European equities rebounded on August 21 after the eurozone flash composite PMI for August reached its highest level since November last year, with new orders expanding, particularly in manufacturing, and export orders recovering. The STOXX Europe 600 rose 0.59% to 654.15, although it remained down 0.56% for the week, marking a second consecutive weekly decline. London’s FTSE 100 advanced 0.64% to 10,816.56, extending its winning streak to two sessions and recording a 0.62% weekly gain as mining stocks rose. Endeavour Mining climbed 4.1% and Antofagasta gained 5.4% on higher gold and copper prices. The FTSE 250 rose 0.86% on the day but fell 0.60% for the week, its first weekly decline in six weeks. Gamma Communications surged 11.6% after saying it was in early-stage talks with a Dutch private equity firm about a potential acquisition. UK retail sales declined in July after the previous month’s heatwave- and football World Cup-driven surge, while the flash UK services PMI unexpectedly increased in August. Inflation worries linked to escalating U.S.-Iran tensions continued to weigh on sentiment. After U.S. Treasury Secretary Scott Bessent threatened the toughest sanctions ever on Iran, Tehran warned of a devastating response, while expectations of an agreement to reopen the Strait of Hormuz weakened and Brent crude futures rose. Eurozone sovereign yields were largely unchanged, but markets continued to price in at least one more ECB rate hike before year-end, with the probability of a September increase above 90%.