The effects of divergent monetary paths (Fed rate hike 1 vs. Draghi’s QE) would normally strengthen the value of the US dollar against the euro and would also contribute to a fall in the German Bund and other European country bond yields and to a rise in euro stocks.
The Chinese market turmoil 2 together with capital outflows from emerging market economies (EMEs) and the possible escalation of a currency war after the upcoming Fed rate hike might work at opposite directions, contributing to further market volatility for European capital markets.