction sizes for bonds would not be reduced. Meanwhile, markets speculated that the plan may offer only a temporary solution, renewing concerns over the risks of a US debt crisis and dollar weakness. Elsewhere, investors looked ahead to the latest US PCE price index data and Fed Chair Kevin Warsh’s speech at the annual Jackson Hole symposium this week for fresh clues on the monetary policy outlook.

European natural gas prices fell below €68/MWh on Tuesday but stayed close to multi-year highs, as investors assessed the impact of fresh US measures against Iran. The US Treasury said expanded secondary sanctions would target Iran’s digital assets, technology, gold, aviation and shipping sectors. It also imposed new sanctions on nearly 60 entities, individuals, and vessels allegedly involved in generating oil revenues for Iran, procuring weapons, and supporting cyber operations. These developments have added to already elevated supply risks in Europe, where the continued blockade of the Strait of Hormuz has constrained LNG deliveries from Qatar. The disruption has coincided with stronger cooling demand amid persistent heatwaves, making it more difficult for Europe to rebuild gas inventories and heightening fears that the region could enter the winter heating season with insufficient supplies.

Gold traded around $4,650 an ounce on Tuesday, staying close to its highest levels in more than three months as US government interventions in the bond market revived the so-called debasement trade that fueled gold’s 65% rally in 2025. The US Treasury Department announced an expansion of its buyback program for long-dated government debt last week in an effort to contain rising borrowing costs, with Secretary Scott Bessent saying he is prepared to increase the buybacks further while also flagging an upcoming longer-term fiscal plan. However, markets speculated that the measures may offer only a temporary solution, while renewing concerns over the risks of a US debt crisis, persistent inflation and dollar weakness. Gold-backed exchange-traded funds have also recorded increased inflows in recent weeks, signaling broader market participation and strengthening investment demand.