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The STOXX Europe 600 gained 0.29% in August, a modest headline that concealed a wide split beneath the surface: the DAX was substantially stronger, while France and the UK were comparatively weak. That divergence continued the pattern from earlier in the year of German industrial and capital-goods strength outrunning French political and fiscal drag and a softer UK market.

Month-end trading turned decisively risk-off. US–Iran strikes lifted Brent crude above US$90 a barrel, German front-end government bond yields rose, and markets moved to price a high probability of a further European Central Bank rate increase. The combination of a geopolitically driven oil spike and a more hawkish rates path re-introduced the same discount-rate and input-cost pressures that weighed on European utilities and long-duration growth names through July.

Inflation returned to the region primarily through the energy channel. German CPI accelerated to 2.9%, with energy prices up 10.5% year-on-year, even as core inflation held at a more contained 2.4%. The gap between headline and core confirms that August's inflation impulse was commodity-driven rather than a broadening of underlying price pressure, but it was still sufficient to raise the effective discount rate applied to regulated utilities and renewable-energy developers.

Power scarcity itself became an investable theme during the month. European data-centre site selection increasingly followed where power was available and affordable, rather than being determined primarily by fibre connectivity or metro proximity as in prior cycles. This reinforces the portfolio's existing preference for grid, transmission and power-equipment exposures over developers dependent on connection queues in constrained regions.

Industrial earnings provided direct validation of the capex thesis. Siemens Energy reported results that beat forecasts, with data centres and the Middle East together representing roughly half of gas-turbine orders during the period — a concrete data point confirming that AI-driven power demand is now a material, rather than incidental, driver of core energy-equipment order books.

Flexible and distributed power also attracted fresh capital. Aggreko's data-centre revenue nearly doubled over the period, illustrating rising demand for temporary and distributed generation solutions as permanent grid connections continue to lag behind data-centre build timelines. For the Nexus thesis, August reinforced rather than altered the July read-through: energy transition equities remain differentiated less by renewable exposure per se than by whether a business is converting AI-driven power demand into visible order books today, versus waiting on grid connections, hedges or subsidy timelines that constrain near-term earnings capture.